Advantages of personal loans to raise funds

01 Nov 2019

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There are times in everyone’s life when there is a sudden need for money. The immediate choice is generally to use a credit card or to borrow money from friends or family members.

With net-banking now in place and more lenders chasing fewer borrowers, raising money through other sources is now possible at a faster pace.

Gold loans are normally a preferred and cheaper source of the loan, where banks and gold loan companies process the papers fast to give the borrowers the money he or she needs. However, personal loan are now being offered at a faster speed too. There are lenders who advertise that they will disburse the loan within a day. 

Under such circumstances, it is always better to go in for a personal loan rather than using your credit card to meet any emergency need. Firstly, because the personal loan is far cheaper than any credit card loan and secondly because the personal loan can be of a bigger size than what the credit card can offer.

But before one takes a personal loan it is important to have a good CIBIL score. With a CIBIL score of over 750, a person can be choosey in picking up the personal loan with the lowest interest rates. A person with a lower score may still get a personal loan but the interest rates may be higher.

The biggest advantage of a personal loan from the point of view of the borrower is that it is an unsecured loan. The borrower need not pledge or mortgage any of his assets to raise funds.

For an entrepreneur, a personal loan can act as a stop-gap arrangement till he is able to raise money from other sources to meet his urgent business requirements.

Like any loans, personal loans need to be repaid periodically in equated monthly installments (EMI). These loans can run from a short tenure of one year to a four-years loan. These days there are lenders who offer personal loans for a period of seven years also.

While taking a personal loan is easy, it should be taken only in case of emergency. Personal loans, being unsecured are costly. It would be foolish to buy an asset with a personal loan, especially when there are financial products available these days to buy a mobile or any other household equipment.

One should avoid using personal loans to repay loans that are cheaper in cost. But they can be used to repay higher cost loans like credit card bills or something similar.

If one is using personal loan to meet the operating expenses of the house then he or she is falling in a debt trap. One loan will lead to another and before the person understands it, he would have fallen in a debt trap. Rather than using the personal loan as a saviour to come out of the debt trap the person would have fallen in it using personal loans. Personal loans should be used only for intermittent emergencies.

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Comments

  • Nayontikadar
    20 November, 2021

    7

  • Bhanu
    19 November, 2021

    500

  • Bhanu
    19 November, 2021

    500

  • Prakash Chandra
    09 November, 2021

    Sir mujhe 150000ka lone chayeye

  • VORSU NAGAMANI
    07 November, 2021

    500

  • Kishor Gurjar
    05 November, 2021

    Mai indian army person hu muje loan requirement hai

  • Shailesh Bhai c Patel
    03 November, 2021

    Personal loan

  • Pramod
    02 November, 2021

    1000000

  • Rajesh mali
    31 October, 2021

    100

  • Satyendra kumar
    25 October, 2021

    Bank of baroda

  • YASHPAL SINGH Yadav
    02 October, 2021

    Required personal loan on salary account salary 22000 per month loam required 5 lakh

  • Sanjeet kumar
    01 October, 2021

    Prasonal lone 40000 Rs

  • Vasant verma
    24 September, 2021

    I need a business loan

  • Ranjitsingh
    22 September, 2021

    Sir mughe 50000 ka porsnal loan lena hai

  • Ranjitsingh
    22 September, 2021

    I need 50000

  • Jitendra singh
    20 September, 2021

    Sir I required personal loan but not offer generated in my account

  • Anwar Shahabuddin
    19 September, 2021

    Dear Sir/Madam, I want 2Lakhs rupees personal loan in your bank,so I am 14000/- Salary person but our salary is not created in Bob.Thank you

  • Ahmed yousry
    18 September, 2021

    I need 40000

  • Balwant
    18 September, 2021

    I want to loan 70000

  • Suresh Meena
    18 September, 2021

    20000

  • Suresh Meena
    18 September, 2021

    30000

  • SatyaRam
    18 September, 2021

    60000/loan chahiye

  • Suresh Meena
    18 September, 2021

    30000

  • Ashimkrdey
    17 September, 2021

    Yes

  • HAFIZ AHAMMED
    16 September, 2021

    Please send Details loan

  • Sadashib pal
    16 September, 2021

    Hi

  • Madhavi Redkar
    16 September, 2021

    200000

  • Biju V K
    16 September, 2021

    Need 350000 as personal loan

  • Pankaj Kumar tiwari
    15 September, 2021

    50000

  • Chirag ali
    13 September, 2021

    Sar Mujhe 50000 ka personal loan chahie

  • Shyam Rama Bhilavekar
    13 September, 2021

    500

  • Mayur Rathod
    12 September, 2021

    Rathod

  • RajeshBBhoi
    11 September, 2021

    RajeshBBhoi mujhe prasnal loan chaiye to plzz mujhe loan do

  • Ajay singh meena
    09 September, 2021

    Sir mujhe prasnal loan chaiye to plzz mujhe loan do

7 Step-guide to applying for a Home Loan

All of us dream of becoming homeowners. It is a way of ensuring lifelong financial security; the kind that does not come from living in a rented home. But buying a home is a complicated process. Whether it is years of savings to be given as down payment, or finding the right locality to invest in; the process of buying a home is elaborate. And since property investments take a huge chunk of savings, most of us rely on home loans. Yes, you can take out a home loan and pay it off in easy equated monthly instalments (EMIs) for tenures lasting up-to 30 years. Let’s understand the home loan procedure.
Step 1: Fill the application form
The process of taking a home loan begins with the borrower filling an application form. The application form is the most basic document in which you have to provide personal information about yourself like your name, address, phone number occupation, monthly and annual income and education details. You must also provide details about the property you wish to purchase, the estimated cost of that property and the down payment you can afford. Note that you have to furnish your ID proof, address proof, income certificates, ITR of the last three years, bank statements etc., with your application form.
Step 2: Verification of documents
After you submit your documents, the bank verifies the documents provided by you. This is an important aspect of the home loan process and banks may take up to 2 days to verify your documents. During this time, you may also be asked to visit the bank and appear for a face-to-face interview. This is the banks way of confirming that you are capable of repaying your loan within the stipulated tenure.
Step 3: Background check
Apart from verifying your documents, the bank also conducts an independent background check of the borrower’s credentials. To this effect, the bank may conduct an investigation basis the information supplied by you in the application form including your previous and current residential addresses, your place of employment, credentials of your employer, office contact details etc.
Step 4: Processing free payment
After the bank is convinced about your repayment capacity, it begins the housing loan process. As such, you must pay a processing fee which is an amount the bank collects to process your loan application. Banks typically charge anywhere between 0.25% and 0.50% of the principal loan amount +applicable GST as processing fees. The bank charges a processing fee because of the investigations conducted to check your eligibility and your Proposed Property’s Valuation and Search. This does not necessarily mean that your loan is approved
Step 5: The loan approval process
By far, the most crucial stage in the entire home loan process; the bank now decides whether to approve or reject your loan. To ensure that your loan is not rejected you must furnish all the listed documents truthfully. This is also the stage in which the borrower can find out the maximum loan amount as approved by the bank, as well as the interest rate charged according to various tenures. The bank communicates these details by sending you an official sanction letter confirming that your loan is approved.
Step 6: Processing the property documents
After you receive the official sanction letter approving your loan, you are required to submit the original property documents to the lending bank, which remain in the bank’s custody until the loan is repaid in full. The original property documents typically include the complete chain of ownership acquisition and transfers of ownership in sequence till your Sale Agreement execution, applicable NOCs from related authorities along with the seller’s name, ID and address proof, etc. The bank verifies the property documents before approving the loan. Bank also sends it’s representative twice to physically visit the property site, once before approval of loan and then after sanction of loan.
Step 7: Loan disbursal
The final step in the entire housing loan procedure is the loan disbursal stage. This includes the registration of the loan deal i.e. acceptance of Terms and conditions of Sanction by the borrower/s, the signing of the loan agreement/documents and the disbursement of loan as per terms stated in the Sale Agreement, including down-payment by the lender.

Applying for an education loan – the procedure you need to follow

We have all heard the age old saying that the path to a great career and successful life is paved through a quality education. Holding a higher education degree opens up many career avenues and helps you secure your financial future. But with the ever-rising cost of college and university fees, students and parents have no choice but to take on an education loan to fund higher studies. Education loans cover a host of expenses related to higher education such as the tuition and examination fees, hostel fees (if applicable) cost of books and apparatus, conveyance charges and so on. Here’s the education loan procedure you need to follow.
Do your research and choose the lender
Before you begin with the loan application procedure, you need to get the admission offer letter from the school you wish to attend, finalise the lender and then visit them online or in person. Let’s say you choose bank of Baroda as your preferred lender.
Fill the loan application form
If you apply for the loan online, you can find the loan application form on the lender’s website. As per the instructions of the Department of Financial Services, Ministry of Finance, Government of India, all education loan applications (including applications received by Bank in physical format) are to be applied through Vidya Lakshmi portal, i.e. https://www.vidyalakshmi.co.in/Students
Appear for the interview round
The procedure to take education loan continues with the interview round. Whether you apply for the loan offline or online, the bank may call you to appear for a personal discussion. The student wishing to study further is considered as the principal loan applicant, which is why he/she must be present for this discussion. The bank generally asks student applicants some basic questions regarding their overall academic performance, the degree they wish to pursue and the school they wish to attend and so on. They also ask questions regarding the possible income that can be generated from their chosen field. Based on the information provided by the applicant, the bank decides whether or not to proceed with the loan.
Provide the documents
The bank also asks you to provide some documents as part of the Bank’s education loan procedure. You need to submit the admission offer letter provided by your chosen university. The bank will also do its due diligence and verify your enrolment.
The bank approves the loan
After verifying your credentials, your student loan may be approved. The student’s one of the parents/guardians are listed as co-borrower or guarantors and the bank also checks the guarantor’s /co-borrower’s credit scores before approving the loan. Additionally, the applicant must also sign a promissory note and other prescribed loan documents, assuring the bank that the loan will be repaid within the stipulated tenure.
Loan disbursal
The last step in the education loan procedure is loan disbursal. After all formalities are completed, the bank disburses the loan amount directly into the bank account of the university the student wishes to attend. Disbursement can be done partially (–semester wise) or fully, at one go.
Keywords used
education loan procedure, education bank loan procedure, procedure to take education loan

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