We all have needs and aspirations that remain unfulfilled due to the gap that exists between dreams and reality. And this is where a Personal Loan can help in making a difference in one’s life. No matter what your financial needs are - unexpected expenses, renovating your home, going on your dream vacation, buying your special someone that coveted gift, a medical exigency, school or college admission, wedding in the family, home improvement or you simply need to pamper your family with an extended vacation; whatever the occasion. These are the time when you may need a helping hand and that’s when you can bank on, a Personal Loan.
Personal loans should be last resort for borrowers looking to arrange money on an urgent basis and for those who do not have a security or collateral to offer.
Personal loan requires lower documentation and processing as compared to other loans such as home loan and hence, offers a quick turnaround for borrowers who are looking for urgent funds.
However, personal loans are unsecured (without any collateral) for banks and hence, carry a higher rate of interest compared to other loan products such as a car loan or home loan. Hence, the typical trade off while taking a decision to avail a personal loan is between paying a higher rate of interest vs. getting a loan sanctioned quickly with minimal paperwork and no collateral to offer.
Personal loans come in all shapes and sizes. Our team works with you to get the best deal available in the market. The procedure is simple and quick. You do not have to hypothecate any collateral or property to avail this loan. All you have to do is to follow some simple steps and help our team understand your requirements.
Eligibility Check for Personal Loan:
Banks and various financial institutes extend the personal loans once you fit in the different eligibility criteria of the banks like age, income, Company working for , salary and overall profile. We understand the broad spectrum of personal loan products available in the market. Our Relationship based service model helps meet finance needs as and when required through a variety of personal loan products. We handhold you through the entire process of funding right from understanding your requirement to the closure of your loan.
Select the best personal loan product:
One should carefully look at the parameters like interest rates, application fees, processing fees charges of different banks and financial institutes before finalizing the personal loan product.
Most of the banks offer a fixed rate of interest on personal loan during the loan tenure.
Apply for the Personal Loan
Having finalized on the bank or financial institute you need to fill the application form of the selected institute. The form will require you to provide all the information about your financial assets and liabilities, salary, company you work for and other personal and professional details. Care2Earn team will help you fill the form as per the banks requirements.
Documentation and Verification Process
Apart from the application form filled by you, there are various documents required to be submitted along with the application form of personal loan. These documents will be required to substantiate the information provided in the application form. All these documents need to be self-attested. Care2Earn team will submit the application form filled for personal loans along with the documents to the selected bank or financial institute.
Eligibility and Credit Check
Bank checks the Personal loan eligibility of the borrower and also the credit history is checked through CIBIL score. The CIBIL score plays a critical role in deciding approval of your personal loan application. It is better to check your CIBIL score before applying for a Personal Loan. Target a score of 750 of above and a clean CIBIL report to get a personal loan with ease. This score is highly influential in the approval of Personal loan amount. If the CIBIL score is low the personal loan application is straightaway rejected as it implies earlier credit defaults. A high credit score is favourable for the approval of application of Personal loan.
Sanctioning of Personal loan and Issuance of sanction letter
Post the credit appraisal a final amount is decided by the bank 0and sanctions the required Personal loan. The sanction letter for the personal loan is sent to you. The Personal Loan sanction letter comprises of details like tenure of loan, EMI to be paid monthly, and rate of interest.
Acceptance of the Personal Loan
Once the borrower agrees with the terms and conditions mentioned in the offer letter he needs to send an acceptance copy to the bank.
Signing of agreement and the loan disbursal
The Bank disburses the loan amount once the Disbursal Documentation is signed and submitted.
List of documents for Salaried
Identity Proof- Passport / Driving License / Voters ID / PAN Card (any one) Proof of Residence:- Rental Agreement/Leave and License Agreement / Utility Bill (not more than 3 months old) / Passport (any one). Latest 6 months Bank Statement (where salary/income is credited). Salary slips for last 3 months. 2 Passport Size photographs.
List of documents for Self-Employed
KYC Documents: Proof of Identity; Address proof; DOB proof. Proof of Residence:- Rental Agreement/Leave and License Agreement / Utility Bill (not more than 3 months old) / Passport (any one). Income proof (audited financials for the last two years). Latest 6 months Bank statement. Office address proof. Proof of residence or office ownership. Proof of continuity of business.
Banks take various factors in consideration to determine the loan eligibility. Some of the most important factor that determine loan eligibility are
Net Salary Total work Experience Experience in the current company Qualification Period of stay in the current place & city CIBIL Score Bank's internal credit score Ongoing obligation
The rate of interest varies from each lender to lender, some factors affecting the rate of interest are
Company category where the applicant is employed: The category of the company you work in as determined by the bank. The lender for the sake of their convenience categories the companies according to their market standings i.e. Turnover, Market capitalization, cash flow, no. of employees, board of directors and many other factors, the categorization of the companies vary from Super A to D, where Super A being a premium company on the top of the chart & D being lower in the order. If the Loan applicant works in a Super A company better are his chances of availing a higher loan amount on the lower rate of interest for longer tenor.
Loan Amount
In some banks even if the companies are categorized as Super A & so on the applicable rate of interest would be determined by the net salary earned in the last 3 months. Higher the salary lower the Rate of Interest.
Multiplier Method Under Multiplier Method the Banks provide a simple multiplier on the Monthly Net Take Home Salary to calculate the Loan Amount Eligibility of a customer. The multiplier varies from 9 to 18 depending upon your profile (Company Name, NTH etc).
FOIR (Fixed Obligation Income Ratio) Under the FOIR Method the maximum EMI that most of the Bank/NBFCs offer to a customer varies from 50-75% of their NTH salary. Existing obligations & credit card outstanding, if any are also taken into consideration to calculate the Final Loan Eligibility.
Apply the personal loan together with a co-applicant who can be either your spouse or your parents. This way you can show a higher income and avail for a larger amount as the total loan is calculated on the sum total of the two incomes. The other way is to transfer your existing Personal Loan to a lower rate which would help you in reducing your existing monthly EMI which would in turn help you in getting a higher Fresh Loan. Lastly, you can also pre-pay your loans running loans where in limited number of EMIs are left in case Balance Transfer offer is not working out for you. The impact on your Loan Eligibility will be in proportion to EMI that can be reduced at your end.
