The Short Answer Is: It Depends Here’s What You Should Consider Before Trying This Strategy
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Sometimes, it’s easy to feel like you’ll never pay off your entire student loan debt balance. In fact, respondents to a One Wisconsin Institute survey said on average, it took them 21 years to pay off their student loan debt. So it can be pretty tempting to look for creative ways to pay down your debt a little quicker.
Personal loans can generally be used on any large expense , but for many people, they are an instrumental way to consolidate debt or pay down high-interest debt a little faster.
On average, personal loans have a lower interest rate compared to credit cards according to the Federal Reserve, the current average APR for a two-year personal loan is 9.58% while the average APR for a credit card is 16.30%.
Of course, the interest rate on a personal loan will depend on your . And, generally, the higher your credit score, the more likely you are to receive a lower interest rate among other more favorable terms for a personal loan. Some lenders, like LightStream, actually offer interest rates as low as 2.49%. And peer-to-peer lenders like LendingClub can also offer lower-than-average interest rates .
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How To Get An Instant Personal Loan
How To Choose The Best Personal Loan Lender For You
It’s always best to get quotes from a few lenders before applying for a personal loan. When comparing lenders, keep an eye on the following factors.
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Understand What You Can Afford
It’s also important to figure out how much you want to borrow before submitting applications. You can often pay off a personal loan early without paying any prepayment penalties however, many lenders charge an origination feeoften, a percentage of the loan amountwhich means borrowing more money than you need will lead to unnecessarily high fees.
Your monthly payment will depend on your loan amount, interest rate and repayment period . A loan calculator can help show you how changing these factors can impact your monthly payment. Compare several options and review your budget to see how much you can afford to borrow. You might get a more affordable monthly payment with a loan that has a longer term, but you’d likely end up paying more in interest.
Personal Loan Features And Benefits
Axis Bank Personal Loan Features
One needs to be of a minimum age of 21 years and should have a valid set of documents like ID, income and residence proof, among other documents, to avail a Personal Loan from Axis Bank.
To ease the burden of paying off the Personal Loan immediately, you may opt for the EMI facility. The repayment tenure can range from anywhere between 12 to 60 months. If youre an Axis Bank customer, you can avail the best rates for Personal Loans!
To know how much you need to pay per month, there is a Personal Loan calculator at your disposal. You can choose your tenure and the amount that you are comfortable repaying each month for the chosen tenure. With the Personal Loan EMI Calculator, you can also calculate the compound interest and know exactly how much you need to finally part with – including the interest.
Axis Bank Personal Loan Benefits
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Important Features Of Personal Loans
- No Collateral/Security Required: You dont need to provide any collateral or security such as a house or car to avail a personal loan. The loan is approved only on the basis of your creditworthiness, which depends on your credit score, income, repayment history, employer reputation, etc.
- Flexibility of Usage: Unlike a car loan or home loan, personal loans can be used for varied purposes such as to meet expenses of a medical emergency, travel, house renovation, debt consolidation, etc.
- Flexible Tenure: Personal Loans come with flexible tenure usually ranging from 12 months to 60 months.
- Minimal Documentation: You can apply for a personal loan online or offline with minimal documentation. Key documents that lenders generally need the applicant to provide include proof of identity, proof of address and proof of income.
- Quick Disbursal: Personal loan disbursal can happen in as short as a few hours, once the application is approved. Turnaround time can also be as short as a few minutes if you are availing a pre-approved loan offer.
- Flexible Loan Amount: The eligible personal loan amount is based on an individuals repayment history, monthly income, age, profession, employer reputation and other such factors. Lenders offer personal loans ranging from as low as Rs. 10,000 to as high as Rs. 50 Lakh.
You Need To Pay For A Large Purchase Project Or Event
If you need to make a major purchaselike replacing an aging furnace, deck, or roofthe interest rate on a personal loan might be better than the annual percentage rate on your or in-store financing options. If you take out a loan and pay the seller in cash, you may end up better off in the long run.
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What Is The Personal Loan Eligibility For Salaried Employees
A personal loan for salaried employees can be availed if you can meet some eligibility conditions. Have a look at the personal loan eligibility of Bajaj Finserv:
- You need to be a residing citizen of India
- You should be aged between 20 and 60 years
- You need to be employed with a private, public limited company, or an MNC
- You should have a minimum CIBIL score of 750
The Ascent’s Best Personal Loans For 2021
The Ascent team vetted the market to bring you a shortlist of the best personal loan providers. Whether you’re looking to pay off debt faster by slashing your interest rate or needing some extra money to tackle a big purchase, these best-in-class picks can help you reach your financial goals. on The Ascent’s top picks.
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How Does The Coronavirus Affect Personal Loans
The impact of COVID-19 has left millions of Americans without a reliable source of income, and many may be searching for personal loans to cover emergency expenses. In response to unprecedented market conditions, some banks have announced new loan offerings and lower interest rates, though many have also tightened their eligibility requirements.
For existing borrowers, some lenders have extended their loan relief programs into 2021, waiving fees or letting customers temporarily defer payments. Long-term unemployment will mean some borrowers continue to rely on these programs, says Greg McBride, Bankrates chief financial analyst. He encourages those who are having trouble making payments on their personal loans to contact their lenders rather than ignoring the problem.
Beginners Guide To Take A Personal Loan
A personal loan in India has become one of the popular credit products in India. More often than not, people who are in urgent need of credit try to avail a personal loan due to its key feature of unrestricted usage of funds. Its loan proceeds can be used for varying purposes like home renovation, medical emergency, higher education for children, foreign vacation, a wedding expense, etc. Even according to a survey by NIRA, a consumer finance company, 77% working people in India relies on Personal loan.
Amongst the people who try for a personal loan, manys application gets rejected since banks tend to have their own set of eligibility criteria for Personal Loans, failing which the application does not get accepted. Hence, before applying for a personal loan, everyone should know the tips t increase his/ her chances to get a personal loan from top lenders like HDFC Bank Personal loan, which is probably the biggest private lender in India. This holds true especially for beginners, who should know about the process and requirements of taking a personal loan, given that they might struggle more to take a loan since they usually have low or no credit history.
Here are key things for beginners to factor in before applying for a personal loan:
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Check Out The Details
Now that you know you are prequalified, its time to prequalify the lender. Go through information and disclosures in your preapproval letter and revisit the website to look for the following:
- Expected Loan Amount, APR, Monthly Payment, and Loan Term. It may or may not be exact, but it will give you something with which to compare other preapproved loans.
- Fees and Penalties. Will this loan have an origination fee? If so, how much? What are the penalties or fees for late or missed payments? Are there any other charges?
- Type of Interest. Is the interest rate fixed or variable? Do I have a choice, and, if so, whats the difference in rates?
- Unsecured or Secured. Will this be an unsecured or secured loan? For a secured loan, what is required collateral?
- Automatic Withdrawal. Are automatic withdrawals of monthly payments mandatory or optional? If optional, will I get a lower interest rate if I agree to automatic withdrawals?
- Arbitration. In the event of a conflict, is arbitration mandatory, or can I take the lender to court?
- Prepayment Penalty. If I pay my loan off early, will I pay a penalty?
- Fine Print. Theres always fine print, even in preapproval letters. Look for anything not answered above or anything you hadnt thought of.
Average Personal Loan Interest Rates By Credit Rating
Average personal loan interest rates range from 10.3 percent to 12.5 percent for excellent credit scores of 720 to 850, 13.5 percent to 15.5 percent for “good” credit scores of 690 to 719, 17.8 percent to 19.9 percent for “average” credit scores of 630 to 689 and 28.5 percent to 32.0 percent for poor credit scores of 300 to 629.
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What Is The Personal Loan Application Process
You can apply for a personal loan online in just a few simple steps:
- Provide details regarding your income, employment and identity in the online application form on the Bajaj Finserv website
- Select the loan amount you wish to avail of and the tenor you prefer to get instant loan approval
- Submit your documents to our representative, who will get in touch with you
- Get the required loan amount transferred to your bank account within 24 hours.
How Does Personal Loan Work
Personal Loan is an unsecured loan in which funds are lent to you based on your financial status. We check your eligibility and offer the maximum loan based on the same. You can use a personal loan for any purpose and are expected to repay it as per the agreed terms. We strongly advise you to read and understand the loan agreement before signing it.
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Personal Loan
A personal loan is a collateral-free credit facility extended by Banks and NBFCs to salaried individuals. IndiaLends is the largest online personal loan provider in the country, having helped over a hundred and fifty thousand customers. Over 40 Banks and NBFCs have tied-up with IndiaLends to provide personal loans to varying customer profiles. Below, weve mentioned some of the key features of an easy personal loan you can get through IndiaLends.
Personal Loan Interest Rate
Interest rates can vary based on the customer profile. Loan rates start at about 10.75%. To increase your chances of getting a low- interest rate loan, an individual should have a good credit history. Ideally, a CIBIL score greater than 750 is considered a good score.
Personal Loan Tenure
The tenure period of a Personal Loan starts from 3 months and goes all the way up to 6 years. The choice of tenure is usually left up to the borrower. Depending on his need â short-term or long-term – borrower can ask for a tenure that suits his needs. The only thing to keep in mind is that the EMI should be an amount which you can pay back easily every month.
Documents Required For A Personal Loan
Personal Loan With Zero Pre-Payment Fee
What Is The Minimum Cibil Score To Get A Personal Loan
Although the required CIBIL score for personal loan is 750+, you can also get the loan approval when you have a lower credit score. You wont get the loan approval if the CIBIL score is under 599. However, if you have a score of 600-700, you may get the loan approval, but at a higher rate of interest. It may affect your budget and lead to an increased EMI amount.
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Make A Complaint About Your Personal Loan
If you have a complaint related to your personal loan, you should contact your lender.
All federally regulated financial institutions, such as banks and federal credit unions, must have a complaint-handling procedure in place.
If your lender is regulated by a provincial or territorial government, such as alternative lenders and payday lenders, contact the regulator in your province or territory.
What To Do After Closing A Personal Loan
When you decide to close a personal loan look at these crucial things:-
- Pre-closure charges : When you decide to close the personal loan account, check the pre-closure charges which the bank or NBFC levies. The prepayment charges range upto 5% of the outstanding balance. However, some banks offer Nil charges on prepayment under special schemes.
- Obtaining NOC : No Objection Certificate is proof that shows that you have cleared all the dues and there is no outstanding balance which you need to pay.
- Obtain all your original documents : When you avail of a loan, you submit your important documents, so make sure that you take all your documents while closing the account.
- Ensure updation of your CIBIL Score : Once the loan is repaid in full, the bank must update your loan repayment action in the CIBIL database. However, when banks take time to do so, you need to keep a check on your report, and if it is not done, you should ask your lender.
FAQs
How long does it take for personal loan approval?
Personal loan approval takes somewhere between 48 hours and 72 hours. However, if you have a pre-approved offer, you can get an instant personal loan within a few hours.
Which bank is best for personal loan?
What is the best way to get a quick personal loan approval?
What is the minimum income required to get a personal loan?
How does the personal loan work?
Which bank gives the cheapest personal loan?
What is the maximum amount of personal loan I can get?
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How To Get Personal Loan Statement
You can easily get in touch with your lender either through their online web portal or in person and request for your loan statement. On most lender websites, you can just log in using your online credentials and provide your loan account number. Once you have tracked your account, you can request for a statement which is either sent to your registered email ID or provided in the form of a PDF file which can be downloaded. Similarly, you can also visit the branch office of the lender from where you have availed the loan and place a request for a statement. In addition to that, you can raise a request for your personal loan statement through phone banking as well.
- Assess the need for your loan
- Do proper research to get the best rate
- Check your credit history
- Review the fine print on your loan document carefully
- Choose your loan tenure by assessing your repayment ability
- Choose an affordable interest rate
- Select your loan amount as per your convenience
- Check your EMIs properly
- Select fixed or variable interest rate according to your preference
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