What is Personal Loan?

A personal loan is money you borrow for any purpose, that Can be use to consolidate high EMI Debts like Credit card or to pay credit card bills and want to improve your CIBIL, as per a study people those who pay only the minimum bill payment of the credit card end up paying 36% Interest rate and this also impact their CIBIL Score as well, or other case may be you need money for your personal use like buying a Jewellery for your wife planning to go on vocation or unexpected Medical Bills or buying new home decor for your house or any other purpose which you don’t wish to disclose You pay the money back including interest in monthly instalments over time, usually the repayment tenure is for two to five years, Most of the personal Loans are unsecured that means the personal loan is without any security and Only

In earlier day when banks or financial institution were not so aggressive on funding, people used to borrow money from His friends or relative for a shorter period, but now since the practice of borrowing money from friends and relative is very less because of following reasons

  • People feels Shy while asking the financial help
  • People don’t want their friends or relative to know their financial health
  • People don’t want to let the friends or relatives know that they are in dying need of money
  • Fear of listing “NO” people have a fear what if my friend will deny for the money
  • Social Status, now a days people don’t like to borrow because that might hamper their social status
  • Even if a friend lends you the Money and you honestly want to repay that money still that to be paid in Lum sump this is possible when the money is small as per your earning what if the money borrowed is high that will again take you to the financial stress and might create a endless loop
  • People Avoid to spoil relationship with their Friend and relative There is a saying “I had a Money and a friend, I lend the Money to my friend, Now I don’t have Either of them” People don’t borrow or lend money from friends and relatives because in most of the cases that will lead to spiling that relationship.

What is the Rate of Interest on Personal Loan?

The interest you pay on personal loan is expressed as an annual percentage rate (APR) or Rate of Interest. The average rate of interest on  personal loan Starts from 8% in Jan 2022 but it can range from 8% to 36% depending on following reasons

  • Depends on Cibil (www.bankemi.in/cibilscore) score higher the CIBIL Score Lower the Rate of Interest
  • Depends on Company you work for best the company lower the Interest rate for Example a person working in TCS will get the lower rate of interest then a person working in a small-time company. Every banks have list of companies where is classified as AAA Rated AA Rated A Rated and so on, wish to know what is your company rating www.bankemi.in/companyrating
  • Depends on past repayment track of the customer whether he has availed any unsecured loan in past of not if yes how was the repayment, was all EMI were on time or there was any delay in EMI Payment. It is like you borrow 5000 Rs from your friend and make a promise to pay back in 15 days and you return that money to your friend in 14 days, Now if you will again ask to your friend in future for 15000 he will not refuse because you kept your promise last time. Same ways banks also work.
  • Depends on the Qualification of the borrower for example a person is doctor in tata memorial hospital and in the same hospital there is a clerk both wish to take the loan from the same bank in this case doctor will be charged lower Rate of interest because he a professionally qualified.
  • Generally personal loan Rate of interest is lower/Lowest in case of Charted accountant, Doctors, Company Secretary, Architects
  • Also depends on the repayment capacity of the borrower for example if you are earning 30000 salary per month and looking for a loan of Rs. 500000 whereas the EMI for the Loan comes to 10138 in this case you will be charged the lower interest rate because the EMI you will be paying is 1/3 of earning if in case the required loan amount is Above ½ of your earning in that case The Rate of interest will be charged on higher side. Know your EMI on www.bankemi.in/EMIcalculator or know your eligibility on www.bankemi.in/eligibility or Best Rate of interest on Personal loan among the top 10 banks in india www.bankemi.in/bestpersonalloaninterest

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