Apply to The Bank That Will Service Your Needs Best

When faced with unforeseen expenditures or simply a shortage of funds, applying for a Personal Loan is the best option.

• If you are a first time loan seeker or even one who has taken a Personal Loan previously, you could lack clarity.

Questions such as which bank should one apply to? Which will give you the desired loan amount at the best rate possible?  And who will service our needs without any delays?

All banks look to fund customers with a steady profile & financial stability. This is to ensure that the loan gets repaid with the due interest, in the stipulated period of time.

Though the basic fundamentals of a Personal Loan remain the same, enumerated below are the key points which will help you decide the most suitable bank to apply for your Personal Loan.

I) Your Relationship with the Bank

• The Banking Institution with which there is a previous relationship could give you the best deal. This relationship could be in the form of a Salary Account, Savings Account, Credit Card or any other Loan.

• The relationship helps, as a previous record of timely payments will establish confidence in the applicant capability to meet with the payment deadlines

• The KYC status of the applicant may be already updated with the Bank which can hasten the Loan Process.

II) Financial Implications

• An applicant needs to be aware of the following costs incurred for processing & paying back the loan. Look for the Banks which gives you the best offer for the following:

• When applying for a Personal Loan It is prudent to survey the market, as all banks regularly offer schemes & discounts.

• RATE OF INTEREST: Rate of Interest for the Loan is a major factor to consider when applying for a Personal Loan. Check for discounts & offers applicable to your profile.

• PROCESSING FEES: Processing fees are a onetime charge levied for verification & disbursal of loan amount. The fee is not taken in advance & is normally deducted from the Loan amount.

• PRECLOSURE CHARGES: Pre closure charges are levied by the bank for repayment of the Personal Loan prior to the completion of the full tenure of the loan .If the requirement for the Loan amount is a short term one, it is better to borrow from an institution with which there are no pre closure charges & a flexible prepayment policy.

• TENURE: Repayment tenure for a Personal Loan is up to 60 months. The monthly installment to be paid to the bank is calculated on the basis of the rate of interest applicable & the tenure for which the loan amount is appended.

• Thus the Rate of Interest & tenure applicable determine the total pay back for the Loan amount taken.

III) Loan Amount Required

• Each bank/NBFC has a policy in place with regard to the loan amount that can be sanctioned to a Personal Loan applicant. When applying in the time of need we hope that the loan amount required gets fulfilled.

• There is no constant across the banks as to the loan amount that can be funded to an applicant. Basic deciding factor is the ability of the borrower to pay the monthly EMI after all his/her monthly expenditures.

• If larger loan amount is required then it is prudent to apply to the Bank which has:

• A flexible policy for calculation of loan amount

• Calculate & sanction the maximum loan amount as per your eligibility.

• Give an extended tenure for repayment of the loan

• Will also consider clubbing income from other sources such as other working members of the family and rental income for calculating the amount that can be sanctioned

IV) Cibil Policy

• Most banks & NBFC’S have a minimum CIBIL score requirement for processing of a Personal Loan. Every time the bank makes an enquiry with CIBIL, the score is reduced by 20 points! So always check your CIBIL score before putting forth your application to be sure your score is above the minimum benchmark required.

• If you are first time loan applicant, without a CIBIL Score, then choose to apply to a bank or a NBFC with whom having a CIBIL score is not mandatory.

V) Eligibility Criteria

• All major banks & NBFC’S have as per their policy a certain segment of customers to whom preference is given. Being a preferred customer with the Bank will enable you to get your loan sanctioned with the best terms & conditions available, whereas if your profile does not meet the policy criterion required by the Bank it will not further your application.

• Enumerated below are the key points considered by banks & NBFC’s which will determine Eligibility Criterion to process your Application

• Company currently employed with:

Banks & NBFC’s have a list of preferred companies & Personal Loans are provided majorly

For employees of companies that feature on their list. For easy funding, it would help to choose a bank with which your company is approved.

• Monthly Income:

The monthly net income credited to your bank account should be above the minimum net income criteria required as per the policy of the bank. Your application for a Personal Loan will only get accepted for processing if the net monthly income is documented in the salary slip & bank statement. Banks may have a lower minimum policy for salary account holders, and employees of preferred companies.

• Customer Profile:

Much emphasis is paid by each bank to the customer’s profile as Personal Loans are completely unsecured loans – without any collateral. All banks & financial institutions have done an individual research to narrow down on the customer segment that they find suitable for funding a Personal Loan. Major factors contributing to a profile check include:

• Marital Status:

If an applicant is married & living with her/his spouse or is residing with other family members, it is a favorable scenario for banks to fund loans. Some Banks will not fund Bachelors or applicants who are living alone.

• Educational Qualifications:

Graduation is the minimum basic degree required for most institutions for funding Personal Loans. Since higher education & professional degrees merit their due recognition, special rates & offers are given to well qualify applicants.

• Residence Location:

Check before applying to the bank for a Personal Loan – Only if your residence location is within their verification jurisdiction, then your application will be considered.

It is important to check all options available before applying for a Personal Loan as applying to a bank which does not process your loan as per your requirements can lead to an unsatisfactory experience.

We at Your Loan Advisors take pride in providing personalized services to guide our customers, achieve their Personal Loan requirements from the bank that will service their needs the best!

Advice From Your Loan Advisors

• It is prudent to compare the offers of available for a Personal Loan, but applying to many banks is counterproductive: Your CIBIL Score can get adversely affected. It also gives a negative impression to the decision makers of the bank undermines the confidence in the applicant.

• Calculate the total financial implications .The rate of interest is a major factor, the processing fees & other charges are equally important & can have a higher impact on your finances initially.

• Sign & self attest copies of all documents before submitting your application

• Read the loan agreement carefully before signing and make all payments by cheque in the name of the concerned bank