A personal loan come in handy as a major tide over financial exigencies. This is because SBI personal loan or personal loans from other lenders allow you to avail personal loan for any purpose, i.e., the loan proceeds of a personal loan come with no restriction on their end usage. Besides this, you do not require pledging any security or collateral for availing a personal loan. So, the personal loan is by nature an unsecured credit option. However, owing to its unsecured nature, SBI personal loan interest rates and interest rates offered on a personal loan by other lenders may be on the higher end to meet the involvement of higher risk.
In the case, you are salaried or self-employed, there might be times you may require instant funds to meet your exigencies of distinct types. For this, a personal loan no doubt is the best solution. But speed and timing are important parameters while selecting a loan across distinct financial institutions. Various personal loan uses are for foreign or domestic travel, healthcare treatment for family members or self, marriage, education, working capital, business expansion, working needs and meeting margin money for the buy of assets and others.
Funding your major buys with a personal loan appears to be a great idea with a simple application procedure and benefits on offer. Let’s have a look at the crucial personal loan features, you must be well-versed with.
Important reasons to fund your buys through a personal loan –
A personal loan is a prudent product when you require additional financial assistance for your unforeseen expenditures. Even when expenditures are planned but you are cash deficit, it can be a great help.
Let’s go through the distinct advantages of availing a personal loan –
Versatility
One of the main benefits of a personal loan is it can be utilised for distinct purposes. Unlike education or housing loans, personal loan come with minimal restrictions on funds end-usage. Mentioned here are some of the important ways you can use a personal loan –
· Vacation expenses
· Medical expenses
· Wedding expenses
· Relocation expenses
· Occasion and festive expenses
· Renovation or home construction expenses
· Kids’ school or college expenses
· Expenses incurred on repairing or purchasing gadgets
· Exigency expenses like car repair
· Paying off previous debt
· Business expansion or continuity expenses
Minimal documentation –
The documentation process of a personal loan is paperless and contactless. The minimal documents that the lender requires, you can upload online. If required, a few banks offer doorstep pick-up services too.
Zero guarantees or collateral required –
Being an unsecured credit option, there’s no guarantee or security required for a personal loan.
Flexible repayment tenure –
Most lenders offer flexible repayment tenure, and you can select as per your financial requirements.
Instant disbursal –
Many personal loans get disbursed within three working days. The documentation is quick and minimal. This process is extremely helpful when you are an instant fund requirement.
Debt consolidation –
Personal loan rate of interest is usually lower than credit cards’ finance charges. You can make use of the personal loan to make payment of your prevailing debts.
Interest rate –
Personal loan endows a better rate of interest as compared to credit cards. In this sense, they are cheaper than the loan against credit card offers.
Ameliorate credit score –
Repaying your personal loan dues by the due date ultimately builds your credit profile and score. Paying on time is even looked upon as good behaviour by the credit bureaus.
Major key highlights, you must note for a personal loan –
· Personal loans generally are provided by financial institutions to their existing customers at a lower rate of interest or best deals.
· Personal loan is unsecured in nature meaning you do not require any guarantee or security to avail a loan.
· Personal loans come with flexible repayment tenure generally ranging between 1 and 5 years.
· Personal loans come with flexible end usage. They can simply be used for distinct purposes like wedding expenditures, healthcare expenditures, vacation expenditures, home renovation expenditures, education funding, purchase of electronics, paying off loans at a higher rate of interest, etc.
· Personal loan usually has an instant disbursal time as documentation requirement is minimal.
· Personal loan requires minimal documentation as it is usually provided to the prevailing customers and the bank tends to already have their information and important details.
Lenders and their offerings on a personal loan –
| Particulars | Loan proceeds | Rate of interest | Processing charges | Repayment tenure |
| Standard Chartered Bank | Up to Rs 50 lakh | 11.49 per cent per annum | Up to 2.25 per cent | 1 – 5 years |
| Bank of Baroda | Between 1 lakh and 20 lakh | Between 10.20 per cent and 17.55 per cent per annum | Between 1 per cent and 2 per cent + GST | 4 – 7 years |
| In Cred | Between Rs 75,000 and Rs 15 lakh | Between 16 per cent and 36 per cent per annum | Between 2 per cent and 5 per cent per annum | Between 1 year and 5 years |
| Citi Bank | Between Rs 10,000 and Rs 30 lakh | Between 10.50 per cent and 14.99 per cent per annum | 2 per cent | Between 1 year and 5 years |
| State Bank of India | Between Rs 24,000 and Rs 20 lakh | Between 10.55 per cent and 13.55 per cent per annum | 1.5 per cent + GST | Between six months and seventy-two months |
| Kotak Bank | Between Rs 50,000 and Rs 25 lakh | From 10.99 per cent onwards | 3 per cent | Between 1 year and 5 years |
| Tata Capital | Between Rs 75,000 and Rs 35 lakh | Between 10.99 per cent and 24 per cent per annum | 2.75 per cent + GST | Flexible |
| HDFC Bank | Up to Rs 40 lakh | Between 11 per cent and 21 per cent | As high as Rs 4,999 | Between 1 year and 5 years |
| IDFC FIRST Bank | Up to Rs 1 crore | From 10.49 per cent onwards | As high as 3.5 per cent | Up to 5 years |
| ICICI Bank | Between Rs 50,000 and Rs 25 lakh | Between 10.75 per cent and 19 per cent per annum | As high as 2.5 per cent + GST | Between 1 year and 5 years |
Ending note
A personal loan is a simple way to avail finance when you require it. They are processed and disbursed instantly and require minimal documentation. Personal loan rates are usually lower as compared to credit card finance charges. Also, personal loans are useful in consolidating debts into a single loan option. Generally, a personal loan is pre-approved in nature and can be utilised for various reasons.