A few years ago, people were adamant about saving huge portions of their income but nowadays the scenario is a bit different. People do want to save but only to cover up for short-term emergencies and the best part of their income they want to dedicate towards fulfilling the demands they have today. Their risk appetite is quite large and they are ready to leverage things with an expectation of a higher return. What if you face an emergency for which you do not have sufficient money saved up or what if you have an amazing opportunity that comes only once in a lifetime?
These are the times when a person should think of getting personal loans and if you want funds without any restrictions and collateral-free, then you should definitely go for a personal loan. A personal loan is extended by banks or NBFCs (Non-Banking Financial Companies) to help the borrowers meet their personal needs without any questions asked.
Like any other loan, a personal loan also has a fixed tenure and an interest rate. Usually, it is considered that a personal loan has all sorts of flexibility in its terms and it is easily accessible but the personal loan interest rates are quite high. Now, that is debatable.
There are various critical factors that a bank or NBFC (Non- Banking Financial Companies) takes into account before deciding the rate for you.
Some of the factors are as follows:
Borrower’s Income
Credit or CIBI (Credit Information Bureau India Ltd.) Score.
Bank-Customer Relationship.
It also depends on the fact whether the personal loan interest rate the bank is considering can be a fixed rate or a floating rate. It is a misconception that people have. Personal loans can be less expensive when compared with other types of loans and credit cards. Unsecured loans do have a high rate but are not exorbitantly high. The key to having a low personal loan interest rate is to have a good credit score. The range of the credit score is from 300 to 900 and banks or NBFCs prefer a score of 750 and above. Sometimes the borrower gets stuck with a high rate because of his/her lack o information regarding the prevailing interest rates.
HDFC personal loan has an interest rate starting from 10.75% and even has the facility of applying online. It is of grave importance for you as a borrower to be aware and cautious while selecting a personal loan policy.
Read More:- ESSENTIALS OF A PERSONAL LOAN
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