Personal loans are any purpose loans which are given without any collateral or guarantor. This is a very unique loan product wherein the borrower is at his/her discretion to do whatever they need. In other words, unlike a car loan or a housing loan, a personal loan can be used by the borrower for any of his/ her personal needs. There is no restriction for the usage of such loans though it should not be used for speculative purposes and investment in tax saving instruments. The loan can be repaid like all other loans through the equated monthly instalment (EMI) process where a fixed amount is paid each month.
Personal Loans has the following features:
- They are provided without any specific purpose.
- They are given without a collateral or guarantor.
- They come at an attractive rate of interest.
- They are relatively short term loans vis a vis other loans(i.e 3 to 5 years)
- Personal Loan can get disbursed as fast as 24 hrs if the documents are in order.
Personal loans are currently offered from Rs 50,000 to Rs 50 Lakhs and are typically repaid in tenures ranging from 1 to 5 years.
Higher Loan Amount + Least Loan Tenure = Low Interest Amount