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Remember, a Personal Loan Rejection from one Bank doesn’t mean a blanket rejection. There’s always a chance for approval from another bank. Staying hopeful and exploring your options is crucial, as this resilience can lead to success.
Have you ever applied for a Personal Loan and been rejected? It’s a shared experience. Many of us have felt the surprise and confusion of rejection, even when everything seems to be in order. You’re not alone in this. It’s a common situation that many people find themselves in.
On the other hand, customers with an aberration in their CIBIL record may feel it is no big deal if they have not paid their Personal Loan EMI on time for a short period but are currently on track. Let us look at situations when one lender rejects your Personal Loan, which an alternate financer can approve. Remember, there’s always a chance for approval from an alternate financer, so don’t lose hope. Keep in mind your financial journey is not over yet.
Before Applying for a Personal Loan, it is crucial to confirm that your company is approved per the bank’s policy. Lenders want to be sure the company is solvent and will pay salaries on time, so they prefer to fund employees of approved concerns. Refer to the HDFC Bank Company Category List of approved companies, which most lenders acknowledge. Most lenders will process your loan if your employer is listed on the list, reducing the risk of rejection.
Don’t limit your options to just one lender. You can check with an alternate lender to see if your employer is featured in their company category list. Some financiers, such as ICICI Bank Personal Loan and YES Bank Personal Loan, process Personal Loans for applicants employed with non-listed companies. By exploring these options, you can increase your chances of getting your Personal Loan Approved.
Your CIBIL Score or history details all credit used and repayment patterns. The bank checks the customer’s credit history to seek assurance that the applicant will repay the loan on time. Some lenders prefer only to fund applicants with a sound credit history and have regulated a minimal CIBIL Score for processing a Personal Loan Application. The acceptable score for most Banks ranges from 700 to 730 points. If your CIBIL Score is below the lender’s required benchmark, the application is rejected after the CIBIL inquiry. Understanding your CIBIL Score and credit history is crucial, as it can help you make informed decisions and improve your chances of loan approval.
If you are a first-time credit seeker and have not used a Credit Card or taken a loan, your CIBIL will reflect as a nil score. Look out for lenders who do not require a CIBIL Score to process a Personal Loan. Apply for an HDFC Bank Personal Loan, as the HDFC Bank processes applicants’ loan requests without a CIBIL Score.
Keeping a Tab on your CIBIL Score is a good routine if you have previously used Credit. Before Applying for a Personal Loan, check your CIBIL Score to see if it is acceptable to the particular Lender. For a YES Bank Personal Loan, 730 points are the minimal basis points that the YES Bank considers when processing a Personal Loan. Check your CIBIL Score before Applying for a Personal Loan to avoid delays and a denial.
Verifying a customer’s residence and office premises is mandatory to approve a Personal loan. Most banks and NBFCs outsource the verification process to a third party. The application could be declined due to a verification failure for the following reasons.
The Personal Loan is unsecured and forwarded without any security therefore, it is vital to the Bank that the customer is contactable in case of non-payment of dues. The verification, therefore, is an essential part of the process. To ensure a successful verification, take note of the following:
Banks keep records of all Personal Loan Applications processed, and the result is noted. If your application has been declined due to a discrepancy in the documentation or if the Bank has recorded your documents as suspicious or not genuine, this will show up the next time you apply. Your request will be declined in the primary stage of the process.
When You Reapply, The Bank Will See the Reason for the Decline and Process Your Application Cautiously
Try to clear your previous record with the Bank that denied your application. Ask the Lender to reopen the last delinquency issue, such as when your PAN Card was declared invalid. Be ready to show them your original document and clarify the issue. If funds are needed urgently, apply with an alternate lender with whom you have an excellent previous relationship.
The Personal Loan Application is rejected if the Bank feels that you cannot afford the monthly instalment for the loan amount applied, as per the calculations for financial eligibility. Lenders have a policy for calculating the funds that can be issued as Personal Loans. The basics include:
If the applicant has an excess of EMI being paid or the salary is insufficient to afford an extra EMI after the monthly expense, the Bank will not approve the request.
If a lender rejects your application if the criteria for financial eligibility are unmet or you are declared overleveraged, you can work on creating surplus eligibility. First, check the following:
In Conclusion, prevalent Banks today that issue Personal Loans have similar policies, but they differ on some fundamental policies. Our experience and in-depth knowledge of the policies of prominent Banks and NBFCs can help and guide you, so do not take a Personal Loan Rejection from one Bank as final. You can fulfil your Personal Loan needs by applying to the right lender.
Understanding the world of Credit Cards can be complex, especially when getting a clear picture of payment terms. These crucial points help you know how much you owe when you need to make the payment and what will happen if you miss a timely payment. Also, before applying for any card, it is imperative to check the eligibility criteria. For instance, if you want to Apply for ICICI Bank, check the eligibility criteria for an ICICI Bank Credit Card.
A clear picture of these terms is beneficial in avoiding unnecessary debts and maintaining sound financial health. By understanding the key elements of credit card payments, like minimum payments, interest rates, and payment deadlines, you can manage your credit well and keep your financial health on track. With a better understanding of Credit Cards you can easily Apply ICICI Bank Credit Card.
Your credit limit is the maximum amount of money you can borrow on your ICICI Credit Card. Your card issuer determines it based on your Credit Score and income. Staying within your credit limit is vital to avoid over-limit fees and keep your credit utilization ratio low, which can positively impact your Credit Score.
The minimum payment is 5% of your monthly Credit Card bill. While paying only the minimum may keep your account in good standing, it can lead to prolonged debt and higher interest charges over time as the remaining balance accrues interest.
The statement balance is the total amount you owe on your Credit Card at the end of a billing cycle. It differs from the current balance, which includes all charges up to the present day. Paying off your statement balance in full each month helps you avoid interest charges, as these apply only to unpaid balances after the grace period ends.
The Annual Percentage Rate (APR) is the yearly interest rate charged on your outstanding balance. Different types of APRs apply to other transactions, such as purchases, Balance Transfers, and cash advances. A higher APR means higher interest costs if you carry a balance from month to month, so it’s essential to understand what APR applies to your card and how it affects the cost of borrowing. The APR charged by Banks for the balance amount to be carried over to the next payment cycle is 36%.
A grace period is between the end of your billing cycle and your payment due date. During this period, no interest is charged on your purchases if you pay your balance in full by the due date. Missing this opportunity can result in interest charges on current and future balances.
A late payment fee is charged if you don’t make at least the minimum payment by the due date. Late payments can also negatively affect your Credit Score, making securing favourable interest rates on future loans harder.
The lender may charge an over-limit fee if your spending exceeds your credit limit. While many Credit Card issuers no longer apply this fee, monitoring your spending is essential to avoid exceeding your limit, as it can also negatively impact your Credit Score.
A Balance Transfer allows you to move debt from one Credit Card to another, usually to take advantage of a lower interest rate. While this can be an intelligent way to reduce interest costs, balance transfer fees often apply, and failing to pay off the transferred balance within the promotional period can result in high interest charges.
A cash advance lets you borrow against your Credit Card Limit, often at a higher interest rate than regular purchases. Cash advances typically accrue interest immediately, without a grace period, making them an expensive option.
A foreign transaction fee is charged when you purchase in a currency other than your card’s default currency or through foreign merchants. These fees can add up, so checking your card’s terms before travelling or making international purchases is wise.
Paying on time is one of the most significant factors influencing your Credit Score. Consistently paying at least the minimum due by the due date helps maintain a positive credit history and avoids late fees.
Your credit utilization ratio—the amount of your credit limit that you’re using—affects your credit score. Staying under 30% of your credit limit is generally recommended to maintain a good score. For example, if your credit limit is Rs 100000, keep your balance below Rs3,0000.
Accumulating interest and fees over time can lead to mounting debt, making it harder to pay off your balance and negatively impacting your Credit Score. High balances and missed payments can stay on your Credit Report for years, affecting your ability to secure loans, mortgages, or even specific jobs.
Pay more than the minimum whenever possible to reduce your principal balance and minimize interest charges. Paying in full is the best way to avoid interest altogether.
Setting up automatic payments ensures you never miss a payment, helping you avoid late fees and potential damage to your Credit Score.
Review your Credit Card statements regularly for errors or unauthorized charges. Promptly addressing discrepancies can protect you from fraud and keep your finances in check.
Use budgeting tools or apps to monitor your spending and ensure you stay within your means. To help you avoid overspending and the stress of managing debt.
Promotional offers like 0% APR for a certain period can be enticing but often come with conditions. Ensure you understand the terms and plan to pay off the balance before the promotional period ends to avoid high interest charges. If you are looking for card offers, consider ICICI Bank Credit Card offers.
Many people believe that minimum payment is enough to manage their debt. However, paying only the minimum prolongs debt repayment and increases the total amount paid due to accruing interest.
While it’s possible to avoid interest by paying your entire balance each month, interest charges are inevitable if you carry a balance. Understanding when interest applies can help you make informed decisions about your payments.
Balance Transfers can be helpful, but they’re not always the best option. Fees, high post-promotional interest rates, and the temptation to continue accumulating debt are potential downsides to consider.
it is critical to understand the payment terms of Credit Cards to manage your finances efficiently. From knowing your credit limit to recognizing the impact of interest rates and fees, being informed helps you avoid pitfalls and keep your Credit Score healthy. Remember to regularly review your Credit Card statements and terms, pay more than the minimum when possible, and stay aware of how your Credit Card habits affect your overall financial well-being. Take the time to understand how your card works—your financial future depends on it. So once you know card payments, you can fill out the ICICI Credit Card Application and apply for it.
As we transition to a cashless economy, the convenience of making payments through UPI and bank transfers and the ease of online access to bank accounts have rendered cheques obsolete. The RBI’s regulation of KYC Documents has further enhanced the speed and transparency of lending. Customers’ credit transactions are promptly reported to credit rating agencies, enabling banks to verify the customer profile before extending further credit and providing a sense of security and ease.
CIBIL (Credit Bureau of India Ltd) is a pivotal player in the financial landscape, serving as the primary credit recording agency. It receives customer data from banks, NBFCs, and other lending agencies, meticulously chronicling details such as mobile number, PAN number, Aadhaar number, driving license, and other information lenders provide. This comprehensive and reliable record of your financial history is a critical factor in determining your creditworthiness.
Your CIBIL Score, a numerical representation of your creditworthiness, is a key factor in determining your Personal Loan Eligibility. CIBIL creates a report that details all loans and Credit Cards and their repayments. This report calculates a CIBIL Score ranging from 300 to 900 points. A higher Credit Score increases your chances of securing the funds you need for individual usage.
Maintaining a healthy Credit Score is not just helpful it’s crucial. A score of 720+ is mandatory to Apply for an HDFC Bank Personal Loan or an ICICI Bank Personal Loan. A lower score can limit your borrowing options, making striving for a higher Credit Score essential.
For a secured loan or a mortgage, a lower score of 700+ is acceptable. Are you alarmed that your score has fallen below the required benchmark? The following points could be the culprits.
Is there anything you’ve overlooked related to an old Credit Card or loan account? It’s common to have a pending Credit Card in your name that you don’t remember opening or a Credit Card you’ve declined. Charges for the card can add up over time and be marked as a pending account. Dealing with the issue might seem like a hassle, but ignoring it isn’t the solution because it can affect your credit rating.
Credit Card dues must be paid on the due date. Most Credit Cards, including the ICICI Bank Coral Credit Card, have a payment cycle of 30 days. If unable to pay the due amount, the option of paying a minimum of 5% must be fulfilled. Non-payment or delayed payment of a Credit Card is noted in your credit history, as are the days after payment. Non-payment for 30 days and above is a red flag that inversely affects the Credit Score.
The EMI date of your loan and Credit Card payment needs to be treated as sacred. The impact of delayed or non-payment of EMI is significant, as it can affect your credit history. If insufficient funds are in the account, the EMI will return unpaid. If there is a slip, transfer funds to your account immediately. Banks make a second attempt and present the EMI after 48 hours.
On non-payment, a message is forwarded to the customer for payment. If the instalment remains unpaid, finance charges are levied, and the delay is reported to CIBIL. The CIBIL Reports the days until the EMI is paid. A one-odd delay is acceptable, but if the customer repeatedly delays the EMI, the pattern is indicated in the record, and the score is downgraded.
Are you unable to repay your Loan instalment? Often, customers face trying times due to loss of employment or unprecedented circumstances and can fall behind on payments. The lender will contact you to remind you about the payment due. If the EMI remains unpaid, the delay is reported to CIBIL. The account is further forwarded to recovery agents to try to collect the pending dues. If the customer cannot make good the loan amount with the interest due, an offer will be made to the customer to make a settlement.
When a customer settles a debt, they pay the principal amount but waive the interest. The bank then closes the account and marks it as settled. The customer’s CIBIL Record will show the settled status with the remaining due amount. However, the customer needs to pay the entire amount owed. Settling the debt is not recommended as it can lower the CIBIL Score and impact future credit opportunities.
An unpaid loan, whether a secure loan such as a home loan, Auto Loan, Gold loan, unsecured Personal Loan, or Credit Card, will be reflected as a write-off in the CIBIL record.
Secure loans that remain unpaid for a while will cause the lender to reclaim the property or vehicle for which the mortgage has been taken. For unsecured funding, such as a Personal Loan or a Credit Card, the bank will try to reach the customer for payment if any balance is due. The days past due are regularly reported to CIBIL. Finally, the bank accepts an inability to recover the loan and reports the same as written-off or bad debt.
A Loan account that shows as a write-off in the CIBIL Record will mar the record for some time. If a customer cannot repay the loan for a valid reason, it is in the best interest to make good the amount to the lender when possible.
Choosing the right bank for a Credit Card or a Personal Loan is crucial. Applying to too many Banks is not a good idea, as each lender will send an independent enquiry to CIBIL to check the credit score and history. CIBIL, in turn, deducts 20 points for every Lender inquiry. Therefore, making careful financial decisions and choosing the right bank for your needs is essential.
Applicants with a previous default will like to try their luck with all the lenders. Contrary to expectations, when the number of Lenders is viewed in the CIBIL history, Banks are apprehensive that the customer might be taking credit from multiple Banks and will have a problem with repayment.
When Applying for a Personal Loan, go to the bank with which you have a good credit record and relationship. Or research the lender which will give you the best terms.
Managing credit is essential to maintaining a healthy credit score. Situations arise where repayments are delayed due to an emergency or financial stress if you fall short of funds, it’s a good idea to get a top-up on your existing loan or Apply for a Balance Transfer to reduce the EMI. If your score does come down, getting it back on track with a consistent strategy is possible. We at Yourloanadvisors.com are dedicated to providing our customers with solutions and guiding them to improve their credit profile.
In recent years, Credit Card usage has significantly increased in India due to increased consumer spending, e-commerce expansion, and enhanced financial inclusion efforts. The heart of this ecosystem is the credit card payment networks that connect your bank, you, and merchants to make transactions seamless and secure. Let’s discuss the critical aspects of Credit Card Payment Networks in India.
Credit Card Payment networks play a crucial role by acting as intermediaries between cardholders, merchants, and banks. They enable the processing of Credit Card Transactions, besides ensuring secure funds transfer from the cardholder’s bank to the merchant’s account. The four major globally recognised networks include Visa, MasterCard, American Express, and Discover. India also boasts its domestic network, RuPay.
RuPay: Launched by the National Payments Corporation of India (NPCI), RuPay aims to promote financial inclusion and decrease dependency on international networks. It is widely accepted across ATMs, online merchants in India, and POS terminals. Besides, it offers lower transaction fees.
The concept of a credit card was pioneered in 1950 by Frank McNamara. As the story goes, he was dining in a restaurant in New York City when he realised he had left his wallet at home. A year later, he returned to the restaurant and paid his bill with a small cardboard card known as the Diners Club card. Bank of America introduced its BankAmericacard next; the rest is history. SBI, or State Bank Of India, introduced the first proprietary Credit Card 1988. Soon after, other banks followed suit, but their adoption was relatively slow due to the low penetration of banking services and limited infrastructure. Later, in the 1990s and early 2000s, there was a surge in credit card issuance, driven by economic liberalisation and the arrival of private sector banks. Citi Bank, HSBC Bank, and later HDFC Bank and ICICI Bank introduced their Credit Cards. Further, the introduction of chip cards and contactless payments boosted the adoption and security of credit card transactions.
The Indian credit card market is thriving. The country witnesses millions of daily transactions, and over 70 million Credit Cards are circulated. The market marks intense competition among issuers and networks, each competing for a larger share of the expanding pie.
Banks issue Credit Cards with the option of payment gateways ICICI Bank offers its users a wide range of Credit Cards, such as the
ICICI Bank Sapphiro Credit Card
ICICI Bank Emralde Credit Card
ICICI Bank issues these Credit Cards with the option of payment networks such as the Master Card, Visa Card, American Express Card, and Rupay Card.
The backbone of Credit Card Transactions in India is the robust payment infrastructure, including:
The Reserve Bank of India (RBI) is crucial in regulating Credit Card payment networks. Key regulations include guidelines on interest rates, fees, charges, and mandates for consumer protection against fraud. Additionally, data privacy laws ensure the secure handling of cardholder information.
Challenges:
Opportunities:
Future Trends
The future of Credit Card Payment Networks in India looks promising, with the expected technological advancements, such as biometric authentication, AI-driven fraud detection, and enhanced mobile payment solutions. Market analysts predict continued Credit Card issuance and usage growth, driven by economic growth and evolving consumer preferences.
Credit Card Payment networks are integral to India’s financial ecosystem, offering convenience and security to consumers and merchants alike. With ongoing innovations and regulatory support, these networks are poised to play a pivotal role in the country’s digital payment revolution. As the landscape evolves, staying informed about the trends and developments in this space will be crucial for all stakeholders.
Anjali’s experience is a stark reminder of how a seemingly minor error can have a significant impact on your financial journey. Her application for an additional ICICI Bank Credit Card was rejected because her DOB did not match the bank’s previous records. This was a complete surprise, as she was confident that all her documentation was in order. On further thought, she began to check the details of her existing card, and lo and behold, there was an error in the Date of Birth as per the Bank’s current records.
Instances like Anjali’s are more common than you might think. Errors often go unnoticed until they become a hurdle in your financial journey. These errors, usually in minor details, can easily slip past when Applying for a Personal Loan, Credit Card, or any other credit facility.
By meticulously checking and comparing the significant details of your primary documents, such as the PAN Card, Aadhaar Card, Driving License, Passport, Voter ID, and Government-approved ID, you can prevent potential issues in your financial transactions. This level of scrutiny gives you the power to Avoid Common KYC Errors, putting you in control of your financial journey.
Date of Birth Mismatched: An individual’s Birth date is the primary identification detail to be noted and preserved. The time and date of an individual’s birth is the starting point of life and the first recognition of existence. This is the primary reference point to be used for times to come. A birth certificate is the evidence of the date of birth to which further details are added. Each time a KYC Document is issued, your date of birth is mentioned. Be alert that there is no mismatch in the Date of Birth entered in any certificate or KYC Document to avoid discrepancies for further documentation.
Name Mismatched: The applicants’ names and spelling should be ditto on all the primary documents. For example:
The name on the PAN Card is Rahul Kumar Dutt.
The driver’s license has the name Rahul K Dutt.
Though the above seems like the same person for practical details, it is unacceptable for Official KYC Purposes. This confusion often occurs when a customer involuntarily gives one ID document to open a bank account and uses an alternate ID for a credit card application. The name mismatch is a significant reason for the Lender to withhold or reject the request for a Personal Loan or a Credit Card, underscoring the gravity of such errors and their potential impact on your financial transactions.
Spelling Error: The spell check is a must for the identification and address details of all documents. A name could be misspelt, or the address mentioned on two different documents may not match exactly as per the example discussed below:
Aadhaar Card – Mrs Sarika Kapoor 121 Nyaya Marg. New Delhi 21
Bank Statement – Mrs Saarika Kapoor 121 Nyay Marg. New Delhi 22
The error may not be noticeable, but it can be problematic when applying for further credit. Spelling errors can happen due to clerical mistakes while doing data entry or as a wrong copy from a previous document. An incorrect name spelling can often lead to a different individual match when the individual’s CIBIL is checked. An address spelling error will make it challenging to identify the residence and can affect Personal Loan Eligibility.
Documents not updated: The address change, if not updated in the documents submitted as per the current residence location, can cause a verification decline as the old address is captured by the lender staff when entering the details of the customer is possible and can be the cause of a verification decline when the Banks executive makes enquiries at the location entered. The document submitted as an address proof must reflect the address where the applicant is currently residing. Giving a prominent landmark when filling in the address will go a long way toward conducting a successful physical verification.
Submit Clear Copies of Documents: All documents submitted when applying for a credit facility online or by giving hard copies must be updated and precise. Validity is important, as an expired document, such as a driver’s license or passport, will lead to delays.
With digital processing, applicants Apply for Personal Loans Online by giving soft copies of documents. If the original documents lack clarity, processing is withheld. Further, with the introduction of Video KYC, original documents are verified over a video call with the Bank officer. The verification is declared unsuccessful if the records are poorly maintained or damaged.
Other KYC Requirements: The Aadhaar card is now a universally accepted KYC Document with all the details required to process a loan or a credit card. For verification, the Aadhaar card must be linked to the applicant’s mobile number. It is used to verify biometrics and displays the customer’s current address.
The PAN Card must be connected to the Aadhaar card and the bank account; customers with duplicate or 2 PAN cards must submit both cards, as the bank will discover them during the verification process.
Applicants must ensure their KYC Documents are accurate to expedite the processing of loans or credit cards. Incomplete information can also lead to CIBIL errors when the lender views the CIBIL during the loan process.
The RBI (Reserve Bank of India) is coming down on lenders to maintain accurate KYC Records of customers, and banks, in turn, are now prioritising collecting customers’ KYC while processing credit transactions. Doing a check while keeping the above error possibilities in mind will help to enhance your experience with credit further credit applications.
As economies and corporate culture continue to grow, incomes have increased. This has amplified demand for infrastructure facilities due to improved opportunities for salaried and self-employed individuals. Governments, private banks, and financial institutions are offering credit facilities, including secured and unsecured credit to support this development.
Dealing with unexpected expenses can be difficult, whether related to lifestyle, overspending on holidays, or expenses for weddings and family celebrations that exceed the budget. In the past, people often borrowed money from a well-off friend or relative when they needed extra funds beyond their monthly payments or in case of an emergency. A Personal Loan fills this vacuum as families become nuclear and relationships impersonal.
A Personal Loan is unsecured funding provided for a short term and intended for personal use. The loan is granted based on the applicant’s profile and supporting documents.
Initially, Banks gave restricted amounts as Personal Loans, and usually, the customer had a relationship with the bank. Funds for Personal Loans were approved at the bank’s discretion, based on the available customer information.
Over the years, the landscape of a Personal Loan has significantly transformed. It is now a structured product easily accessible to salaried and self-employed individuals for their specific needs. The updated Banking systems, digital innovations, and customer credit details recorded by CIBIL now enable lenders to check the background and profile of customers and prioritise their lending segments.
Digitalisation has further enhanced the process. Now, an applicant can Apply for an Online Personal Loan with convenience. Documents are uploaded online, and the funds are disbursed electronically with efficiency and speed as an instant personal loan.
A robust demand has encouraged banks such as HDFC Bank, ICICI Bank, AXIS Bank, and YES Bank to process Personal Loans as a primary product. Registered NBFCs and online applications also actively market Personal loans with a structured product and policy, prominent.
The basis for a Personal Loan is the customer’s intention and ability to repay the loan promptly. Personal Loans are unsecured funding therefore, banks want to consider specific profiles and employment aspects when issuing a loan. Primary factors for the calculation of Personal Loan Eligibility for loan amount include the following:
Income: The applicant should draw a regular monthly income credited to the bank salary account. The minimum salary requirement to receive a Personal Loan is ₹ 25k and above.
Employment: The applicant’s employer is an essential factor in determining Eligibility for a Personal Loan. The reasoning is that working for a reputable company with sound financial stability and growth potential ensures a consistent income. A borrower who receives their salary on time is less likely to default on their loan EMIs. Banks have compiled a list of approved companies and prefer to fund applicants working in organisations featured in the approved list of companies.
Residence Details: The applicant’s living conditions reveal much about the personal profile. A customer living with a family in a family or self-owned home indicates a secure income. Suppose the applicant is residing on rented premises. In that case, the documented proof of a permanent address will help instil confidence in the lender that the customer is easily reachable in case of a delay in repayment.
Credit History: Individuals who manage their finances well and pay their dues on time will easily access credit when needed. The Credit Bureau of India Ltd (CIBIL) maintains records of all individuals’ financial transactions, including their loan history and repayment track record. Lenders typically conduct a CIBIL check to verify an applicant’s repayment history before approving a Loan or Credit Card to ensure that the applicant has a strong credit record. A CIBIL Score of 700 points or higher is considered an eligible score for obtaining further credit.
Stability and Continuity: “Financial institutions seek out customers with a stable background and the ability to comfortably repay borrowed funds. In this context, an applicant who has been consistently employed by the same company or has switched jobs without a gap will be viewed positively. Conversely, individuals with less job experience and prolonged periods of unemployment are considered high risk. Likewise, customers who have resided in the same area for an extended period are less likely to default on payments than single individuals who frequently change their addresses.”
Age: The minimum age required to apply for a personal loan is 23. An applicant can repay the loan until the age of 62. If proof of retirement age is provided, a further extension until age 65 is granted.
Education: To apply for a personal loan, an applicant must have a graduate degree. Further degree holders and professionals such as doctors and dentists are treated as a particular category and offered enhanced terms and conditions.
Loan Amount: Prominent Banks such as HDFC Bank and ICICI Bank grant funds from ₹ 1 lakh to 40 lakhs as a personal loan. Banks and NBFCs have individual policies regarding the loan amount issued to the applicant, and loan amounts are issued according to the applicant’s ability to pay the EMI after the monthly expenses are met.
Tenure: The tenure or term for repayment of a Personal loan is 12 to 72 months. The tenure is allotted according to the applicant’s ability to pay the monthly instalment. The tenure allotted at the time of disbursal of the loan remains fixed.
The interest rate for a personal loan is reasonable, considering it is unsecured. High-income customers borrowing large sums are offered discounts, while a lesser loan amount incurs a higher interest rate.
Interest Rate: The personal loan interest rate ranges from 10.75% to 18%. It is applied at a monthly reducing balance and remains fixed for the entire tenure.
Processing Fees: The processing fee is a one-time cost the lender pays. This amount is deducted from the loan amount disbursed as file charges. Lenders Levy a processing charge according to the individual policy; the main factors influencing the processing fees are the approved loan amount and the customer’s income.
Other charges include prepayment charges and the cost of repaying the loan before the expiry of the tenure. Banks will charge a nominal fee for other requested documentation.
It is advisable to check if you are comfortable paying the EMI before applying our EMI Calculator, which also serves as a Personal Loan Eligibility Calculator, will help you arrive at a convenient EMI based on the above inputs.
To process a Personal Loan, minimal readily available documentation must be submitted. Applicants can Apply for Instant Personal Loans Online or give hard copies of documents. Banks require income details to determine monthly earnings and proof of customer identity and address as per the KYC norms mandated by the RBI (Reserve Bank of India)
The norm is a salary slip that indicates the monthly remuneration and a corresponding credit reflected in the Bank statement for three consecutive months.
Per the KYC norms, a customer must submit proof of identity for all credit transactions, such as a PAN Card confirming the customer’s details and serving as a signature proof.
The Aadhaar card is a universally approved document that confirms the customer’s identity and address. Alternate documents that serve as proof of address include a passport, driving license, voter ID, and any government-approved document.
The Bank will verify the residence and office to check customer availability. With the introduction of Video KYC, the process is now completed digitally.
Once the Personal Loan is sanctioned, the customer must ensure enough funds are in the account to clear the EMI before the due date. Not only will penalties be charged for the number of days the EMI remains unpaid, but the credit score will also be affected. Due to the unsecured nature of a Personal Loan, it is the easiest way to increase your credit score and vice versa. This results in the inability to get further credit when required in the future.
A Personal Loan can be your friend in need, providing you with the comfort and security of accessing funds instantly when required and at reasonable costs.
The KYC (Know Your Customer) process is mandatory when opening a new bank account, Applying for a Credit Card, or taking out a Personal Loan. The RBI (Reserve Bank of India) has regulated that the service provider must verify the identities of all customers seeking to use financial products to reduce the risk of money laundering and financial fraud.
For Banks and NBFCs, the KYC Process is crucial in confirming customer details and residence. This diligence not only helps prevent terrorist funding and fake interactions but also significantly reduces the risk of financial losses to the Bank when the customer defaults, ensuring the security of the financial system. The maintained KYC records enable effective recovery of the outstanding amount.
The onset of COVID-19 brought unprecedented challenges, with movement restrictions in place to curb the spread of the virus. However, the widespread use of mobile and internet communication technologies played a crucial role in overcoming these challenges, ensuring that essential services could continue.
Overnight delivery apps and online platforms mushroomed, offices were shut down, and employees were asked to work from home. Official meetings were conducted online, and social functions took to Zoom and YouTube, allowing friends and family to participate in the proceedings.
During the pandemic, the RBI allowed banks to open savings and salary-based accounts through online verification. This helps mitigate the challenges of the physical verification process. Customers can upload their documents online, and the bank can verify them through a secure interface.
The success of online verification has led the RBI to extend the jurisdiction for Banks to conduct Video KYC for Processing Personal Loans and Credit Cards. Prominent Banks such as ICICI Bank, YES Bank, and HDFC Bank have a secure system to perform video KYC for customers applying for financial products.
When applying for banking services, the customer must fill out a request form with personal and professional details and submit corresponding documents to support the application.
The RBI has approved standard documentation to initiate a Customer KYC Verification. These include:
Clear and valid copies of KYC Documents will be submitted to enable a successful verification. The KYC Process was initially conducted manually, with the customer going to the Bank to show the original documents or a Bank officer visiting the residence or office to meet the customer to check that the documents submitted are true copies.
Please keep in mind the following requirements for the Video KYC Process:
– The performing bank or organization must be registered with the RBI (Reserve Bank of India) and authorized to conduct the process.
– A secure Wi-Fi connection must be established between the user and the bank officer without any noise or disturbances and with good visibility.
– The applicant’s formal consent is necessary to proceed with the Video KYC.
– Clear copies of KYC documents should be readily available before initiating the process.
– The applicant’s mobile number must be linked to PAN and Aadhaar cards.
– The KYC can be conducted from the documented residence or office address as mentioned in the form details.
KYC Verification is a mandatory process for approving any financial transaction. Credit can be denied if the Lender is not satisfied that the documents submitted are true copies. The Financer can conduct the KYC Process at the primary stage after checking the CIBIL Score and the company category list. Or after all the stages are completed and the request is approved.
Banks use online systems to improve their processes as they prepare for the digital era. People looking for credit are also eager to engage in digital transactions. The Video KYC process eliminates the need for lengthy physical verification and reporting. Customers from any part of the country can now apply for and verify their personal loans entirely online. Leading banks like HDFC Bank, ICICI Bank, and YES Bank have introduced Video KYC, a secure process to prevent fraud and illegal activities.
Though the Video KYC Process is successfully conducted, the industry may not be ready for a complete transformation. Not all customers may have the facility to make online contact and execute the Video KYC Process. Applicants may not have the time and capacity to make contact if the Video KYC Fails on the first attempt.
Although the technology has not yet been adopted by all financial organisations, applicants with vintage documents can face clarity issues while conducting a Video KYC. Therefore, physical verification will remain an alternative for some time to come.
Starting your first job is not just a new phase in your life but a significant step towards financial independence. It’s when you begin to earn and take charge of your finances, transitioning from a student with limited financial responsibilities to a professional needing to manage expenses and savings. This shift, the culmination of years of education and training, is the perfect opportunity to start shaping your financial future.
With financial independence, you can create your living environment, furnish your living premises, and design a comfortable home that reflects your unique style and preferences. This is not just about financial freedom; it’s about the sense of achievement and empowerment that inspires you to take control of your financial journey.
As a fresh candidate, your employer’s decision to hire you and open a bank account for your monthly remunerations with leading banks like HDFC Bank, ICICI Bank, Axis Bank, and YES Bank is a significant sign of trust and stability. This regularity of salary transfers provides a strong sense of security and lays a solid foundation for your financial future, giving you the confidence to plan and invest.
As a new job holder, you may consider getting a Credit Card. It’s a common aspiration, as credit has become the norm, and banks offer Debit Cards for ATM Transactions and cashless payments. A Credit Card can provide unparalleled convenience for spending on necessities and daily usage. However, it’s important to note that banks typically require a year of work experience to extend credit on behalf of the account.
A Credit Card offers a credit-free period of 30 days and can be used conveniently without the hassles of carrying cash. Primary usages include the following:
The ICICI Bank Coral Credit Card provides the best benefits for first-time credit seekers, considering the usages and advantages needed. The benefits of the ICICI Coral Credit Card are best suited which include:
The ICICI Bank Coral Credit Card is particularly beneficial for new job holders. With its low annual fee, cashback offers, and easy application process, it’s designed to meet the needs of those just starting their professional journey.
Setting a ‘conservative limit’ is essential when you get your first Credit Card. This refers to a credit limit lower than the maximum amount the bank is willing to offer, usually based on your monthly income. Accepting a conservative limit is wise, as it helps you manage your spending and avoid accumulating too much debt.
Your Credit Card is a powerful tool for cashless transactions, but it’s crucial to keep the details of your card, such as the PIN and CVV Number mentioned in reverse, private. Sharing these details can lead to unauthorised card use and potential financial loss. Using your Credit Card responsibly can avoid unnecessary debt and maintain a healthy financial status.
With the freedom of cashless spending on your Credit Card, you tend to spend without knowing that the money will be paid later. Maintain a record of the expenditure and treat the card as a debit card, knowing there are enough funds in your account.
The credit-free period of a credit card is 30 days. After the 30-day cycle is completed, a statement of account is generated. A grace period of 10 to 15 days is further extended to pay the dues. Mark the payment date on your calendar to ensure you do not forget, as a delay can cost you penalties and will be noted in your CIBIL history. Creating an auto-debit payment system from your Bank account is an option.
Upon receipt of your credit card, the literature with the terms and conditions is provided.
Take note of these details for optimal Credit Card Usage. Using your Credit Card regularly and making timely payments will help improve your CIBIL Score, strengthen your credit standing, and prepare you for future financial endeavours.
In today’s consumer-driven society, the availability of easy credit from banks and financial institutions has fuelled the desire for a better lifestyle and progress. Whether you’re in the market for a new home or a mobile phone, the option to make a minimum payment and convert the remaining balance into installments payable over a suitable period is a common practice. This is what we refer to as an EMI (Equated Monthly Installment), a financial tool that plays a significant role in managing your financial commitments.
When Applying for a Loan, it’s common for customers to focus on the interest rate and other charges. However, it’s equally important to consider the monthly installment. A manageable Equated Monthly Installment (EMI) is not just a financial obligation but a tool that allows you to repay the amount without straining your monthly budget, providing a sense of financial security and peace of mind.
Understanding how the EMI works is critical to effective loan planning. The interest rate applied to the loan amount issued to the customer is divided over the tenure for which the loan is sanctioned. Each EMI (Equated Monthly Installment) includes a part of the principal and the interest charged. For both mortgage and unsecured loans, the interest is charged on a monthly reducing basis. This means that with the payment of each installment, the amount of principal owed reduces, and the interest is applied to the reduced balance. Despite the changing ratio of principal and interest, the EMI remains constant for the entire tenure, making it easier to plan your monthly budget.
Before taking out a loan, using an EMI Calculator can be a game-changer. It allows you to determine the monthly installment in a flexible and adaptable way. You can adjust various parameters, such as the loan amount, interest rate, and repayment tenure, to find the most suitable installment. If the Calculated EMI seems too high, you have the power to consider extending the repayment term, applying for a lower loan amount, finding a lender with a lower interest rate, or opting for a shorter repayment term with higher EMIs. This tool provides a sense of reassurance and confidence in your loan planning, putting you in the driver’s seat of your financial decisions.
Using an EMI Calculator can help prospective borrowers determine a suitable EMI that fits their monthly budget, thus saving valuable time and effort during the loan application process. This efficiency in financial planning allows the borrower to focus on other essential aspects of their life, making them feel more productive and in control of their time.
The EMI has become part of daily existence, a tool that has helped millennia better manage life and emergencies. Salaried persons can dream of owning their home and going on a vacation by appending a home or Personal Loan and making the repayment via EMI. Financial shortfalls during emergencies can be met with a Personal loan. Banks such as HDFC Bank, ICICI Bank, and Axis Bank now disburse Personal Loans Online, and repayment is done with easy EMI over 12 to 72 months.
Self-employed individuals can Apply for a Business Loan to extend their existing work and upgrade their machinery. Financial shortfalls during weddings and family functions are conveniently met, and funds are repaid over monthly instalments or EMI.
Loans from Banks and NBFC fuel the Auto industry, and most individuals find it convenient to have their transport. With a minimal down payment, the cost of the vehicle is paid in monthly instalments for personal or commercial usage. Vehicles are movable commodities, so banks can recover them if the EMI is not paid.
Banks and financial institutions are prepared to provide funds and generate income from repayable loans, benefiting both the borrower and the lender.
“When borrowing, it’s essential to clarify and understand the terms of the repayment schedule. Make sure that the payment of the EMI or the monthly installment comfortably fits your budget, as any delay or non-payment will negatively impact your credit ratings.
Keeping track of the EMI Payment dates and maintaining a sufficient balance is obligatory, as a bounce will negatively impact your record.
Accumulating many EMIs without proper budgeting can lead to a debt trap. Borrowing excessively for extravagant spending without considering your budget may also lead to financial difficulties. It’s essential to be mindful of this because banks and financial institutions are unlikely to lend to individuals who are overleveraged and paying too much towards their EMIs.
Repaying credit via instalments makes fulfilling obligations and comfortable living affordable, but this should not be taken for granted. The commodity is not yours until you have paid the amount due as an EMI or through a downpayment.
After the loan request is approved, an agreement is initiated between the borrower and the lending organisation, which mentions the terms and conditions of the loan. These include:
A loan repayment schedule is issued, giving details of each instalment and the component of the interest and principal deducted over the tenure of the loan.
The EMI amount for a Personal Loan is fixed at the time of disbursal and is deducted from the applicant’s account monthly. A floating interest rate is applicable for a mortgage loan, adjusted according to the PLR (Prime lending rate) declared by the RBI (Reserve Bank of India).
The customer’s prerogative is to maintain sufficient funds in the account to clear the EMI for all credit taken. A bounce or return will negate the Credit Score and the track record, whereas an on-time payment record for your EMI will go a long way in getting you additional credit when required with the best terms!
Whether you face daily shortfalls or unexpected emergencies, funds are constantly needed. The good news is that banks and NBFCs offer various credit options, allowing you to choose what suits you best.
There’s a solution for every need, from secured credit options like mortgages, auto loans, or gold loans to unsecured possibilities like Credit Cards or Personal Loans for smaller amounts. This flexibility empowers salaried individuals with a regular income, allowing them to tailor their borrowing to their specific circumstances.
A Credit Card is a handy credit tool that allows for easy spending. Most lenders sanction a credit-free period of 30 to 50 days to pay the monthly bill amount. If you cannot pay the total amount due, a minimum of 5% must be paid.
To facilitate the payment, the customer has a choice of converting the balance into a consolidated amount or as a Loan, which is payable in monthly instalments. Alternatively, a loan on behalf of a Credit Card is also offered to cardholders seeking funds for other personal usage and emergency needs.
When you take out a Credit Card Loan, the issuer provides the funds to be repaid with interest in equated instalments that form part of the monthly statement to be cleared on the due date for the tenure applied.
A loan against a Credit Card is available to a holder because there are no defaults in the payment history and enough balance on the card to support the loan. For example, an ICICI Bank coral credit card holder with a limit of ₹ 200000/—can borrow ₹160000/—if ₹ 20k has already been spent on the card, then the amount is ₹140000/—The card can only be used for the limit balance until the monthly EMI gets paid.
The monthly instalment for the loan appended forms part of the monthly statement presented to the customer and must be paid on time.
Benefits: Credit card payments are made immediately upon purchase of the item, and the holder can simultaneously request that the amount be converted into a loan. Funds can also be received in the account on request as a Personal Loan for shortfalls or emergency needs.
Thus, the customer has immediate access to funds with no paperwork, and since the credentials have been verified previously, the Lender can request funds on the go.
The interest rate applicable to a Credit Card Loan is reasonable, and the loan amount can be repaid anytime.
Precautions: Although the Loan Against a Credit Card seems like a perfect deal, there are underlying precautions and restrictions to be noted.
A Personal Loan has become the most popular credit tool today when funds are required for individual needs. Banks are keen to lend funds for a short term, which can be used as needed and repaid with fixed monthly Installments.
HDFC Bank, ICICI Bank, AXIS Bank and YES Bank Service Personal Loans to account and non-account holders for loan amounts of up to ₹ 30 lakhs for 12 to 72 months. The personal loan policy for most Banks is similar, with each lender having specialised norms and target segments.
To initiate the process, the applicant must submit the requisite income and KYC Documents with online processing, applications are expedited, and funds are disbursed within 48 to 72 hours.
A loan on behalf of a credit card is credited to the account directly without any questions, which works well in emergencies. However, the amount cannot exceed the card’s prescribed limit.
Timely repayment of the instalment is paramount, as delays can lead to further costs. With the excessive interest charged, there is the danger of getting into a debt cycle. Factually, with a credit card, the lender is giving you funds to return the original amount and will charge you interest on the same!
The terms and conditions of a Personal Loan are structured, and the interest charged is reasonable. To be Eligible for a Personal Loan, the applicant must have a good repayment track record of credit taken. If excess dues are to be paid as a balance on your card, taking a Personal Loan to repay the same is a good idea!