}

What is a personal loan?

A personal loan is usually offered by financial institutions, like local lenders, credit givers and banks. A personal loan is different from other loans, as you can use it for multiple reasons. These loans have to be paid back on a specific period called tenure. There are many lenders out there; one has to take reasonable precaution before taking a loan. ICICI Personal Loan has a reasonable interest rate.

A personal loan is an unsecured loan, where there is no collateral exchanged as a security for the lender while giving the borrower the fund. A personal loan can be used for many purposes, whether for conducting a marriage, a meeting, spending on vacations, or shopping. The interest rate of a personal loan is low as compared to the interest of a credit card. An individual can use a personal loan to make big purchases, as you have a lesser interest rate than credit cards.

What are the factors that can affect you while taking a personal loan?

Credit score: The CIBIL score contains the individual’s credit score. The primary purpose of creditworthiness checks is to decide if a client is qualified for a loan.

Repayment history: If you pay all your EMI and repayment on time, then chances for you to have a bad credit score.

Your income level: For a lower interest rate, your income should be high. When you have a higher income, you are considered a healthy candidate, as you can pay back the money on time.

Defaults: You become a defaulter when you fail to pay the repayment for three continuous months. When you are listed in the defaulter’s list, the chance for you to get the personal loan is scare. As in the eyes of the lender, you pose a risk of not paying on time.

Your relationship with the bank: When you have more accounts in a single bank. Having both a savings account and a fixed account in a single bank will make you the bank’s loyal customer, and to these people, they usually provide good deals - low-interest rate and other benefits.

The reputation of your employer: When you work under MNC and other notable companies, then to these individuals, you may get the chance of receiving better deals - low-interest rate and other benefits.

What is the eligibility of a personal loan?

The eligibility of people to apply for a personal loan varies according to the lender:

The age of the applicant should be between 21-60 years of age.

Sixty years of age is the maximum for salaried employees and 65 years is the maximum for self-employed professionals.

The individual should have a minimum ₹18,000 salary. (varies according to the bank )

The candidate should be working in the same firm for at least one year.

What are the various categories of a personal loan?

Wedding loans: You can use the loan amount to conduct marriages.

Travel loan: When you don’t have enough money to go on trips, you can apply for a personal loan.

Home renovation loan: A house loan is available for the sole purpose of building or buying a residency. When it comes to purchases for the renovation of a home or repairing your house, one can use a housing loan for this purpose; here, you can use a personal loan.

Pension loan: A pension proof of the person is required; along with this, you have to be eligible for applying for the Personal Loan.

Education loan: You can take a loan for paying off the educational fee such as a semester fee, admission fee, school fee, exam fee etc.

Festival loan: Festivals play an important role in Indian culture - whether it is Diwali, Holi, Christmas or new year, you can use the money to celebrate these.

Conclusion: Consumer durable loans- The durable consumer loan is used for purchasing white goods. Computers and mobile phone loan-Some lenders provide the loan service to buy a phone or an exclusive laptop. With the loan, and some lenders provide insurance; are the other category of a personal loan.

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