In India, people often go for a personal loan as it is easily available in the market compared to other variants of loans. Moreover, the loan capital can be used for different purposes according to the desire of the loan borrower. Generally, the provider gives no restrictions in case of the usage.
Although a large number of people in the country take the personal loans, there are many questions that arise at times in their minds regarding the interest rates as well as overall features of the personal loan.
Common questions asked about personal loan interest rates
Here, the answers to the common questions about the personal loan interest rates are given in details:
What are the leading factors on which the interest rates of a personal loan depends?
The leading factors on which the personal loan interest rates depend are the amount of capital and tenure of the loan. To avoid lump sum repayment amounts you can take a personal loan of medium capital amount or one that has longer tenure.
It is always advisable to seek a personal loan that has a tenure of at least three to five years. The banks can give you personal loans easily if you choose a loan structure having a longer tenure.
What happens if a borrower misses a repayment?
If a borrower misses a repayment of a personal loan for a single month, he can get a chance to clear it in the next month. The issuer organization can place a legal case if the borrower misses 3 consecutive repayments for 3 months.
A borrower might have to give hefty fines and face enforcement to clear the debt related to the loan. This is a leading reason why it is a bold step to have a personal loan with a low-interest rate.
Can interest rates differ in case of personal loans taken by the salaried person and self-employed person?
Yes, as the income plays a vital role in determining the capital of personal loan that a person can get, the interest rate also differs. For the salaried people placed in a highly paid job, the interest rates can be lower than the self-employed people.
However, well settled business persons having good profit and an excellent turnover can be treated as worthy lenders by the issuer banks. As a result, they will have higher chances to get a personal loan at lower interest rates. It is all up to the bank for which structure they will give to a borrower.
Is there a minimum value that one must borrow as the capital in case of a personal loan?
The minimum amount one has to take a personal loan is different for the issuing banks. The banks maintain the minimum amounts as it eases them to calculate the interest rates of the personal loan.You might only get only the minimum amount as the loan capital if the issuer bank thinks that you are not much credit worthy.
There are a large number of people who have a tendency to take personal loans of medium amounts even if they don’t need it. Always remember to refrain yourselves from taking personal loans in such a manner. Furthermore, the people using the credit cards can face a big problem as it might put negative effects both on credit score and financial history. Always try choosing a leading bank or NBFC for taking a personal loan.