How to Get Personal Loan?

How to Get Personal Loan? Everyone of us in our life go through in a phage in which we badly need of money. Be it, our daughter's marriage ceremony or repaying of credit card loan, we need money. When nobody help us, we go to banks and apply for Personal loan, as it is very easy to get. So friends, today, I am going to talk about Personal Loan. I will talk about, what is the process of personal Loan, what is its interest rate, repayment period and everything related to it.

What is the personal Loan

Personal Loan is a type of unsecured loan used by the people for meeting their day to day financial needs. There is no need of any kind of  pledging security or collateral for getting it.

It is very easy to get. All banks either Nationalized or Private offers Personal loan. It is very popular among people. If you have regular source of income like Government Job or Private job, banks easily give you Personal Loan. It is given for following purposes-

• For Marriage expenses.
• For Renovation of house.
• For purchasing Consumer Durable Goods.



How to get Personal Loan

• For Repayment of Credit Card Loans.

Procedure of personal Loan.

Banks have made it very easy to get Personal Loan. They have removed the necessity of Guarantor. Application forms for Personal Loan has been made easy. Ticket fee for agreement has been reduced. Following documents are needed for Personal Loan-

• Latest Salary Slip showing deductions.
• Income Tax Returns of last three years.
• Voter's ID Card or Driving Licence for proof of identity.
• Copy of ration card, Electricity Bill, Passport, Voter's I-card for proof of residence.
• Last six months salary statement of Account where is your salary is credited.
• Pan Card's true copy.

Interest Rate

It is a very costly loan. Usually banks charge interest at the rate of 13 to 15% per annum on Personal Loan. It depends on RBI's Base rate policy. So, take this loan, only if, you have urgently need of short term need of money. 

There are two options of Interest rates offered by banks, one is Fixed Rate of Interest or another is Floating rate of Interest. Both have their own advantage or disadvantage.

In the Fixed rate of interest, interest are fixed for whole repayment period, at the rate of interest, prevalent at the inception of the Loan. In this option, the interest rate is kept stable for entire loan repayment period. If banks increase or decrease the interest rate there will be no effect on your loan as you have already opted for Fixed rate of interest.

In the floating interest rate, interest rate fluctuates according to the RBI's Base Rate Policy. If you opt for this option, your interest rate is often increased or decreased by banks according to the RBI's Base Rate Policy. Most of the people opt for this option.

Repayment period and EMI

The repayment period of the personal loan is generally 3-5 years. The monthly repayment amount or EMI depends upon the proposed repayment period and the rate of interest. If you opt for three years repayment period your EMI will be high and if you opt for five years repayment period your EMI will be low. 

The entire loan amount is divided in to Equated Monthly Installments. This equated monthly installment is called the EMI. The number of equated monthly installments may increase if the entire loan with interest, cost, charges and expenses is not repaid by the stipulated number of equated monthly installment.

Processing charges or other fees.

Banks takes processing charge on every Personal Loan. It depends upon your loan amount. It is generally charged on every lakh rupees of sanctioned loan. Banks cut this processing charge from the personal loan itself. The stamp duty on agreement paper is also charged by bank.

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