Personal loans are a way to use tomorrow’s income today, and unlike other loan products such as buying a home or paying for education, the process is straightforward.
Indeed, if you already have an account with a bank, you would have encountered many personal loan offers. While these are easy to get and offer almost instant gratification, you should note that the interest rates are much higher than, say, for a car loan. This is because personal loans are unsecured loans. This means that the loan is not backed by any assets; you don’t need to put up an asset like property or gold to be able to get the loan.
However, the amount of the loan offered and its interest rate depend on a few parameters such as your income, your credit, your repayment capacity, and others.
There are currently different versions of personal loans, some of which are called instant loans. These are pre-approved loans – the lender has already reviewed your information, on the basis of which they are offering this loan. Learn more about them here.
Easy to get, but not that easy to repay. Remember, personal loans come with high interest rates, so continued default will put you on a downward spiral. Read more here. Here are some personal loan rates and other costs from major private and public sector banks in India.
Never miss a story! Stay connected and informed with Mint. Download our app now !!