Personal loan details

 A personal loan is money lent to you without any limitations on the way of spending it. They don’t require any collateral such as fixed deposits or property as well. This can make personal loans attractive to take care of your financial emergencies. Although there are some details which require your attention.

Personal loan interest rates -

 This the money which you have to pay on top of the principal amount borrowed. This amount is generally more than other loans which have securities like mortgage and deposits. This is highly dependent on your credit score. These rates vary widely between 8-14% of the principal amount.

The amount of money approved by the bank to be borrowed has some limitations when it comes to personal loans. In India, it varies anywhere between Rs.25000 to 1 Cr. of course depending upon your credit score and earning capabilities.

Credit score - 

Personal loan interest rates are calculated based on your personal credit score. A low credit score can result in having to pay high-interest rates. A credit score minimum of 670 is required for a personal loan to be approved. A very good credit score close to 800 will give you good interest rates on your personal loan. You can go to the online EMI calculator to get an idea of interest rates depending on your credit score.

Repayment period - 

A repayment period of a loan is the time period in which you are given to pay back the borrowed amount with interest. For personal loans, this depends on the amount of money borrowed and credit score. A period of 1 to years is generally seen in India. 

Early Repayment can come with extra charges -

Unlike other loans, personal loan lenders might charge you extra fees if you want to repay the loan earlier than expected.

Rigid EMI schedule -

As mentioned above loan lenders are very strict with their sc the EMI is to be paid. You need to pay it back in a timely manner failing to do so will affect adversely your credit score.

The amount of money which can be borrowed comes with a lot of limitations although if you have a good credit score some banks do give personal loan up to Rs. 1 Cr.

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