A personal loan is a type of unsecured loan that helps to meet an individual’s urgent and unexpected financial needs. While availing such loans, no security is needed to be pledged as collateral for it. In today’s financial landscape, there are many options available in the market through which an individual can avail the personal loan in a hassle-free manner. It may be banks or online. Take a look at different ways to avail Personal loan in India:
Personal Loan through Banks
Almost all the banks provide Personal loan. All you need is a good credit score that is the utmost requirement. A credit score is your track record of repaying your loans and it also helps banks in determining an individual’s eligibility for a loan. However, every bank has its own rules and norms for personal loan. Also, interest rates too vary from bank to banks.
Here are important requirements while availing personal loans through banks:
- Minimum credit score: 640-750
- Maximum debt-to-income: Up to 45% depending on income, loan amount and credit rating
- Interest Rate: 10% – 18% depending on credit rating
Personal Loan through NBFCs
Non-Banking Financial Companies (NBFC) are establishments that provide financial services and banking facilities. They are covered under the Banking regulations laid down by the Reserve Bank of India and provide banking services like loans, credit facilities, TFCs, retirement planning, investing and stocking in money market. Today, there are many NBFCs that provide a hassle-free personal loan to individuals. Some of the top NBFCs like Bajaj Finance, Edelweiss Capital, Muthoot finance, Mahindra Finance and many more provide a range of personal loans to customers in India. However, loan amount and eligibility criteria vary from company to company.
Personal Loan through online lending
An online lending or popularly known as peer-to-peer lending is a new platform through which an individual can easily avail personal loan and that too instantaneously. Gone are the days when people follow tedious bank procedures to borrow a loan but with a change in digitization techniques, online borrowing has become a simpler process. Today many portals have started lending money through an online platform. The plus point is that here a loan gets approved in just 72 hours. All an individual need is to upload important documents like salary slip, identification documents, and bank statements digitally. At the same time, one can also interact with the lenders so that a mutual agreement can be made on the rate of interest.
Personal Loan through credit cards
Getting a loan through credit card offers flexibility to users and instant access to funds. It is a pre-approved loan that does not require any documentation and is also considered as the fastest source to attain unsecured credit. In this type of loan, a certain part of your credit card limit that is unutilized is offered as a loan. Usually, personal loans through credit card are offered at an interest rate of 10-18%. Another key factor is that credit card loans can be availed at flat interest rates.
However, taking a personal loan these days has become a much easier task with the presence of various options, but each has its own consequences. So, avail a loan only when you are in dire need of money and have a good repayment capacity.