Posted on August 9, 2021
Personal Loans – All You Wanted to Know
Personal loans are separated into two types: income-based and non-income-based. For salaried and self-employed individuals, income-based loans are issued on the basis of monthly/annual income.
Non-income-based loans, also known as surrogate loans, are granted based on current personal loans, vehicle loans, home loans, and credit cards from recognized banks.
Minimum installments paid/Months on books required is 9-12 months. If you want to get the loan service online then you can have a peek at this website.
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How is eligibility calculated?
Different banks use different methods to determine eligibility. In the case of salaried workers, most banks would calculate eligibility at 1/1. 5 times yearly earnings.
Current loan liabilities, average bank balance, track record on existing loans, company profile, and loan tenure are all taken into consideration when determining eligibility.
The eligibility of self-employed people is determined by their turnover, track record, net profit, cash credit/overdraft limit, line of business, cash flow, bank statement, and existing loan liabilities, among other factors.
The loan amount is typically limited to 1.25 to 4 times the cash profit earned less existing liabilities, or a specified percentage of turnover less existing liabilities.
What is the loan tenure?
The loan tenure refers to how long the borrower intends to repay the loan. Loans can be repaid over a period of one to five years. The general rule is that the longer the tenure, the higher the loan eligibility, and vice versa. The loan tenure is also influenced by the applicant's age and remaining service time.
What are service charges?
The fees that the bank charges for processing and disbursing loans are referred to as service charges, loan processing charges, or bank charges. It is withdrawn from the loan amount directly and is usually limited to 2% to 3% of the total loan amount. It's a one-time payment.