However, banks generally verify the credit rating and history of the loan application before sanctioning a loan. The interest rate for personal loans varies between banks. It depends on things like the borrower's credit rating, the amount of the loan, the duration of the loan, etc.
Overall, interest rates vary from 8.5% to 25% per annum. Whereas the duration of the loan varies from one year to five years, varying from one lender to another. The borrower shall pay back a personal loan in the form of an EMI.
Below are some of the major benefits of personal loans.
Hassle-free loan processing: You can apply for a personal loan online through the website or via NetBanking, at an ATM, or by visiting your nearest branch. The application process is fast, with minimal documentation.
To Finance a Major One-Off Purchase:
An unsecured personal loan may be an appropriate funding option for a major one-time purchase if:
- Your credit, income, and other underwriting factors qualify you for a Gold loan interest rate that is considerably below your most affordable regular credit card APR.
- You do not expect to be able to refund the purchase before the end of any promotional window 0% APR (windows are usually 21 months at most, compared to 60 months or more for a typical personal loan)
- The vendor doesn’t accept credit cards.
- Your combined credit limit is not high enough to cover the entire cost, and you don't want to request another card.
Common one-off time purchases where you could get a personal loan include.:
- Transportation. If you purchase a new or pre-owned car from a dealership, you are likely to get a lower rate and a smaller monthly payment with a secure vehicle lease, but an unsecured personal loan may be your best bet in a private party deal that conventional lenders won’t finance directly.
- You can use the proceeds of your loan to pay for a cash withdrawal or a bank cheque.
- No collateral required: Personal loans need no guarantee against loans. This feature of gold loans makes it even more favorite among people.
- Easy documentation: The paperwork and processing time required for a personal loan is substantially less than for most other loans. You can obtain a loan by providing proof of identity, proof of address, and proof of income. If you are pre-approved for a personal loan, you may not even be required to provide documentation.
- Pocket-friendly repayment: You can pay off your loan in easy installments or EMIs. Payment methods are generally flexible, and you can choose a period that allows you to optimize your monthly payment according to your needs. Bank provides tenures for 12 to 60 months with EMI as low as Rs 2,162 per lac. You can check your Loan EMI Calculator.
- Free to use the funds for any purpose: One of the biggest benefits of personal lending is that you can use your funds for whatever purpose you want – whether it's a wedding, vacation, gadget, business investment, home renovation, etc. A home loan or car loan must be used for your borrowing purposes.
- Longer Repayment Term Than Some Alternatives: While most personal loans have repayment terms of 2-5 years, some unsecured personal loan providers offer terms of 7 years or more. Popular alternatives, such as payday lending and pawnshops, have much shorter terms and much higher interest rates.
Gold loan Cons:
- High Margin required: Banks only provide you with a loan of up to 75% of the value of your gold. While the remaining 25% cannot fetch you a loan, that acts as a margin for banks in case of non-payment.
- Loss of your gold: If you do not repay the loan or interest in time, the Canara bank gold loan can liquidate your gold to collect their currency.
- Only for short tenures: The gold loans are generally not given for more than 3 years or preferably shorter tenures, which is a big drawback for loan seekers.
No comments:
Post a Comment