Personal loans are exactly what their name suggests. They are lent to you as an individual and you can use the money borrowed for medical bills to starting a new business also to repay the credit card debt. Again according to the debt their interest rates and repayment periods depend on your credit score.
A personal loan is a fixed amount of money given to you with fixed interest rates and a fixed repayment period.
There is no collateral such as car, property, or fixed deposits at the bank. So, the bank has nothing to take away from you when you fail to repay the amount on time that is why interest rates for personal loans tend to be on the higher side. IDFC First personal loan bank is one of the banks that provides lower interests according to the customers demand and financial situation!
Because personal loans can be used for anything and everything do not take the loan for unnecessary expenses as it will just keep on increasing your pile of debt. While taking a personal loan to pay back your credit card debt pay attention to the interest rates of both. Only take the personal loan if it has a lower interest rate. It can just so happen that your debt will just stick with you in a different form. It also might not be a good idea to borrow a personal loan for pure luxury purposes.
- Personal loan interest rates –
This the money which you have to pay on top of the principal amount borrowed. This is highly dependant on your credit score. These rates vary widely between 8-14% of the principal amount.
The amount of money allowed to be borrowed has maximum and minimum limitations. In India, it varies anywhere between Rs.25000 to 1 Cr. of course depending upon your credit score and earning capabilities.
- Term length –
Depending upon your credit score and amount borrowed you are given a time period to pay back the amount borrowed and interest. It tends to from 1 year to 5 years in India.
Unlike other loans, early repayment of a personal loan might come with some extra charges depending on the bank.