Today, an increasing number of people are applying for Personal Loans to meet their larger expenses. One of the reasons for the significant rise in the growing popularity of Personal Loan is that being an unsecured loan, it does not require any collateral and the processing time is quick. You can easily avail of a Personal Loan from any bank or a non-banking financial company of your choice. With the advent of the online services offered by financial institutions, you can get the money within 48 hours.
What is a Personal Loan?
A personal loan is an unsecured credit provided by financial institutions based on criteria like employment history, repayment capacity, income level, profession, and credit history. A personal loan, which is also known as a consumer loan is a multi-purpose loan, which you can use to meet any of your immediate needs. It is good at personal loan in chinatown.
What are the benefits of availing of a Personal Loan?
- Unlike other types of loans like Home Loan or Gold Loan, where you must provide several documents, Personal Loans require minimum documents and the approval process is quick.
- With various financial institutions offering Personal Loan online services, the loan amount is disbursed within a few hours provided the lender is convinced of your repayment capacity.
- Another significant feature of a Personal Loan is that the lenders offer you the flexibility to choose your loan tenure. Usually, Personal Loan tenure ranges from one to five years. So, you can select the loan term based on your repayment capacity. You should opt for a shorter loan so that you can save on the interest payment and repay the amount faster.
What is the maximum amount that you can borrow?
The maximum amount that you can avail of depends on your income level, your profession, and the lender’s assessment of your loan application. Generally, the lenders sanction the loan based on their calculation, so that the EMI is not more than 40% – 50% of your monthly income. Also, the lenders consider if you have any dues while calculating the loan amount.
If you are a business owner or self-employed, the lender will determine the loan amount based on the profits earned and recorded in the profit and loss statement. If you are a salaried professional, the lender will determine the amount based on your salary and other liabilities.
Now that you know about Personal Loans, you can compare the loan offers from different lenders apply for a Personal Loan online, and get the amount you need to meet your expenses.