5 Qs to ask before applying for a personal loan

Personal loans are best suited for many of the personal expenditures which are not covered under the special category loans like home loans, car loans, or educational loans. Personal expenditures include the purchase of electronic goods, purchase of furniture, renovation of the office or the house property, marriage purpose, medical expense purpose. The personal loans can be taken from any of the banks or an NBFC for 5 years tenure. The loans can be disbursed within 48 hours for the physical application and within 2 hours for the online application. Instant loans are being available wherein the immediate disbursement of the loans can be done after the verification of the loans documents and background verification check of an individual with the help of CIBIL score. Loans once taken can be used for any of the purposes by the borrower. There are no restrictions from the lender’s side related to the expenditure for the loans. The loans are also provided by some exclusive NBFC’s who deal exclusively in personal loans. Personal loans are best suited for individuals who want to spend their money on some larger expenses and do not have a sufficient amount of money.

The personal loans taken should be repaid on or before the due date to avoid the penalty being charged. The banks approve the loans leniently for the personal loans as the amount being borrowed by the borrower is small. But if the loan is being defaulted by the borrower then in that case the borrower can be blacklisted from the future credits and also entry can be made in the credit history for the default of the loans. Before the approval of the loans the bank thoroughly checks the credit history of the borrower and also checks the frequency of the payments of the credit payments history. The bank approves loans for the tenure of 5 years maximum for the repayment of the loans. The loans taken can be utilized for any purpose according to the wish of the borrower. Personal loans are necessary for the people who need financial emergency and also the ones who do not want to spend from their past savings can opt for personal loans. Personal loans can help an individual keep the money in a safe vault and utilize the funds raised from personal loans for satisfying the needs of an individual.

Queries about personal loans

Qs1: Can income tax benefits be taken on personal loans?

Ans: Availing Income tax returns is not possible in the case of personal loans as the income tax department does not provide any kind of tax relief to the borrowers as in case of the personal loans is not encouraged by the government and thus exemption cannot be provided.

Qs2: For what purpose personal loans can be extended?

Ans: Personal loans can be extended by the bank for medical expense purposes, travel purposes, home renovation purposes, furniture purchase, electronic goods purchase, marriage purpose, building maintenance purposes. Thus the usage of funds can be done for any purpose and the bank does not ask for proof of expenditure.

Qs3: What credit score is required for personal loans?

Ans: A minimum credit score of 750 is required for the CIBIL score. Bank thoroughly verifies the CIBIL score of an individual and accordingly approves the loans of the borrowers.

Qs4: What is the tenure for the personal loans? Is early repayment possible?

Ans: Personal loans can be taken for a maximum tenure of 5 years. The loans can certainly be paid early in case if the bank does not charge a penalty for the early repayment. Most of the banks provide a rebate on the personal loans’ early repayment.

Qs5: Who are the prospective customers for the personal loans?

Ans: Prospective customers for the personal loans include the salaried people who fall short of money for the recurring expense or major expenditure or the ones amongst the business class who are falling short of money can avail personal loans from the bank.

The personal loan queries have been answered in the above section. Personal loans can be taken for any of the purposes by the borrower. The bank does not ask for any proof related to the expenditure. Thus the personal loans are very much beneficial for the borrower to satisfy any of the personal needs.