Personal Loan or Loan against Security      
Loan against security/jewellery is an easy-to-use overdraft facility up to Rs. 20 lakh granted against approved shares and mutual funds owned either by you (the borrower) or your immediate relatives (third party pledgers). The shares should be in the dematerialized (demat) form. Banks and financial institutions also accept physical shares subject to you dematerialising them through a depository account with them. Only after your shares get dematerialised will you get the overdraft limit. Now you have to decide whether you should go for the personal loan or loan against security. We have made a comparison between personal loan and loan against security.
 
Personal loan or cash withdrawal on credit card      
Withdrawing cash using a credit card can turn out to be very costly if you do not repay it quickly. Interest rates on credit card cash withdrawals can range from 20% - 40% on an annual basis depending on the type of card you use.
 
How is the personal loan amount disbursed?      
After the bank approves your loan application, it gives you a sanction letter. This is followed by the loan disbursal either by cheque or demand draft (DD). Typically, you will receive the sanction letter and the cheque/DD together.
 
Why personal loan?      
Whenever a person considers taking a loan the first question that comes to mind is about the type of loan that he/she can get. The personal loan can be used for any purpose, such as renovating your house, marriage expenses, medical expenses, holidays, purchasing consumer durables, higher education etc.
 
Personal Loan or Car Refinance Loan      
The car refinance loan is essentially a secured loan like a home mortgage loan. However, the process is much simpler and much faster. The car refinance loans allow you to take a loan on your existing car, by pledging the car registration papers at the lender's. There is a difference between the traditional car loan and a car refinance loan - The former is used to purchase of a car while the latter is used to solve your money requirement by pledging a car you already own.
 
Personal loans demystified      
Many times, you may have thought of buying a consumer durables item with a consumer durables loan. However, it is advisable to go for a personal loan for consumer durables. The reason is, though personal loan clearance takes slightly longer, the rate of interest is often lower.
 
Should you take a personal loan at all?      
Personal loans are probably the fastest and most easily available of retail loan products. They are, however, costlier than other loans, such as home loans, loans against property, or loans against shares.
 
Personal loan eligibility: Qualifying criteria      
Personal loans, or all purpose loans as they are referred to, are offered by many institutions like ABN Amro Associates, Citibank, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Standard Chartered, and all major banks in India. The eligibility criteria for a personal loan are often more stringent than those applied for other categories of loans. This is because the financier views these loans as riskier than any other loan. They are, after all, loans offered with no strings attached.
 
How to apply for a personal loan      
Is it easy to get a personal loan? Well, yes and no. On the one hand, there is less paperwork, since the bank does not have to verify any asset as in the case of home loans. On the other hand, there are stringent income criteria to qualify for personal loans. But once you make the grade it takes only about three days for you to get a personal loan -a lot less time than a home or car loan.
 
Frequently Asked Questions on Personal Loans      
What is a personal loan? Personal loan is an all-purpose loan, which is given in most cases without any kind of security like a car, home, shares etc.
 
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