When it comes to Personal Loans, you are your own boss. The decision of how to use the loan amount is solely yours. So whether you are planning a road trip, going for a home makeover or buying that flagship smartphone, a Personal Loan simply empowers you.
But as a wise borrower, you should always check your eligibility before taking a Personal Loan. For this, leading financial institutions offer a Personal Loan Eligibility Calculator on their websites that can help you check your eligibility and plan your loan amount accordingly.
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What Are Personal Loans?
A Personal Loan is an example of an unsecured loan in which the borrower is not required to put up any collateral to secure the loan. Income and repayment ability determine the maximum loan amount that can be offered to a borrower.
For What Purposes Can Personal Loans Be Used?
The lender won’t keep tabs on how you spend it, so you can use it for whatever you want. Renovations, a wedding, a trip, a child’s education, the newest electronics and appliances, unexpected medical bills, and other emergencies are some ways to use the loan amount.
A Personal Loan EMI calculator can help you plan your expenses for business, automobile repairs, a down payment on a home, and other purposes.
Age, profession, income, repayment capacity, and residency are typical factors that can vary from lender to lender.
It is necessary to have a stable source of income to qualify for a Personal Loan, whether you are a salaried worker, an entrepreneur, or a professional. Many factors, including the applicant’s place of employment, credit history, etc., determine whether or not they are accepted.
How Much Is The Highest Loan Amount?
One’s ability to borrow a loan is proportional to their regular monthly income. Income and expenses are factored into the loan amount. The typical minimum loan amount from a traditional lender is Rs.50,000. But if the loan is obtained from a financial institution, this figure may vary.
Maximum Loan Duration
Time frames can vary from 12 months to 60 months. On a case-by-case basis, shorter or longer terms of employment may be approved.
Loan Money Distribution
The loan is typically disbursed within seven business days after the application has been submitted to the lender. After the loan is approved, the funds can be mailed to you in the form of a cheque made out to you or deposited directly into your account.
However, new-age lenders like Clix Capital have a completely online process whereby you can apply online, and the lender will approve and sanction the loan instantly within minutes.
How Much Can One Borrow?
The answer typically depends on your financial situation and whether or not you are self-employed. Normally, lenders place caps on loan amounts so that EMIs don’t exceed 40-50% of borrowers’ monthly incomes.
The applicant’s current loan balances will also be factored into the final Personal Loan amount. The value of a loan extended to a borrower is based on their net income as reported on their most recent tax return or profit-and-loss statement, adjusted for any debts or obligations the borrower may have.
What Is The Rate Of Interest Charged?
Interest rates on Personal Loans tend to be higher than those on other types of loans. Since Personal Loans are not collateralized, this is the case. Personal Loan interest rates are typically between 10% and 29% per annum. When calculating interest on a Personal Loan, many variables are considered.
The loan’s maturity, the borrower’s credit history, and their ability to make payments are just a few of these factors. Borrowers who extend the term of their Personal Loan will pay more money in interest. Additionally, borrowers with a lower credit score and a less-than-stellar repayment history are typically assessed at higher interest rates.
What Effect Does Your Credit Score Have on Loan Approval?
Approval for a Personal Loan majorly depends on your credit history and credit score. Usually, a credit score of 630 or higher is required to qualify for a Personal Loan.
In addition, comments about late or missed EMI payments are included in the credit report and are considered when deciding whether to grant a loan. The maximum loan amount and the interest rate charged by lenders and financial institutions are based on the borrower’s credit score and repayment history.
A best personal loan eligibility calculator is handy as it allows borrowers to check and plan their finances in a way that enables them to use the loan amount wisely and repay timely.