We are going through a financial crisis that has never been witnessed before post the times of the Great Depression of the 1940s. There have been random job losses in the country with the per capital income of the country shrinking and people falling onto their savings and looking to eradicate the financial problems by resorting to their life's savings. In such times of financial crisis, people have felt the urgency to lean towards short term personal loan which grant monetary liquidity to the borrower so that they can regulate their flow of life and continue with their daily expenses and meet their daily requirements.
Following is a complete guide of the personal loans-
- Definition of personal loans
Personal loan refer to the amount of money that can be borrowed from the banks at a particular rate of interest. The interest amount is a fixed percentage of the total amount of loan availed by the borrower. The facility of personal loans can be availed by the lender when he or she faces an acute cash crunch. Nowadays the disbursal of loan facilities has become smooth and superfluous with banks operating at a peak efficiency level.
Whenever the borrower goes to the bank to borrow money he or she can expect a quick disbursal of the loan amount, which is transferred to the bank account of the individual who is availing of the loan facility. No mortgage or personal guarantee is required to be kept for availing personal loans as it depends on the capability of the borrower to return the money within the stipulated period. Timely interests are also to be paid by the borrower.
- Eligibility for Personal Loans
The person who is availing of the personal loan facility must be able to meet the eligibility criteria mentioned in the banking regulation policies. For example, the person availing the loan should present adequate documentation showing age proof, income proof, income statement showing whether the person is capable of repaying the loan amount, etc.
The person availing the loan should also be employed by a middle-income person who is employed in a private sector, public sector, or government sector undertaking. The eligible person upon presentation of the correct documents can get the loan amount easily transferred to his or her bank account which is provided to the bank while applying for the loan.
- Tenure of the Loan
The tenure for availing a personal loan is for a term of 1 to 5 years. This means that the borrower of the loan must pay interest in 12 months to 60 months. The interest amount is fixed which the borrower has to pay to the lender bank. The rate of interest varies according to the policies mentioned in the guidelines of the Muthoot Finance Personal Loan.
Conclusion: Thus in conclusion we can say that personal loans are an important part of the personal financial structure in the country.
