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Apply Online to Top Up their existing Personal Loan or reduce costs by transferring their balance to an alternate lender.
Options are restricted in the case of an App Loan. Axis Finance Ltd, a wholly owned subsidiary of Axis Bank, is the only financer that accepts the Balance Transfer of an App Loan.
App loans give instant cash and work when small A Personal Loan from a mobile App or to apply online? The better option.
In today’s fast-paced life, individuals prioritise instant gratification for fulfilling their needs. Gone are the days of extensive paperwork banks and NBFCs offer quick credit in the form of personal loans to eligible customers for individual and emergency needs.
Mobile phones are now our constant companions, with multipurpose reach for various utilities and daily needs. A mobile App can be easily accessed on the go and allows users to receive timely financial assistance through a smartphone or tablet’s mobile browser.
Mobile banking apps offer unsecured loans such as cash, early pay advance salary, and personal loans. The app can be downloaded from the Google Play Store or App Store and must be registered with the RBI (The Reserve Bank of India Ltd).
App loans are short-term credit and are most popular with Salaried persons and offer conservative loan amounts from ₹ 15k to ₹ 5lakhs for emergency costs or shortfalls in personal expenses.
A Personal Loan App interface emphasises the speed and convenience of appending funds. Instant Personal Loan offers are displayed directly on the screen.
The applicant must provide basic information, personal and professional details, and the required loan amount to initiate the process.
The Aadhaar and PAN cards are the primary documents to process the request. The applicant’s mobile number must be linked to the Aadhaar card and bank account: the customer’s details are verified online, and the loan is decided upon.
As the customer permissions have been solicited previously, the amount is transferred to the account directly.
With an app downloaded on a mobile phone, funds are available with a click when needed most. The USP is the ease and convenience of getting instant funding when required you only need a browser and Wi-fi connectivity.
Applicants no longer need to access a computer facility or make extensive copies of documents minimum documents and details are required to process the loan, which is transferred almost simultaneously after the formalities are completed.
Previous credit history and a CIBIL Score are not mandatory to receive funds from an app loan, though each financer has their policy and can require a credit score to give increased loan amounts.
Considering the easy customer reach and promise of ready credit, Personal Loan Apps have quickly gained popularity. As a result, a surfeit of Loan Apps has been created. The RBI has notified over 700 fake apps that have been banned because they are not registered and do not have the requisite permissions for operations.
Before downloading the App, it is vital to check its authenticity, as persistent offers of prompt funding can easily mislead. If the App asks for undue permissions, such as access to your camera or other data, it can put your personal information at risk and should be avoided at all costs.
Be sure to verify the app’s original sponsor. There should be a customer care number that is reachable when required. An alternate financer may fund the Personal Loan, and the app’s advertiser could be a third party. In such a situation, the advertiser is just the face and may not be responsible for solving any queries or problems that may occur.
Check the terms of the funding beforehand to avoid any surprises or misunderstandings at a later date. The interest rate and EMI payable must be easily affordable to avoid pressures for payment.
We no longer stand in queues to update our passbooks, check our account balances, or rush to the Bank to withdraw funds all of the above is possible from the comfort of our residence or office. Operating procedures have been transformed to keep up with the digitalisation of the banking industry.
The online platforms are uploaded on leading Banks HDFC Bank, ICICI Bank, and YES Bank websites. Applying for secured and unsecured products is now possible by filling in the required information and uploading the documents.
On receiving the request for a Personal Loan, a loan account number is created, and the applicant is informed that the request has been registered. If there is a pendency in the documents, the applicant is notified.
If the lender requires a CIBIL, the applicant’s CIBIL Score is generated to check whether it is above the necessary benchmark and if there are no aberrations in the CIBIL history.
The lender will then conduct a verification for the KYC and Income documents,
The ICICI Bank provides a link for Video KYC, which can be obtained from the applicant’s residence or office to expedite the personal loan process.
The bank’s underwriter will then assimilate the inputs and calculate the customer’s eligibility. A Personal Loan EMI Calculator can confirm the EMI before applying.
The customer signs an agreement acknowledging the loan terms before transferring the loan amount to the Bank account.
Unsecured funds issued once as an Online Personal Loan can be used as the applicant requires. Customers needing excess loan amounts can apply online for loans of ₹ 1 Lakh to ₹ 40 Lahks.
The interest rate offered for a Personal Loan is 10.75% onwards and is calculated at a reduced balance, giving the applicant funds without any security at the lowest interest rate. The repayment tenure of a Personal Loan can be extended up to 72 months, depending on the EMI the applicant can afford.
The process for an Online Personal Loan is transparent, and the customer is clearly informed of all the terms before disbursing the loan.
With an Instant Online Personal Loan, the processing is expedited so that the customer can receive the loan amount required within 72 hours.
Funds received as a Personal Loan from an App or by applying online both serve the purpose of funds for individual or emergency usage. Though an App disburses funds immediately, the sequence moves quickly, and the customer may not understand the implications of the loan.
Financial payment apps advertising pre-approved Personal loans have access to customer KYC information linked to the Bank account and offer loan amounts on behalf of banking transactions. The Loan financer is usually a third party who will ultimately be responsible for any further dealings. Without transparency, reaching out to the financer can be tedious.
On the other hand, Applying For a Personal Loan Online follows a streamlined procedure. The customer is informed of the progress of the request, and finally, the loan amount is disbursed only after the applicant has accepted the terms and conditions.
Costs of the Loan
Having taken a Personal Loan through an App in an emergency, the applicant later realises the high-interest rate when the EMI is deducted from the Bank account. A delay in the payment of the EMI will result in a high penalty and aggressive follow-up from the financer.
Apps provide limited loan amounts with higher costs, whereas an Online Personal Loan has funding available per the customer’s requirements. The interest rate for an Online Personal Loan is among the lowest in the unsecured loan category.
A customer can choose a suitable EMI with a choice of repayment term. In contrast, an App loan EMI is inflated and strains the budget with a restricted repayment tenure and high interest.
Checking an app’s authenticity may be challenging, as there is a surfeit of offers available on mobile. If you need funds urgently, you can choose the wrong lender involuntarily.
Apps are vulnerable to the leakage of personal information that can be misused if permissions are granted without reading the fine print.
When an applicant applies for a Personal Loan Online, it is in the protected domain of the lender. Information relevant to the process is asked with the borrower’s acknowledgement.
If surplus funds are required, customers can appums are needed that can be repaid quickly within a targeted time frame. Customers already in debt and borrow money from Apps to relieve their current debt are in danger of getting into a debt cycle.
Online Personal Loans are structured loans issued to applicants fulfilling the bank’s eligibility criteria. They have clearly defined terms and reasonable costs.
Owning a Credit Card has become a lifestyle necessity. When an individual earns a regular income, Applying for a Credit Card becomes the next objective. Even if there is no urge to use it, offers stream in from various Banks and are hard to resist.
A Credit Card is handy because it allows spending to be repaid later. While enjoying the benefits, one usually acquires additional cards from other issuers.
The statement or bill for the payment of Credit Card spending is generated after a month. A user is granted a grace period of up to 15 days to pay for the due date. If an individual cannot pay a minimum amount due, 5% of the total bill must be deposited. The balance is carried over to the following statement.
The relief of not having to pay immediately comes at a cost, as 36% interest is charged on the pending amount. Any further card usage, if not paid on time, also attracts interest.
Therefore, without adding expenses, the amount due will double in two months, and if an applicant has numerous cards, the dues can mount considerably. Before realising it, an individual can fall into a debt trap.
An individual can use a Credit Card to pay for expenses and credit transactions up to the assigned limit. The card issuer will prescribe a limit according to the applicant’s income. If the limit has been used, further transactions are declined until the dues are cleared.60% to 70% of the card limit is assigned for credit transactions and 30% to 40% for cash withdrawal.
The cash withdrawal facility is meant for emergency use. The cash must be repaid shortly, as interest is charged daily on the money drawn.
Suppose the usage of a Credit Card or multiple Credit Cards has exceeded 70% of the limit, and the holder has withdrawn cash on behalf of the card and does not have the resources to pay after the billing cycle is complete. In that case, the dues must be cleared as per the statement’s due date, or other options, including a Balance transfer, must be considered immediately.
The expenses made using a Credit Card should be accounted for in the monthly budget. Ideally, when swiping a credit card, the payment amount should be available in the account or expected before the billing cycle is complete. Indiscriminate spending on a card can cause budgetary problems when the payment due date is near.
If you have made excessive expenditures due to an emergency, occasional leisure expenditures, or the temptation to buy an item that is currently unaffordable, swiping your card will help.
Suppose funds are unavailable for the total amount due. In that case, the following options will help tide over the situation: Contact the card issuer and request that the due amount be converted to equated monthly instalments, which will be charged a fixed interest, or transfer the balance to an alternate card.
If multiple cards have been used and repayment is unaffordable, Apply for a Balance Transfer of the Credit Card dues to a Personal Loan.
Leading Banks such as HDFC Bank, Axis Bank and Kotak Bank offer to take over pending Credit Cards dues for eligible applicants. Taking timely action to Apply For a Balance Transfer of Credit Card dues will serve well, as the transfer can be denied if the transfer criteria are unmet. Although each lender has exclusive criteria, the basics are similar.
The minimum, 5% of the total due, must be paid on time by the payment date. The card statement must not reflect negative remarks such as over-limit usage fees, delayed payment charges, or overdue charges. The total unpaid dues of all the credit cards must not exceed five times the monthly salary drawn.
Axis Finance is a wholly owned subsidiary of Axis Bank that takes over the balance payment of Credit Cards if the EMI is up to 6o% % of the applicant’s salary.
The applicant’s CIBIL Score must be above the required benchmark, and the profile must meet the bank’s policy requirements.
Transferring credit card dues to a Personal Loan with an external financer is quick and convenient. The process takes 5 to 7 working days.
The applicant applies for a new loan with the required documents and requests a balance transfer of credit card dues. Copies of the Credit Cards with the statements for the last three months are to be submitted.
The initial stages of processing are similar to those of a fresh loan. Most banks permit the transfer of dues for a maximum of three credit cards. After checking for CIBIL and verification, eligibility calculations for the loan amount are done.
Banker instruments favouring Credit Card accounts are made and despatched to the applicant. The applicant must deposit the same in the relevant Banks and obtain deposit receipts.
The EMI for the amount issued is presented to the customer’s Bank account on a designated date for the assigned tenure.
Thus, the cardholder is relieved of debts and excessive interest that Credit Card companies charge. In comparison, the interest charged for a Personal Loan is 15% to 18%, half the rate for unpaid credit card dues.
The applicant can choose a suitable tenure with an affordable EMI to repay the Personal Loan, and they can also use credit cards as the dues have now been cleared.
The CIBIL Score will also increase immediately as the unsecured debt merges and the payment is made.
The key is to make a timely decision, as Credit Card debt multiplies and quickly becomes out of hand. If delays or returns of payment are noted, the Balance Transfer will have to wait until the applicant maintains a clean record for a minimum of three months.
A Credit Card has many advantages, but prudent usage and timely payment are paramount.
What do you do when you urgently need funds during a financial crisis and don’t need restrictions on using the money, like in a home or car loan? The answer is you go for a Personal Loan. Personal Loans are unsecured loans that are much more convenient than conventional ones because you can pay them back over time in affordable instalments and receive swift disbursement with minimal documentation.
Although Personal Loans are an excellent way to get money quickly, banks impose specific fees on this loan because it’s unsecured- meaning you aren’t obliged to put up any assets as security for the loan. Besides, Personal Loan Charges are also different based on the bank and the interest rate. So, without further ado, let’s find out the common Personal Loan Fees associated with the amount you borrow so you can have a precise estimate.
The primary cost of funds is the personal loan interest rates starting from 10.65% p.a. For ICICI bank, you can avail of an unsecured loan at EMI as low as Rs 1878/ Lakh. For HDFC Bank, the bank offers personal loans with interest rates ranging from 10.65% to 20% per annum, with fixed rates. The interest rate for a personal loan is applied at a monthly reduced balance and is fixed for the entire term.
This is the amount the bank charges when your loan is processed, and the bank charges a small amount of the overall loan as an administrative expense. The processing fee or the personal loan origination fee amount is minimal, and the charge is around 0.5% to 2.5% of the overall loan amount. Note that the processing charges for personal loans vary from bank to bank, and an individual Applying For a Personal Loan can have the cost deducted from the actual loan amount during the disbursement.
For the two leading banks, the loan processing charges or the non-refundable origination charges for ICICI Bank are up to 2.5% of the loan amount plus the applicable taxes. Meanwhile, for HDFC Bank, the processing fee is about 0.5 to 2.5% of the total loan amount, which is nearly the same amount.
When you Apply for a Personal Loan from a bank, the bank has to ensure that you can repay the loan in a timely and according to the conditions of the loan after the personal loan eligibility check. To ensure this and verify your identity and overall information, banks appoint a third party that verifies your credit history and checks your repayment history. Banks incur expenses for ascertaining the overall lead there is no separate verification charge, and it is part of the processing fees paid by the applicant.
When you secure a loan, the bank structures your repayment into monthly instalments based on the loan amount, duration, and interest rates. However, the key determinant for these instalments is your ability to repay. If you opt to pay off the loan faster but fail to meet these monthly payments, the bank will impose penalties for defaulting on your instalment payments. Selecting instalment amounts that align with your financial capacity is crucial to avoid such penalties.
For ICICI Bank. The penalties for late payment is 24% per annum, the repayment mode swap charges include ₹ 500/- per transaction plus applicable taxes, the loan cancellation charges are ₹ 3000+ taxes, and the EMI bounce charges are ₹ 500 and the applicable taxes. In addition, there is a non-maintenance of Mode of Payment or NNMP charges that sum up to ₹ 800/- and the applicable taxes or statutory levies.
Prepayment Charges
Most of the time, people think about what would happen if they had the funds to pay the loan early and could do it. If you have the funds to settle a Personal Loan early, you can repay or close the loan beforehand. However, banks typically discourage this practice since they lose out on anticipated interest income. Consequently, they impose a prepayment fee, typically ranging from 2% to 4% of the loan amount, which may vary depending on when you decide to clear the loan.
Goods and Services Tax (GST)
Banks extend various services to borrowers throughout the loan term, including loan processing and ongoing support. These services attract taxation, leading banks to levy goods and services tax (GST) on the customer based on the services used. HDFC Bank charges 18% GST on Personal Loans, and so does ICICI Bank.
Duplicate Statement Charges
If you require details regarding your payment schedule or lose track of repayment progress, the bank offers assistance by providing duplicate statements and other pertinent information. However, availing these services incurs a fee known as the duplicate statement fee. These statements not only aid in tracking outstanding loan amounts but also complement the paperwork associated with the loan. In addition, the Amortization Schedule charges for HDFC Bank Personal Loans are Rs.50/- per schedule of physical copy. However, customers can also download this from the website free of cost.
Believe it or not, Personal Loans are one of the best financial tools individuals can use to meet their expenses. However, getting a Personal Loan isn’t just about the interest charged on the loan amount there are a few other charges and personal loan fees that should be considered. Need financial advice concerning Personal Loan Charges, or have any queries about which financial institution is the best option for personal loans? You can always depend on Your Loan Advisors for financial assistance.
The economy has taken a turn with corporate culture and investment growth. Increasing turnovers and profits allow the management and staff to be compensated well, and the salary benchmark has increased. Fresh graduates from prestigious institutes are offered generous remunerations as a start.
Leading Banks and financers have designed a unique Personal Loan product to cater to this segment’s financial requirements, such as the Golden Edge Loan from HDFC Bank and the Elite personal loan from ICICI Bank.
Banks are eager to lend to high-income profile customers working for Top listed companies who have a secure future and provide lucrative business opportunities. These candidates can afford to pay higher EMI for enhanced loan amounts and are offered Personal Loans with the best terms.
Banks offer this premium product to customers with a monthly salary of ₹ 75k and above. The applicant’s employer must feature in the HDFC Bank Company Category List, and the customer must fulfil the essential eligibility criteria the Bank requires.
Credit usage with a regular payment record, which ensures an optimum credit score, is a primary eligibility criterion for Applying for a Golden Edge Personal Loan. A customer doesn’t need an account with the concerned Bank to apply for the Elite or Golden Edge Personal Loan.
With a Golden Edge Personal Loan from HDFC Bank, an applicant can get an unsecured loan of ₹10 to ₹ 40 lakhs without giving any security. The Bank transfers the amount one-time, which can be used at the customer’s discretion.
With the freedom to use the funds as desired, an applicant has the funds at hand for vacations, renovating and upgrading the residence premises, or purchasing the latest electrical gadgets.
The interest rate offered is the best in the industry for elite applicants for an extended tenure of 84 months. With an adjustable repayment tenure, the applicant can choose an EMI that is payable conveniently. An extended term is the answer if the customer uses other credit presently and can pay lower instalments.
The interest rate is applied to the monthly reduced balance of the principal loan amount, which compares to the interest rate of any secure loan or mortgage.
The applicant can repay the HDFC Golden Edge Personal Loan after paying 12 instalments without penalty or foreclosure charges. A part payment of 25% of the loan amount is also permitted twice in the tenure, free of charge.
The HDFC Golden Edge Personal Loan is processed within 72 hours therefore, it is the answer when funds are needed for a medical requirement or in an emergency. The numerous advantages of Golden Edge products make it the most attractive proposal for acquiring funds for personal needs.
Banks have created a seamless processing system for the high-income category of personal loans. A unique application form is filled out for the HDFC Golden Edge Personal Loan, and the request is processed with minimum documents. The application is processed on a priority basis
A dedicated relationship manager will visit the applicant to verify the applicant’s details and understand the loan requirements. The HDFC Golden Edge Personal Loan can also be processed and disbursed online at the customer’s convenience.
A customer with a high salary package can pay a higher ratio of the salary as an instalment. The Bank is, therefore, liable to sanction the loan amount applied for by the customer.
The Bank will go the extra mile to get business from high-salaried or Elite applicants as they provide high value and large volumes. Therefore, with the vast bouquet of advantages and facilities offered to an Elite customer, the HDFC Golden Edge Personal Loan is the best choice to fulfil personal needs.
The EMI or Equated Monthly Instalment is a fixed sum repaid on a predetermined date for a loan or mortgage. The Calculation of the EMI considers the sum borrowed, the term for repayment and the interest factored.
In previous years, lenders conducted all banking transactions via cheques or drafts.
A customer had to give advance cheques for each instalment for example, for a Home loan approved for 20 years, the customer submitted 240 post-dated cheques, which was extremely tedious and time-consuming. The introduction of CTS (cheque truncation system) by the RBI (Reserve Bank of India) provided much relief and considerably reduced the number of cheques required.
These methods are now redundant with the development of NACH (National Automated Clearing House), which allows the automated transfer of funds within Banks for recurring payments and ECS (Electronic Clearing services), which authorises electronic transactions of funds.
A customer has to sign the ECS or NACH Mandate form, which specifies the applicant’s bank details and permits the Lender to debit the account the Bank subsequently presents the EMI for clearing to the customer’s Bank account on a fixed date.
The Bank presents an EMI for Repayment of a loan, mortgage or consumer product on a fixed date every month. The primary reason for which an EMI Returns unpaid is due to insufficient funds in the customer’s account. The borrower should maintain enough balance in the salary account before the EMI Due date in case the salary is not credited in time to pay for the EMI. If insufficient funds are in the Bank account, the EMI will return unpaid, and the Bank records this transaction as a bounce.
There are other causes, too, such as incorrect customer details captured in the mandate or the customer shifting the account to another Bank. In that case, the customer’s prerogative is to inform the Bank or make the required changes in advance. The EMI, if returned unpaid, is recorded as a bounce.
Your Bank statement details portray your financial health and management skills. The bounce of an EMI shows in your Bank statement for times to come, which hurts your credit prospects. No Financer will issue a credit to an individual with a cheque return or an EMI Bounce in the past three months. Further, it is a good idea not to apply for a Loan or a Credit Card with a discrepancy in the Bank statement, as a CIBIL inquiry will negate your score. As a precaution, always keep an EMI amount in your account in advance to maintain an on-time repayment record.
The return of an EMI is undesirable, but if it does happen, there are consequences the immediate effect is an ECS bounce charge, applicable as per the policy of the Bank. Listed below are the ECS return charges of Leading Banks.
Charges Per Return.
HDFC BANK ₹ 350/- to ₹750/-
ICICI BANK ₹ 350/- to ₹750/-
AXIS BANK ₹ 500/-
SBI ₹ 295/-
The charges are applicable each time the EMI returns unpaid: A Bank may try to deduct the EMI multiple times or as specified in the Loan agreement. Though there are instances when customers have had to pay inflated charges due to the Financers attempting the EMI many times, the rule states that if the EMI does not clear on the first or second attempt, the Financer will have to take permission from the customer to represent. The customer may deactivate the ECS or NACH mandate as a last resort.
In addition, the Financer levies a Penalty interest of 2 to 3 % on the overdue amount for the number of days the EMI remains unpaid.
If the Emi remains unpaid for 90 days, the Lender classifies the loan as a non-performing asset.
Hail or storm, the Financer presents the EMI through the ECS mandate on the designated date: respect the date and ensure sufficient funds are in the account for payment. Once done, the Bank cannot reverse the transaction even if there has been an oversight and the customer pays the instalment on the same day.
It’s not a good idea to take the payment of your EMI lightly, as the delayed payment will figure constantly in the CIBIL record. The answer is to make the payment immediately as the Bank reports the delayed Emi payment to the CIBIL.
The CIBIL account reflects the existing status of all credit taken and the payment tracks. A random EMI bounce can occur due to unavoidable circumstances, but a continuous delay or non-payment downgrades the CIBIL Score.
The Lender will send reminders and try to reach the customer to get the payments. If the applicant fails to pay the instalment within 90 days of the due date, the next step is to report the account as a write-off to the Credit rating agencies. With a loan written off or excess bounces of EMI showing in the CIBIL, the score will sink, making it difficult for the applicant to get additional credit when required.
The Bank will refer the case to recovery agents who will further contact the customer to recover the loan paying back the complete loan amount with interest will serve well, as a settled loan remark will permanently mar the CIBIL history of the client.
A Personal Loan and a Credit Card are unsecured credit; therefore, delays in payment of the EMI will affect the Credit score. With a mortgage or a secure loan, the Financer has a guarantee and can recover the amount if the client cannot pay. Therefore, the credit ratings show a little flexibility and a delayed EMI or two does not impact the credit score if the customer pays future EMI on time. However, excess EMI returns cannot be overridden even if the applicant is employed with a Top A or B Category Company.
Sometimes, an oversight can cost a lot for example, Rohit Kumar changed his job but should have paid more attention to transferring his EMI mandate to his changed bank account. When he remembered to transfer funds, his EMI had already bounced; this happened a few times in a row. Though he transferred funds and paid the amount due, noting the delay, the Bank sanctioned him a higher interest rate the next time he Applied for a Personal Loan.
Credit is readily available for individuals who manage their finances well, and Lenders look to fund customers with a good repayment record. Before taking credit, calculate your outgoings and take as much credit as you can afford to repay use our EMI Calculator to check your instalment amount.
Being vigilant about the EMI and consuming as much credit as one can manage is the answer to a timely repayment record.
Life can be unpredictable; unexpected expenses can throw off even the most careful budgeting. Sudden expenses can leave you needing extra cash, whether it’s a surprise medical bill, a home repair, or education costs. And if you are already paying off a loan, the hefty EMIs can strain your finances. In both situations, finding ways to reduce the burden of your current EMI becomes a top priority. Whether you already have a loan or are considering taking one out, finding ways to lower your EMI can bring much-needed relief and financial flexibility.
This guide will explore effective tactics and alternatives to Reduce Your Bank Loan EMI, whether you’re repaying a loan or considering a new one. Implementing these tactics can improve financial management. Techniques to Reduce EMI:
Let us start by looking at Ravi’s case. Having taken a Personal Loan from Axis Bank, he now feels burdened by the EMI payments. Thus, he seeks to reduce the EMI amount and explores the following methods to achieve this goal.
If you have an existing Personal Loan and are struggling with the EMIs, you may want to consider the option of part prepayment. Many lenders offer this facility once a certain number of EMIs, usually 12, have been paid. Prepayment involves paying a substantial sum from the outstanding principal amount. For instance, leading banks such as HDFC Bank allow borrowers to prepay up to 25% of the loan amount in a calendar year.
By doing so, the outstanding principal amount gets reduced, along with the accrued interest, resulting in lower EMIs. You can use funds from your annual bonuses or variable pay to significantly dent your loan balances. Opting for part prepayment lowers your EMIs and reduces the loan tenure, helping you become debt-free faster. This is a strategic approach to managing your loan and lightening your financial burden.
Opting for a Balance Transfer of your loan entails transferring the outstanding amount of your current Personal Loan from one bank to another. The primary motive for this transition is to take advantage of a lower interest rate offered by the new Bank on the remaining loan amount. By leveraging this facility, you can reduce your debt burden and save on interest payments. HDFC Bank offers to take the principal balance of multiple loans under a single umbrella the customer can pay a single EMI at a reduced interest rate.
Take into consideration the variance in interest rates and any extra fees linked to the transfer to confirm that this alternative aligns with your financial aims and objectives.
If you are already repaying a personal loan and have been diligent with your EMIs, you may qualify for a beneficial option a Top-Up Loan. This is one of the best ways to reduce your loan EMI. This additional loan allows you to access more funds while potentially benefiting from lower interest rates. Furthermore, opting for a Top-Up Loan may also offer the advantage of extended repayment tenure. This extension could lead to lower EMIs, sometimes providing increased financial flexibility.
Now, let’s consider the situation of Ramesh, who requires a Personal Loan, but his priority is low EMI. Consequently, he approached his bank to discuss this requirement. The bank presented him with several options to consider. Here are a few of them:
If you are hassled with numerous EMI and credit card bills but require additional funds, applying for a mortgage is a good option. With a Loan Against Property or a Home Loan, the interest rate applied is the most reasonable and large loan amounts can be appended to settle other dues. If you already have a mortgage, apply for a top-up to repay minor loans.
The interest rate for a secure loan is lower than unsecured credit, and the EMI can easily fit the budget with an extended tenure of 240 months. Pre-closure and partial payment are allowed without any restrictions and charges. The downside is that the interest is charged at an annual rate, so the total costs of a mortgage over the years are more than an unsecured Personal Loan.
Opting for a longer repayment tenure for a loan can significantly impact your monthly instalments. With a longer loan term, the total amount due is spread out over a more extended period, resulting in lower monthly payments. You can analyse and understand this by using an Online Loan EMI Calculator. This facility can benefit borrowers who require more flexibility in their budget.
An EMI is a mandatory part of the monthly budget, and enough funds should be maintained in the account to clear the same. Delayed payment of the EMI is not an option it will lead to further debt issues and downgrade your CIBIL Score.
Getting credit is easy, but do not overextend yourself the repayment is a responsibility and should not strain finances.
If you need further advice, Contact www.yourloanadvisors.com to help you confidently work towards your financial goals.
Getting a Personal Loan has become a prerequisite to fulfilling an individual financial need Banks and NBFCs offer attractive terms to gain customers that best meet their eligibility criteria.
Gone are the days when getting funds was a long and drawn-out affair Digitalisation has hastened processes, and financers now have the experience and devised methods to eliminate unnecessary delays.
To get funds in time, there is much that an applicant can ensure before applying. A well-planned and researched application with a know-how of the Bank’s criteria will help make the journey successful.
An applicant should be aware before Applying for a Personal Loan if the lenders’ terms are suitable. Below is a checklist that an applicant can take note of to receive funds as desired via a Personal Loan.
The primary check is to confirm if your employer features in the Approved list of companies for sourcing a Personal loan.
Your Personal Loan Application is prioritised according to the category of the employer in the Company Category List of the Bank. Individuals working with top companies have a stable income to honour their timely repayment of all credit. They can quickly get approval with an enhanced loan amount and suitable terms.
Your company could be listed in Category A of one lender, whereas another Bank may classify your employer as Category C. However, if the employer is not listed, the response to the application may not be favourable.
Some lenders, like the ICICI Bank, also provide loans to employees of Non-Listed Companies. Checking if your company is included in the company category list is necessary to ensure that the Bank processes your loan application.
The CIBIL (Credit Bureau of India Ltd) assimilates all credit transactions reported by Banks and Financial institutions and issues a rating per the credit behaviour of an individual. Funds granted as Personal loans are without any security; financiers refer to the CIBIL to give loans to customers who manage their credit well and repay their EMI on time.
A score of 720 points and above is the benchmark most Banks require to issue a Personal Loan. Check your CIBIL Score before submitting your Application for a Personal Loan to know your status. An oversight on repayment or an error in your CIBIL report can also lead to a downgrading of your score.
If your score is below the required benchmark or there are aberrations in the history, the lender will be apprehensive about granting your loan request. Further, every time you apply and an enquiry is sent to CIBIL, your score gets deducted by 10 to 15 points, leading to further damage.
If you are a first-time borrower and do not have a CIBIL rating, apply for a Personal loan from a lender that processes requests from applicants with no credit history, such as HDFC Bank and ICICI Bank.
You can apply for the loan amount required, but the bank will issue the amount you are eligible for per the bank’s criteria. Each lender has their own standards, though they broadly remain similar for most lenders.
High-income applicants and individuals working in the Category A or B listed companies of the banks are given loan amounts applied for if their credit score is healthy. In contrast, if you work for a non-listed company and do not have a CIBIL history, banks may be apprehensive about giving you the loan amount you need.
Apply to a Bank with which you have a previous relationship, such as a salary account, or start by initiating a credit score by applying for a lesser amount.
If you need funds and are looking to Apply for a Personal Loan, evaluate your finances before applying. What is the monthly income you receive that is tabulated and credited to your account versus the EMI you pay?
The Banks calculate Eligibility for a Personal Loan considering that the applicant should easily afford the monthly living expenses after paying the EMI and credit dues. The total of the current EMI and 5% of credit card dues should not exceed the income ratio reserved for mandatory expenses.
If the EMI running over the income before applying for a further amount, you can do the following to enhance your eligibility and create room to pay an extra EMI:
Take action before applying for the loan otherwise, the request can be denied because the applicant is declared as overleveraged.
A Personal Loan, being unsecured in nature, is processed based on designated documents. The documents you submit to process your personal loan request represent your professional and personal profile.
Three months’ Bank statement of your salary account that depicts your financial health. Your Bank statement must reflect the following;
The salary slips for the last three months must reflect:
KYC Documents Include:
Your PAN card, Aadhaar card or an alternate approved identification and address proof. These documents are mandatory and must be readily available when submitting an application.
Points to note when submitting documents are:
Additional Documents required per the policy of the individual Bank include:
A one time submission of documents that have verified and self-attested by the applicant are the manta to receiving funds on time.
Consider the features of various Banks, which is the Bank offering you the most suitable terms.
Applying to numerous lenders simultaneously is not a favourable option as, besides hurting your CIBIL, it will make lenders wary about your intentions to take a loan from multiple Banks, which might not be easy to repay.
The foremost criterion for most customers when Applying for a Personal Loan is the lowest Interest rate. Though the cost of the loan is a priority, other features that can influence your choice of lender are as follows:
Gaining knowledge beforehand and gathering information to make an informed decision is always beneficial calculate your EMI using our EMI Calculator to check which tenure suits you financially.
If you reside in the Delhi and NCR region, NOIDA, or Gurugram, contact us at www.yourloanadvisors.com to book a personalised visit from our advisor to help you apply to the lender with the desired terms.
Deciding to review the terms available may consume time and effort, but doing this exercise before Applying for a Personal Loan makes the journey satisfactory!
Let’s face it: life is unpredictable, and unexpected financial emergencies can catch anyone off guard. Whether it’s about a medical emergency, sudden job loss, or urgent car repair, having quick funds can make all the difference. Want urgent funds when dealing with a financial crisis but don’t know where to start? Well, getting a Personal Loan can be a great place to start. It can be an invaluable tool to bridge the gap and prove a lifeline in times of financial crisis. Are they scrambling with a financial crisis? Here are some ways to deal with it and build resilience for the future!
The initial step of managing a financial crisis is assessing your financial situation. To begin with, you need to create a detailed budget to understand your income, outline the field expenses and identify discretionary spending. Besides, consult a professional or take some time to differentiate between essential and non-essential expenses so you can cut back temporarily, prioritise bills and focus on necessities like utilities, housing, groceries, etc. Getting a clear idea of your essential expenses can help you make informed decisions about where to allocate limited resources without any potential pitfalls.
Ideally, everyone should have an emergency fund to cover three to six months of living expenses. However, many people find it challenging to save consistently. If you haven’t established an emergency fund, start setting aside a portion of your income as soon as possible. In times of crisis, having savings can provide a financial buffer, and if you don’t have an emergency fund, focus on saving a small amount regularly until you reach a comfortable cushion. In addition, consider automating savings to make the process more disciplined and less prone to ignorance.
When going through a financial crisis, don’t rely on a single source of income. Instead, explore additional income streams and look for part-time or temporary employment opportunities, freelance work, or gig economy jobs that align with your skills and schedule. You can also use online platforms to market your skills or services. Besides, consider selling unused items or exploring the sharing economy for potential income. Generating extra income doesn’t just strengthen your finances it also provides a sense of empowerment and control over your situation.
For one, if we go by definition, a Personal Loan is an unsecured loan offered by financial institutions, such as NBFCs and banks. They differ from conventional, secured loans because secure loans require collateral, whereas Personal Loans are granted based on your creditworthiness and paying ability. You can apply for an Instant Loan Online, and they are suitable for a wide range of financial needs, including emergency medical expenses, consolidating high-interest debts, urgent home repairs, etc.
Let’s consider a situation. An individual gets a monthly salary or income from a business and saves it anytime. Typically, a person uses the monthly payment to meet their daily expenses, such as food, conveyance, or other usual expenses like household chores, utility bills, tuition, etc. Any savings or surplus is saved for a specified objective, and the money someone saves for the long term is goal-based.
Whether discussing retirement, building a home, buying a car, or starting a business, savings aren’t meant to be spent on a rainy day. However, most people use their saved money for emergencies, which sets them years back regarding their financial objectives. Instead, they can always Apply for an Instant Personal Loan and get the same amount for a minimal interest rate. They can use it for emergencies and other short- and long-term goals.
Financial crises can be emotionally draining, and they don’t come knocking at your door. There’s no denying that Instant Personal Loans provide a flexible and accessible way to tide over financial hurdles. However, you can always stay prepared to avoid any unexpected crisis. Need more information or want to find the best lenders who can help you with the loan at reasonable interest rates? Feel free to contact the professionals at Your Loan Advisor today!
Why does my CIBIL Score remain constant? I am paying my Credit Card Bill duly and have never taken excess credit I have repaid my loans successfully, yet whenever I check, my score hovers around the 720 points mark. How can I increase my CIBIL Score?
This is a familiar scenario for many who feel they are doing everything right yet not being rewarded, with their rating showing an upward trend.
To understand the CIBIL Score trend, we first need to examine how the CIBIL Score is calculated, what algorithms are used and how they affect your current rating. Let us study the significant inputs:
The Previous Credit History: Your record from the first time you got a Credit Card or applied for a consumer loan will reflect in your data. The repayment track of all the Personal Loans or Home Loan EMI paid, timely or with delays, is all mentioned in the history.
Your payment history forms the basis of your CIBIL Score points contributing towards a successful history include an extended length of credit track, the number of credit lines you have used, and an on-time payment record.
All the credit used should be repaid and closed successfully any credit cards or personal loans settled will be reflected in your CIBIL and bring down your score.
Credit Type and Duration: Type of credit means secure loans like home loans, Auto loans, Loans Against Property and consumer loans, where funds have been given against a mortgage and unsecured loans such as credit cards and Personal Loans, which are collateral-free.
A good mix of credit is one in which the individual uses a judicious mix of secure and unsecured credit.
A credit card with a good vintage, which is in regular usage or a personal loan that has been repaid over the allotted tenure is proof of the customer’s responsibility towards repayment of credit taken and builds lender confidence; a home loan with a longer repayment tenure indicates the capacity of the borrower to sustain long-term payments and consolidate assets. The type of credit used and duration comprise 25% of your credit score.
Credit Exposure: What is the quantum of credit which you have availed? Has the ratio of credit used increased with the increase in income over time? Your credit exposure is evaluated according to the percentage of credit you use compared to your income. This section contributes to another 25% of your credit rating.
Ideally, you can allot 50% of your income towards credit repayment per the eligibility criteria and the balance for lifestyle expenses or building assets. Banks allow this ratio to increase as your income increases depending on the EMI Calculation.
For example, suppose you have used credit conservatively with a home loan and a credit card, which is used rarely. In that case, you will have a mediocre CIBIL rating, which can also limit the chances of getting enhanced loan amounts if required in an emergency. Lenders need proof and be assured that you can meet the challenges of handling your credit and making timely payments.
You can uplift your score by working on your current credit exposure: activate any dormant Credit Cards by using them for regular spending, like filling fuel in your vehicle, eating in restaurants, spending on travel expenses by paying hotel bills and air or rail tickets and paying your bills as per the payment cycle due date.
Go in for a consumer loan rather than paying cash when purchasing household items; many stores offer further discounts on credit or debit card payments. Ask for an increase in your credit card’s spending limit. Using unsecured credit like a Personal Loan will help increase your CIBIL rating quickly.
Your credit exposure over time and current usage influence 25% of your score calculation.
Besides the more significant inputs considered, other influencing factors include the following:
CIBIL Errors: The Credit Bureau of India Ltd (CIBIL) is a non-government credit rating agency aggregating consumer borrowing and payment information. The Reserve Bank of India has authorised it to collect data from financial agencies, grade the same, and allot ratings based on borrowings and repayment information.
Consumer data is tabulated according to personal details, including name, PAN numbers, mobile numbers, employment details, residence address, and bank account details: a unique control number is further allotted to the customer. Although the information is verified, and the chances of an error are minimal, they could happen.
It is our first-hand experience that CIBIL mistakes happen, and when a customer is informed about being denied a Personal Loan request due to an aberration in the CIBIL, it comes as a surprise.
On closer investigation of the CIBIL record, it is found that a wrong entry has been recorded. There are chances of a wrong admission on behalf of the financer, and if the applicant’s details are wrongly entered, the CIBIL can update the incorrect information.
A CIBIL entry showing credit not used by the customer or a mistake in the repayment track can be rectified by raising a dispute with CIBIL as follows:
Ask for your CIBIL details and study the data entered. Are there any omissions or errors which are affecting your rating? Rectification of the same will help increase your score.
Pending Credit Lines: After the complete repayment of a loan or the closure of a credit card, it is advisable to procure a closure letter from the lender to substantiate the transaction. Any pending dues will be updated in the CIBIL an individual may be unaware of these dues, which, left unpaid, can multiply and downgrade the CIBIL Score.
Checking your CIBIL Score every six months will keep you updated on any transactions you might have missed and alert you to any dues. If there are any dues, clear the same and inform the lender to rectify the same. Settling any balance payments could boost your CIBIL to the required score if you need to Apply for an Instant Personal Loan.
In conclusion, Leading Banks like HDFC Bank and ICICI Bank require a minimum of 730 points as a CIBIL Score to issue further credit. If your score is lagging, take note of the pointers listed above to help you decipher the reason and take action as recommended.
With extensive credit usage as a norm, consumers know the importance of maintaining healthy credit and make it a point to keep their scores on track. Regularly checking, maintaining active use and timely repayment are ways to achieve an optimal score.
In today’s economy, a cash crunch has become a common dilemma for salaried individuals with a limited income. There are times when you find your earnings insufficient to meet urgent requirements and during these times, securing a Personal Loan can be an excellent way to handle your financial situation and save the day. Personal loans are known for their agility and versatility, as borrowers can use them for various purposes, such as home renovation, medical emergencies, a wedding in the family, or even their child’s education.
However, is Securing a Personal Loan Easy? The Good News is: YES, IT IS!
Besides, there are numerous advantages of personal loans. They are better than conventional borrowing options because of their fixed interest fees and long repayment tenure, and people love how quickly they are approved. Want to apply for an Instant Personal Loan but don’t know where to begin? Well, here’s a simplified guide to help you get started!
When most people apply for personal loans online, they do so without thinking about their eligibility. Typically, lenders consider factors such as income, age, credit score, and the borrower’s employment status. So, depending on where you are borrowing, check the eligibility criteria for your concerned bank and compare different financial institutions to ensure you meet the requirements of that bank and are Eligible for Personal Loan.
Once you have established your eligibility for the loan, the next step is to decide the loan amount and tenure. Based on your financial needs and how much the bank can lend you, realistically choose an amount that covers your expenses without burdening your repayment capacity. In addition, consider the loan tenure carefully because shorter tenures mean higher EMIs but lower overall interest payments. Longer tenures mean lower EMIs but higher interest costs.
You must clearly understand your eligibility and preferred loan terms and compare different lenders and interest rates. A thoughtful comparative analysis can help you get a sneak peek into the different interest rates and terms, significantly influencing the loan’s overall cost. If this step seems too complicated for you, you can always contact the professionals for loan financial insights.
After you find the lender or the financial institution offering you a loan, you must prepare all the necessary documents for the personal loan application. Typical documents include address proof, identity proof, income proof, and employment details. Before you submit the applications with the attached documents, ensure that all records are up-to-date, accurate, and filed promptly without any setbacks.
Gone are the days when you had to visit five branches of five different banks to secure a loan. The digital era has ushered in, and many lenders in India are offering the convenience of instant personal loans online. You can go to their website, complete the application process, and provide accurate information. Then, your application will be cross-verified along with your documents and creditworthiness, and you can get your loan with a relatively shorter processing time.
While a considerable portion of our population meets their financial commitments using their earnings, sometimes income isn’t enough to accommodate extraordinary expenses. That’s when low-interest personal loans come to the rescue. You can avail of a personal loan from different. Banks, and if you are still confused about the benefits, process, or source, don’t hesitate to contact Yourloanadvisors. The professionals have in-depth experience steering people toward making the right loan decisions, and personal loans are no exception!