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Banks and non-banking financial companies (NBFCs) provide unsecured loans to individuals to manage urgent expenses. These credit options are called Personal Loans. A Personal Loan can help you pay for medical bills, home renovations, family emergencies, and other expenditures. Borrowers can leverage attractive offers to get favourable loan terms. For example, if you apply for an HDFC Personal Loan, you can make the most of the special benefits and discounts offered by this bank. Let’s explore how to take advantage of offers while applying for a Personal Loan.
Weighing your options carefully can help you make a better decision while getting a loan. These expert tips are excellent for streamlining your options and securing attractive loan terms.
Top banks in India provide special corporate offers for salaried professionals. You can browse the available schemes according to your income level. For example, you can check out Axis Bank Personal Loans Online for salaried applicants. Typically, borrowers who earn more than 35K per month get attractive interest rates. People having an income of 75K or more get additional benefits under the HDFC Golden Edge scheme. If you borrow more than ₹10 Lacs, you can get lower interest rates. You can browse various loan schemes to find attractive offers that suit your needs.
Banks usually offer attractive interest rates to existing customers. If you have a salary account with a bank, applying for a personal loan from the same bank will help you get better offers. For example, if you have an HDFC Bank Salary Account, you may get a discount of 0.10%-0.25% on your interest rate. The final loan terms depend on your actual income and other parameters but on average, account holders get better deals than non-account-holders. People with salary accounts with their lending banks also get discounts on loan processing fees.
If you borrow a large sum above 10 Lacs or 20 Lacs, you may get better interest rates. While you should not borrow more than what you need, comparing the rates can help you plan your loan application better. If you think you may need more money soon, you should account for that in your current loan application to get the best deal.
The above points can help you shortlist the loan products that suit your needs. But how do you make the right choice and finalise the best deal? Consulting an experienced advisor can help you immensely at this stage. A knowledgeable loan advisor can help you compare various loans by considering factors like:
Interest rates and the effective annual percentage rates (APR).
Repayment tenure, pre-closure, and part payment terms.
Balance transfer facilities.
You can contact Your Loan Advisors to learn more about the available options. This team can help you compare the various loans. They can guide you as you Apply For an ICICI Bank Personal Loan or a loan from any other bank. Contact the team today for more information!
Banks and non-banking financial companies (NBFCs) provide unsecured loans to individuals for personal use. These collateral-free loans are called Personal Loans. The lenders evaluate an applicant’s income, creditworthiness, and repayment capacity before approving an unsecured loan.
The borrowers can use Personal Loans for medical expenses, home renovations, and weddings. Most leading banks like Axis, HDFC, ICICI, Kotak, and YES Bank refer to Pre-approved Company Lists that help them process Loan applications.
Employees of Companies Listed for Personal Loans get attractive interest rates and better loan terms. Let’s break down how to check the company-wise eligibility for Personal Loans.
Various banks have created Company Category Lists For Personal Loans. Employees of these approved companies can apply for personal loans under elite schemes with attractive terms. For example, suppose you want to apply for a Personal Loan From HDFC Bank. In that case, your company should feature in the HDFC Bank Company List For Personal Loans.
Banks create lists of reputable companies because it helps them screen applicants based on their quality of employment, job stability, and income level. All these factors contribute to their capacity to repay Personal Loans on time. In addition, approving loan applications from employees of approved companies can help banks reduce their risks while disbursing loans.
You can find online lists of the companies approved by various banks. For example, visiting this link can check HDFC Bank Listed Company List For Personal Loans. Top companies like Accenture, Amazon, Deloitte, KPMG, and Siemens are on this list. In addition, HDFC has an extensive list of companies whose employees get attractive interest rates while applying for loans.
Other banks like Axis, HDFC, ICICI, Kotak, YES Bank, and reputed NBFCs also provide special Personal Loan schemes for employees of top companies.
Banks and NBFCs provide different loan schemes based on their company category lists. They offer the following facilities after considering the eligibility status of an applicant.
Transfer of an existing personal loan from a different bank.
Approved company employees find it easier to get personal loans at favorable rates. However, Banks and NBFCs have a provision for processing Personal Loans for employees of non-listed companies: the policy for such is stringent, and the terms for the loan can differ.
The net salary of the applicant must be above the required benchmark. Applicants drawing a monthly income of 50k and above are preferred.
The present employer must be a limited or a private ltd; Banks will not entertain employees of partnership and proprietorship companies.
The CIBIL Score of the applicant should be 720 points and above.
Special schemes launched for high-income Applicants with a salary of 1 Lakh or more include the HDFC Golden Edge Personal Loan. In addition, eligible applicants are offered enhanced loan amounts with special terms.
The Top 500 Economic times listed companies feature in the company list of all Financers, other companies included are the following:
Major Corporations with a high turnover and good prospects.
Companies whose shares have shown steady growth.
Establishments have business accounts and salary accounts with the Bank.
Government concerns and PSU, s.
Established and secured concerns engaged in production and manufacturing.
Banks and NBFC research employers with increasing profits and promising growth who can pay their employees on schedule. Which minimizes the risk of the EMI bounce due to the salary not being credited on time.
Lenders update their Company category list regularly, delisting Companies engaged in businesses that are risky or have become non-performing—for example, hospitality companies during COVID due to loss of business.
Companies being as per their performance into tiers employees of upper-tier companies are preferred customers and are granted loans easily with lower interest rates than the lower level.
It is prudent to check the company category of your employer before Applying for a Personal Loan. By contacting us at Yourloanadvisors.com, our experienced advisors can advise and guide you according to your profile and employer to apply to the lender who will best fulfill your loan requirements.
A Personal Loan is funding provided for fulfilling individual needs, whether for emergencies, mandatory or lifestyle requirements finance should be available when needed, not when the crisis or celebration is over.
A Personal Loan is touted as one of the fastest and most convenient methods of securing funds, making this fact a reality for you possible if your application is processed without any delays.
Personal Loan providers have streamlined the process of dispersing funds to applicants hassle-free within the shortest time frame precautions taken from the applicant’s end by taking note of the following will ensure quick receipt of funds.
It would seem logical that the Bank with which you have an account will sanction the amount required as a Personal Loan quite readily this is true to some extent, as the Bank handling your money should be the preferred lender.
But having an account may not be sufficient to sanction a Personal Loan, and having a Bank account in the designated Bank is not mandatory to process a Personal Loan.
Though weight age is given to the existing relationship Banks will differ as per the policy norms for issuing a Personal Loan checking the criteria before applying will ensure the smooth processing of the application.
The balance in your account is a witness to your financial dealings; a healthy bank account is one in which sufficient balance is maintained at all times to cover all expenses. Therefore, an applicant’s bank account is studied closely and significantly approves a loan.
Regularity of salary credits and income from other sources, such as rent or interest, should reflect in the account. EMI for existing loans must be cleared timely and the average bank balance for three months should be sufficient to repay the installment of the loan amount applied.
Bouncing an EMI or a cheque returned unpaid is regarded as a default if any such transaction is seen in the last three months banking history the request for the Personal Loan is denied.
Any new credit taken recently loan amount credited in the last three months is reflected in the Bank account is an alert for further sanction.Before sanctioning a new loan amount the lender will like to assess the applicant’s repayment capacity.
A judicious balance of savings and expenditures would be ideal for giving a favorable report. Therefore, taking stock of the Banking details as the above is in order before applying for a Personal Loan will enable a smooth process.
It is wise to know beforehand the loan amount that can be sanctioned to you or what amount you can get. The requirement for funds could be in excess, but the loan amount will be approved according to the eligibility calculation.
The CIBIL Score should be above the required benchmark of 720 points or more if the CIBIL Score has been downgraded due to delayed payments, it is prudent to wait and rectify it.
Your current income and the outgoings, including the mandatory expenses and EMI being paid for existing loans. If the total EMI being paid exceeds the maximum amount an applicant can pay, there is no room to apply for another loan. Check with Yourloanadvisors.com for methods to lower your obligations and create eligibility if additional funds are required.
5% of credit card dues outstanding will be added to the monthly obligations. Therefore, if the spending on credit cards has been high, it is better to clear the dues before processing a loan request.
The Personal Loan being unsecured credit, the lender will ensure the applicant is well placed to repay the loan timely and is easily contactable. Therefore, physical verification will be conducted at the residence and office premises per the documentary proof submitted.
A self-owned or family residence is an advantage an enhanced loan amount,if required, is sanctioned as rent expenses are saved and inspire confidence that the applicant can be reached.
Bachelors living in rented accommodation must provide adequate proof of residence, verification is conducted closely and the landlord can be required to authenticate.
So if the rented accommodation is recent, ensure the landlord and neighbours are known so they can respond positively to inquiries. A negative verification result can lead to the decline of the request.
A stable job with a regular income is essential to sustain and maintain living expenses. Therefore, a Personal Loan applicant with a history of continued successful employment and prospects is a likely candidate, whereas a break in work is viewed with apprehension.
Three months or more job continuity with the current employer and regular salary credits are the bywords for Personal Loan approval.
A Personal Loan is a policy-bound product per the lender criteria the process steps are clearly defined and streamlined to hasten delivery. Any miscommunication or default can delay the request.
The final decision for approval is in the hands of the Banks Underwriter therefore, the applicant’s profile must be clearly defined to inspire confidence and prove the customer’s eligibility.
The pointers given above have been experienced over our years of servicing loans. For example, we have known eligible applications to have been delayed or declined due to minor errors in documentation and lack of clarity in communication.
We hope this will aid Personal Loan seekers in successfully processing their loan requests and receiving funds timely.
A Personal Loan is a simple & effective way of securing finance for Personal needs. Many apprehensions & misunderstandings about the product leave applicants confused. Whether a first-time loan seeker or having faced issues when applying,the following information is provided for our customers to help distinguish Myths from Facts.
Myth- a Personal Loan is a Secure Loan. The applicant needs to secure an asset to obtain funds via a Personal Loan.
Fact- A Personal Loan is an unsecured loan marketed by leading Banks & NBFCs. It is characterized explicitly as unsecure the finance required by the loan seeker is forwarded solely based on the profile, CIBIL SCORE and supporting documents.
The applicant taking the loan does not have to mortgage an asset in the form of property, jewelry, or a fixed deposit to secure funds.
Myth- The rate of interest for a Personal Loan is liable to change at any time during the tenure.
Fact- The rate of Interest for a Personal Loan is fixed on the approval of the requestat the time of disbursal it is applied per the policy of the particular Bank/NBFC providing the loan.
The Personal Loan agreement signed by the applicant clearly states the terms and the interest rate to be charged.
The interest rate charged on the Personal Loan remains constant for the entire tenure of the loan the EMI is calculated according to the repayment tenure from 12 to 72 months and is deducted regularly from the Bank account.
Myth- Acquiring a Personal Loan is a long & tedious process.
Fact- A Personal Loan is a fast & convenient way of securing funds for an urgent financial need. An applicant can secure funds within 72 hours of applying. Following the proper guidelines, providing genuine details, authentic details & having a good credit history are important factors that contribute to the smooth processing of a Personal Loan. With the introduction of online processing for Personal Loans, applicants can now apply digitally and receivefunds in record time.
We at yourloanadvisors.com provide doorstep delivery of Personal Loans to our valuable customers & help them to complete fill their financial needs timely & without any hassle.
Myth – The Rate of Interest for a Personal Loan is very high.
Fact- Personal Loan, unsecure funding, is provided at a higher rate than secure loans such as home loan. However, it is still the cheapest way to secure funds for personal needs.
The interest rate charged for a Personal Loan is from 11% to 18% @ reducing balance, and the fixed rate amounts to 6% to 12% per annum.
Therefore, getting money without any security from the Bank via a Personal Loan is cheaper & easier than borrowing from private agencies or having a mortgage on an asset or jewelry.
Myth –The CIBIL data (records of Credit Bureau of India Ltd) is the proper& final authority on Creditworthiness.
Fact- The CIBIL is a private agency that records all financial data.All major financial institutions, Banks & NBFCs submit details of all credit transactions of their customers to CIBIL.
The CIBIL, in turn, provides the Banks & Credit Institutions with the records of an individual’s credit history whenever required or when an individual applies for financial assistance.
Screening the applicant’s credit history gives the Lending institution the confidence to forward further credit. If the credit history is flawed, the Loan application will get rejected. While some Banks are willing to override a CIBIL issue, other lenders may like to go by the book &deny the Personal Loan request.
Knowing an applicant’s behavior with credit is always advantageous before beginning a credit relationship & accessing the credit records. Still, it is essential to remember that the CIBIL records are not infallible.
Maintaining an accurate record of the working class,with similar names, dates of birth & other similar characteristics, is a considerable challenge. In addition, a financial institution may erroneously upload incorrect data about a client and technical glitches could also mar records.
Lending institutions overlook age-old defaults if the applicant has over come a lousy patch with a loss of employment or illness and is now earning a regular income paid all debts and restructured finances.
We at yourloanadvisors.com help our customers to improve their CIBIL and amend or correct a wrong entry to clear the CIBIL mandate.
Myth–A CIBIL Score or a previous Credit record is mandatory to secure a Personal Loan.
Fact- The Personal Loan mandate for various lending institutions is governed by individual policy. Some Banks & NBFCs provide Personal Loans to individuals with a proven credit record. In contrast, others may consider it a worthy proposition to give Personal Loans to applicants who have never availed of credit before.
Loan seekers can apply to a credit institution that forwards Personal Loans to fresh applicants. However for first-time borrowers, the loan amount may be conservative; it is worth the while to secure a Personal Loan & build a credit history.
Myth- All, the Personal Loan lenders, are similar; a rejection from one means a Blanket rejection.
Fact- No need to despair if a rejection has been issued for a Personal Loan application.
There could be many reasons why a Personal Loan application is declined. For example, the applicant’s profile may not match the policy requirements the current employer may not feature in the approved list of companies or it could be a simple verification issue.
The Personal Loan process is speedy, so there is always room for an error in operation most banks are willing to reassess the decision if the customer requests a relook.
Unless the applicant has been a chronic defaulter in former credit dealings or cannot afford to pay the monthly in installments or the Loan, the need for a Personal Loan can be fulfilled.
Myth- Money needs to be advanced for processing when applying for a Personal Loan.
Fact- No funds are to be advanced when applying for a Personal Loan, and the processing fees or file charges are deducted from the loan amount approved on disbursal of the loan.
The Processing fees are from nil to 2% of the loan amount, per the policy of the lender and loan amount approved.In addition, the applicant is intimated about the charges applicable and other terms on signing the loan agreement. Any ask for funds or when applying for a Personal Loan should be reported as it amounts to fraud.
We at yourloanadvisors.com have a decade of experience helping our esteemed customers to clear doubts. We assist and guide you to the best of our abilities and go to all lengths to ensure your Loan experience is successful and hassle-free.
A “Top Up” or an extra amount added to an existing loan has become a convenient option: a customer mindset is to get funds quickly from a known source with familiar terms and conditions.
A Top Up Loan is advantageous to the lender and the applicant, as the lender is confident of the repayment and the borrower is satisfied with the services of the finance provider and will like to avail services repeatedly.
The facilities of a Top-up loan cannot be taken for granted, and the existing loan does no ten sure eligibility for a Top Up.
As the process for a Top Up is similar to that of a new all the designated steps will be followed. Complete documentation is to be submitted to process the same. Eligibility for a Top-up Loan is considered as per the following factors:
The applicant’s current salary must be the same or increased. Suppose there is a dip in the pay, the financials will be re-evaluated to determine if the applicant can afford to pay the extra installment with the reduced income and other expenditures.
If the applicant has a pay increase, the EMI capacity will be calculated per the current salary drawn, and the Top Up amount is easily granted.
If the applicant has changed jobs when Applying for a Top Up, the present employer should rank in the approved company list of the Bank if the company has been downgraded or does not feature in the company category list, the request will be viewed as per the profile of the present company.
If the employer now occupies a premier spot, the applicant can be suitable for funds and the required amount.
A primary requirement to avail of a Top Up facility is that the installment of all loans and credit card bills are paid as per schedule.
A customer making timely payments for the current loan is of value to the Bank and will be readily given further credit when required as a Top- Up Loan. In contrast, the lender can be apprehensive about providing an additional amount to a client unable to manage credit taken.
CIBIL Score: As per the norms for a new loan, a request will be made to CIBIL for an updated record. The CIBIL Score of the applicant must be viewed above the required benchmark; the repayment record of credit taken in the form of loans or credit cards from other lenders is also assessed.
The total credit usage of all the existing EMI and credit card dues must be paid timely. Therefore, all EMI is to be paid monthly, and credit card dues will be added to calculate the eligibility for a Top-Up.
The applicant must have enough income to pay the current due and afford the Top Up Loan.
Any recent credit taken will increase the liabilities of the applicant. Therefore, if the applicant has been granted credit recently, the lender will prefer a time interval before giving an additional amount as a Top -Up loan.
A Personal Loan Top Up is allowed by most Banks 3 months after the existing loan has been granted. Eligibility for a mortgage Top Up is calculated based on the current value of the property and the number of installments paid.
In exceptional circumstances, a Top Up Loan is awarded soon after the parent loan if the applicant’s income exceeds the debt ratio by an excess margin or the value of the property and the applicant’s income is more than the loan amount granted initially.
The primary factor for calculating eligibility for a Top Up Loan is the applicant’s current income, which should be steady. With the monthly incoming, the mandatory expenses, obligations installment due, and credit card spending should be easily affordable.
The employment continuity should not be broken in the recent past, and if the applicant is self-employed, the business should be running smoothly with increased turnover and profits.
To sum up, the eligibility for a Top Up Loan will be calculated per the applicant’s current situation and creditworthiness unexpected events like the recent lockdown effect due to COVID created uncertainty.
Faced with the loss of business, some industries, such as travel and hospitality, were severely affected Financers were apprehensive about offering further credit during the tumultuous period.
Those were exceptional times but keeping a safety margin and planning finances well in advance is the mantra to receive a Top -Up Loan when required.
Check your eligibility criteria with us to ensure a seamless process for your Top-Up Loan.
Loans can help individuals and families navigate urgent financial requirements. There are many types of credit instruments available in India. One of the best loan options available to consumers is a Loan Against Property (LAP). LAPs are secured loans that allow borrowers to submit their property assets as collateral to borrow money. If you are planning to Apply For a Loan Against Property in Delhi or some other part of the country, this guide will help you! Let’s break down how to get Loans Against Property in India!
A Loan Against Property is an option that allows you to borrow a certain amount by mortgaging a real estate asset. Retail banking organizations and non-banking financial companies provide loans against residential or commercial property. These secured loans usually have lower interest rates than Personal Loans. The collateral minimizes the lender’s risks, enabling them to offer favourable loan terms at affordable rates.
Here are the salient features of LAPs in India:
• Eligibility: Salaried professionals and self-employed individuals can apply for LAPs in India. Some financiers may also have specific age criteria for these applications.
• Loan Amount: Lenders usually sanction loan amounts ranging from 50 to 75% of the asset’s property value. They also scrutinize the applicant’s income before approving a loan. The loan amount varies between 10 lacs and 40 crores in the Indian market.
• Repayment Tenure: The repayment tenure of LAPs cannot be longer than 15 years. The lenders approve the tenure based on the loan amount, EMI considerations, and the applicant’s repayment capacity.
Applying for LAPs: Here’s What You Need to Know
Applying for a Loan Against Property in Delhi and other cities can be seamless if you know what to do. Here are the crucial details you must know about the application process.
• Property Ownership Details: You can take a loan against a property if the asset is registered in your name. If you apply for a loan against jointly owned property, all other owners must be co-applicants. According to Municipality requirements, an applicant can mortgage a property with an approved sanction plan.
• Property Types: You can get a loan against different property types. These include residential or commercial plots, industrial property, and commercial premises like shops.
• Loan Purpose: Lenders rarely place limitations on the end use of a loan against property. Usually, borrowers take these loans to pay for wedding expenses, business expansions, higher education, medical emergencies, and similar requirements.
You can apply for Loans Against a property by submitting original documents related to property ownership and personal details. A top financial advisory company in India can help you compare the requirements of different financiers to find a loan that suits your needs. You can submit your applications online or offline, depending on your lender’s requirements. The lender will take original documents for verification before approving your loan. If you want a Loan Against Property Services in Noida, Gurgaon, Delhi, or other areas, you can consult the best financial advisors in India for guidance!
Economies today are fuelled by Lending; the RBI (Reserve Bank of India) allows Banks and NBFC to fund further but regulates the cost of funds needed to enhance growth and control inflation. Hence, rising inflation governing bodies will increase interest rates, whereas table inflation will decrease lending rates.
Banks and financial institutions establish their rate list per the cost of funds with added margins and offer Secured and Unsecured credit to credit seekers as;
Personal Loans
Business Loans
Home Loans
Vehicle Loans
Loan Against Property
Borrowing comes at a cost; the principal charge to be paid by the borrower is the interest rate at which the funds are forwarded for the term or Tenure of the Loan. The Interest rate is the amount charged over the principal by the lender.
Keeping in mind the fluctuations in the Base rate of the RBI Banks adjust interest rates accordingly holding the margins of the Bank steady. The changes most affect secure loans with extended tenures, primarily Mortgages for which the interest will be charged at a Floating rate. At the same time, Banks offer a fixed interest rate for limited-tenure loans.
A Floating Interest Rate, as the term denotes, is a variable rate that fluctuates as per the base rate. The base rate is the rate the Federal Reserve or Reserve Bank of India will charge commercial Banks for further lending. Lenders can further publish their rates taking into account their cost of funds.
With a change in the base rate, and MCLR, the Floating Interest Rate will also fluctuate the EMI, and the monthly equated instalment will increase or reduce accordingly. Therefore a floating interest rate is usually reviewed every quarter, and the instalment changes will be affected.
A Floating Rate in interest is applied to Home Loans and Loan Against property, high-value loans allotted for increased tenures up to 25 years/300 months. Economic changes will affect long-term loans, and the lending rate will be adjusted.
Applicants can pay a fixed Interest Rate for mortgages for a limited period the fixed rate will be higher than the current Floating Interest Rate. The rate will be reviewed and adjusted according to the ongoing Rate of Interest.
The advantage of a floating interest rate is that it moves in tandem with the economy, providing relief to the customer with a lower instalment with rising inflation. In addition, refinancing a mortgage is also an option with the lowering of interest rates.
Unsecure loans and short-tenure loans, such as Personal Loans, Vehicle loans, gold loans, and finance for commodities are forwarded at a fixed interest rate.
A fixed interest rate remains steady throughout the tenure and the EMI remains unchanged. It is not affected by changes in the MCLR and market fluctuations, as is a floating rate; it remains constant.
A fixed Interest rate is determined at the time of disbursal of the loan the loan agreement will reflect the details of the interest rate charged, the tenure for repayment and the EMI. The EMI will be presented to the Bank month on month through ECS.
The EMI will be deducted from the Bank account on a fixed date; this date remains unchanged for the entire tenure of the loan, and the instalment amount will be deducted from the account through ECS (electronic clearing systems.)
The advantage of a fixed interest rate is that there is no ambiguity regarding the total cost of the loan and the customer can plan the budget for the repayment tenure.
A fixed or floating interest rate is applied per the terms and conditions of the lender as per the governance of the Reserve Bank of India. The applicant has no choice but to go with the dictate though it always benefits the customer to know details of all the costs and charges and how they will be applied to the credit taken.
The Interest Rate is the primary charge understanding the nuances of how it works and how to calculate your Interest Rate is essential. Our EMI Calculator is a tool to help you know your EMI as per the Interest Rate and tenure applicable.
While borrowing, it is essential to know the costs and terms to check on the bandwidth to bear the cost of credit, as timely payments are a priority to maintain a good credit profile and CIBIL Score this will go a long way to ensure availability and smooth process of further credit when required.
Acquiring funds as a Top to an existing Personal Loan is quick and convenient, particularly if required in an emergency, but it is worth the while to check out the terms and conditions and the costs that Apply for a Top Up Personal Loan. Other options, such as a Parallel Loan from the parent or an alternate Bank, may be available with more suitable offerings.
The interest rate for a Personal Loan will be applied as per the current ongoing rate if the interest rates have increased, the interest rate for the principal balance of the existing loan with the Top Up(as per the Top Up process) will be costlier and as per the revised rate.
The interest rate for a Personal Loan is not standardized across lenders banks and NBFCs offer interest rates as per the individual policy and customer profile and another lender may be willing to give funds at a better rate of interest. A New Personal Loan from an alternate Bank can come at a lower price.
Topping Up a Personal Loan early in the tenure serves well as a minimum of interest has been paid. As the term progresses the central portion of the interest is repaid, so the cost of funds will increase after a Top Up.
Following approval the previous loan is closed and a new loan account is restructured with the balance of the existing loan and the Top Up amount. Interest is charged per a new repayment schedule not considering the previously paid interest amount.
A Personal Loan can be repaid after paying 12 EMI charges are also applicable per the lender’s policy. If the intention is to pay back the amount borrowed quickly a Top Up can prove costlier as the applicant will have to cover another 12 EMI before the prepayment is allowed. Pre-closure charges levied will be applied to the existing balance of the previous loan and the Top Up.
The company category of the applicant plays a primary role in the terms and conditions offered. If the customer has changed employment recently the Personal Loan Top Up will be processed as per the status of the current employer. A higher interest rate may be applied if the company category has been downgraded.
Making an informed decision will help to reduce costs, as the terms of a Top Up will affect not only the current loan amount approved but also the balance of the previous loan.
A Parallel Personal Loan runs simultaneously with the existing Personal Loan. The terms and conditions may differ from the existing Personal Loan and will be applied per the current interest rate and eligibility of the applicant.
An applicant can apply for a Parallel Personal Loan to the existing lender or any other Bank the application will be processed as a new loan and if approved,run independently of the previous loan.
An additional EMI will be presented to the applicant’s Bank account for the tenure approved.
A Top Up is available to eligible applicants with the Balance transfer of a Personal Loan. Applicants requiring additional funds can avail of a Top Up with the Balance Transfer of the existing loan to an alternate Bank.
Banks offer the lowest interest rates to customers with an on-time repayment track for a Personal Loan Transfer, with the advantage of extra funds as a Top Up at a lowered cost. The conditions are that the loan should be eligible for a Balance Transfer.
All credit comes at a cost it pays to get a broader view before taking any credit. Taking time to research what works best for you will help to reduce costs significantly. Meanwhile maintaining a stable CIBIL Score by making payments on time is a priority to get funds on the best terms when required.
Taking a loan is a common way to access more funds. Borrowing money can help individuals and businesses manage essential expenditures or emergencies. But getting a loan often depends on the creditworthiness of a borrower.
Lenders want to be sure that their creditors will pay back the loaned amount on time. That is why banks and other lending institutions look at the credit scores of loan applicants before sanctioning their requests.
Credit scores can also influence the terms of a loan agreement. For example, you may get low Personal Loan Interest Rates if you have a high Credit Score! Thus, your credit score is an essential consideration while making financial decisions. But who decides these scores, and how can you get this information? Let’s explore the top agencies in India that are authorized to generate your credit report.
The Reserve Bank of India (RBI) has authorized four Credit Information Companies (CICs) to collect information regarding the creditworthiness of borrowers. These credit bureaus analyze and interpret the credit behavior of borrowers to generate their credit scores. They provide comprehensive credit reports for borrowers across different types of credit instruments. TransUnion CIBIL is India’s oldest credit bureau. It is also the most ubiquitous. As a result, its name has become synonymous with credit scoring. That is why many people refer to all the CICs as CIBIL Agencies. The four CICs in India are:
● TransUnion CIBIL
● Experian
● Equifax
● CRIF Highmark
Let’s break down everything you need to know about these bureaus.
This institution was established in 2000, becoming the best-known credit bureau in India. Leading banks, non-banking financial institutions, and housing finance organizations refer to CIBIL Scores before approving loan applications. For example, if you want a YES Bank Personal Loan, having a high CIBIL score will help your case. Here is what you need to know about this credit bureau:
● Services: TransUnion CIBIL provides consumers with credit scores and complete credit reports. The credit scores it assigns lie between 300 and 900. It further generates the CIBIL ranks and commercial accounts for organizations.
● Scoring Techniques: It collects information from the Consumer, Commercial and Micro-Finance Institution Bureaus to develop credit scores for over 1000 million entities. It has a calculation model called Empirica. This scoring model considers repayment history, credit mix outstanding loans, and other details.
● Contact Details: Users can contact CIBIL by logging onto https://www.cibil.com/contact-us.
This American-Irish institution was the first CIC approved under the CICRA Act of 2005. It launched its Indian operations in 2010, generating credit reports with its proprietary scoring techniques. Here is what you need to know about this SEBI-approved agency:
● Services: It provides credit scores for individuals and commercial proprietors in the 300-850 range.
● Scoring Techniques: Experian uses the FICO calculation model to generate scores. It focuses on better risk management. Moreover, it combines individual and business information to calculate commercial borrowing scores.
● Contact Details: Users can reach out to Experian at https://www.experian.in/contact-us.
Equifax India was a joint venture between 7 Indian financial institutions and Equifax Inc. USA. Since 2010, this organization has focused on creating user-friendly credit reports by minimizing complicated jargon. Let’s break down what you must know about Equifax.
● Services: This institution provides credit reports to consumers. It also includes portfolio reviews and risk scores for its members.
● Scoring Techniques: The Equifax scoring model accounts for the length of credit history, repayment records, credit mix, and other factors. Its scoring model calculates scores in the 280-850 range.
● Contact Details: You can contacts Equifax at https://www.equifax.co.in/contact_us/en_in?intcmp=header_contact.
Licensed in 2010, CRIF Highmark is India’s pioneering full-service CIC. It provides credit reports for multiple borrower segments. They cater to retail borrowers, MSMEs, microfinance creditors, and commercial borrowers. Here is what you must know about CRIF Highmark:
● Services: It provides credit reports to different kinds of borrowers. It also offers fraud management and predictive analytics-oriented solutions to institutions.
● Scoring Techniques: CRIF’s scoring model accounts for factors similar to the ones used by other CICs. An essential element they evaluate is the debt-to-income ratio. They assign scores in the range of 300-900.
● Contact Details: Users can contact this institution at https://www.crifhighmark.com/contact-us.
As the above discussion highlights, credit scores calculated by India’s CICs lie in the 300-900 range. Typically, a score above 700 is considered to be high. If you want more information, like the minimum CIBIL score for Personal Loans or how to check your CIBIL Score for loans against property, you can contact the YourLoanAdvisors team today!
A Loan Top-Up is a common terminology in the banking industry referring to an additional sum added to a pre-existing loan, similar to an extra topping added to a pizza or refills to a glass of Coke the base remains the same but with an enhanced value.
Individuals look to a previous source as a suitable option rather than starting a new relationship. Dealing with a known Bank or NBFC gives the applicant a sense of comfort in applying for additional funds as a Top Up when required.
A Personal loan: Funds received as a Top-up to a Personal Loan can be used for personal expenditures such as Family vacations, Wedding expenses, educational expenses, and medical usage or emergencies.
A Home Loan: A Top-up to an existing Home Loan is sanctioned for registration of the property, home renovation, expenses for additional construction in the residential premises, and maintenance expenses.
Banks and NBFC usually give a gap period of three to six months before sanctioning a Top-up. This is more so with first-time loan seekers, confirming if the applicant conducts the loan per the agreement terms.
Lenders are keen to retain good customers who seek a Top-up to their existing loan, but only if eligibility criteria are met.
• Individuals with an existing loan are eligible to Apply for Top-Up if the EMI is being paid on time; the successful payment record gives a sense of confidence to the lender that the loan will be repaid without delays. The request may be denied if there are bounces or delays in the repayment track.
• The applicant’s obligations will be considered before calculating the eligibility for the Top Up these include existing loans, credit card dues, and regular monthly outgoings. The income must be sufficient to afford the expenses and pay the additional EMI amount.
• The CIBIL Score of the applicant must be above the required benchmark the CIBIL records are checked to ascertain the number of loans and credit cards being held.The repayment record for all credit taken should be a timely one. If the lender feels that the applicant has recently taken too much credit, the applicant can be declined.
• The applicant’s employer must feature in the approved list of companies issued by the Bank. If the applicant has changed employment, the application for a Top-up will be viewed per the applicant’s current status and must meet the eligibility criteria.
A relationship with an existing lender may prompt customers to apply for extra funds when required. A Top-Up option though convenient and suitable in some circumstances, may not work well in others.
A Top-Up Loan is quicker as the lender is familiar with the applicant’s details and can expedite the process. Therefore, a Top Up is advantageous if there is an urgent requirement of funds.
With a top to the existing loan, the applicant has the benefit of paying a single installment for the entire amount. Individuals preferring to manage a single EMI can Top Up an existing personal loan and not apply for an additional/parallel loan.
If the existing EMI is a strain on the purse, an additional loan may add to the expenses. Applicants can request an extension of the repayment tenure with an affordable EMI post-approval of the Top-Up.
With a Top-Up,customers can avail of the benefits of a discounted interest rate applied to the principal balance of the existing loan and the added amount approved post a Top-up.
Applying For a Top Up Loan will not always serve well below are the scenarios under which it might not be the best option.
As most Banks have a lock-in period of 12 months, therefore, with a top Up, the applicant can repay the loan a year after receiving the Top Up amount thus, the choice for prepaying the loan becomes restricted.
Applying for a Top Up early in the Tenure is a better option as the interest quotient has been majorly repaid after the tenure has crossed halfway. With the loan being restructured, interest will be levied as per a new repaymenttenure on the principal balance of the previous loan and the fresh amount sanctioned.
The current interest rate should be confirmed before Applying for a Top Up. If the existing loan is running at a lower rate than what is being offered with a Top Up it is better to Apply for a Parallel Loan rather than going in for a Top Up.
Consider all the options before deciding whether a parallel loan will serve the need better than restructuring the existing loan with a Top Up.
A Top loan is similar to a Balance Transfer which is done internally. The existing loan will be foreclosed, and a new Loan account will be generated with the principal balance of the current loan and the additional amount approved.A new EMI will now be presented to the Bank account for the tenure approved.
The process steps followed for a Personal loan Top Up are similar to those of a Fresh Personal loan.
The applicant needs to apply with the updated documents giving the present residence and employer details. The request for a Top Up can be declined if the applicant’s current profile and CIBIL History are unsuitable. Running a previous Loan successfully is not reason enough to get a Top Up when needed.
Lenders willingly offer a Top Up to Existing Personal and Home Loan customers who successfully run their present loans with an on-time repayment record. It is a win-win situation for the lender who is confident of funds being repaid with interest and for the applicant.
First-time credit seekers must build a good credit score before being eligible for a Top-Up Loan. Existing customers are issued for a Top Up as often as desired as long as they hold a steady income and a profile that the bank approves.
Central Banks approving Top Up Loan are the Prime Lenders today.
HDFC Bank
ICICI Bank
Axis Bank
Yes Bank
Keep the Top Up option but survey the market for other offers we at YourLoanAdvisors are there to help our esteemed customers make the best decision for their financial needs.