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Personal Loan कैसे ले - Eligibility, Interest Rates, EMI & Personal Loan Tips - YouTube
Channel: Asset Yogi
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Namaskar, my name is Mukul and welcome to AssetYogi
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where we unlock and not lock, knowledge of finance.
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In today's video, we are going to talk about Personal Loans.
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We will learn in detail how to take a personal loan.
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In what situation should you take a personal loan.
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In previous videos, I have talked about how a personal loan
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is the most expensive loan.
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So you should generally avoid it.
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In this video, we' ll see in what situations you should go with a personal loan.
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What is the eligibility requirement and what is the documentation required?
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How much is the intrest charged generally.
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We will learn everything in detail
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and at last, I will give you tips on what are better alternatives to personal loan
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or how can you get eligible for a loan.
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Stay tuned to this video till last. let's go straight to the blackboard.
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So first, let's understand what is a personal loan
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and what are its important features.
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So personal loan is an unsecured loan with high-interest rates,
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we have talked about this earlier.
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An unsecured loan means there is no security involved.
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Like in the case of home loans, your property is mortgaged
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in case of a gold loan, your gold is kept as a security.
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In case of car loan, car is kept as security.
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There is no security of any sort in the personal loan, hence the interest is high.
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Secondly, you are getting a personal loan based on your credit history.
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Because there is no security involved, so credit history means
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if you have taken any loans in the past or owned a credit card
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so how was your payment history, if you paid your dues on time
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you credit score will be good.
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On that basis, you will get a personal loan.
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The approval is instant in the case of a personal loan.
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You can get approval in under 30 minutes.
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So this is the biggest positive point, minimum documentation is required
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and the load approval is instant.
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So for what purposes can you take a personal loan?
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So the main purposes to get approved in banks are
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one is if you are planning a vacation, you can easily get a personal loan for that.
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Or if you want to renovate your interior, you can easily get a loan for that.
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If there is a wedding in your family,
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If there is a medical emergency, or you want to fund education
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of yours, your childen or your relatives.
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Or if you want to buy a big home appliance.
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Or if you want to transfer a loan of high-interest rate
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you can take a personal loan and transfer.
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These are some common purposes when a bank easily approves a personal loan.
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And as I told you earlier personal loan is unsecured,
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no collateral as security is needed.
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So in this case, if there is a default in the loan, and the bank
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can't recover the amount
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so what happens is, your credit score is affected badly.
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Credit score as I have already told you in earlier videos
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that CIBIL score is calculated out of 900, and generally, you should try
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to keep your score 750+ .
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Keeping it over 750 have benefits that you can get credit card and loans very easily.
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You don't want your credit score to be bad,
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so you should not default on your loan payments.
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Definitely is the bank doesn't get their money,
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they will try to ruin your credit score.
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A loan size of a minimum of Rs 50,000 gets approved very easily
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in most banks as a personal loan.
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And the maximum it goes to upto Rs 25 lakh.
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In some banks it could be Rs 15 lakh.
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And some bank allows upto 25 lakh.
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You will generally get a tenure of 1 year to 5 years, a minimum of 1 year,
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and a maximum of 5 years.
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Interest rates are always high and this is the biggest drawback.
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I will write here as well
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this is the biggest drawback so I always
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advise you to prefer a personal loan the least.
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The interest rate for a personal loan is generally 3- 10%
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higher than the home loan.
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So for example, let the home loan rate be, 8% so keep in mind personal load will be
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of 12- 20% intrest rate, whenever home loan is of 8%.
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If we talk about a customer of the same profile
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getting a home loan at an interest rate of 7- 8%
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will get a personal loan at a rate of 12- 12.5%.
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So this is a lot at least 40- 50 % more than a home loan.
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Still, there could be some cases where you need to take a personal loan
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we will see those later in the video.
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For example, you take a personal loan of 5 lakh at an interest rate of 15% per annum.
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So your EMI will be around Rs 12,000.
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And you will definitely need to repay the principal amount of 5 lakh.
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And your total interest payment after 5 years will be around
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Rs 2 lakh 13 thousand 7 hundred.
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So you can see, you have taken a loan of Rs 5 lakh
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and you need to pay almost half as interest under 5 years.
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Your total repayment is calculated to be around Rs 7 Lakh for a loan of Rs 5 Lakh.
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So, secondly, there is a lock-in period in generally every personal loan
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of minimum around 3 months to 12 months in which you
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can't close your loan.
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The bank would want to earn a minimum interest.
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So generally every bank keeps a lock-in period of a minimum of 6 to 12 months.
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Then how is a personal loan paid? It is generally paid electronically
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we call it Electronic Clearance Scheme (ECS) or Auto debit.
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So this is generally debited from your bank,
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the bank auto-debits the EMI amount.
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Another option is post-dated checks, nowadays it is preferred less
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and ECS and Auto debit are prefered more.
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Most of the banks will ask to fill an ECS form,
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so that your EMI will be deducted automatically.
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These are the important features of personal loans.
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Now let's see the eligibility requirements for this.
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How much loan can you get and what factors determine that.
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First of all, it depends on your repayment capacity,
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it means what is your annual income,
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and how many other loans are you already paying.
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Let me explain you with an example, let say your monthly income is
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Rs 60,000
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and let's say you are already paying EMI
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if i suppose your current EMI
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let say you are paying an EMI of Rs 15,000
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and i have alredy told you in earlier videos,
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that you can just pay max of 50% of your income as EMI.
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In this way your loan eligibilty gets calculated.
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And this other Rs 30,000 is used for your household and normal expenses
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and you can pay EMI of maximum Rs 30,000.
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If you are currently paying an EMI of Rs 15,000
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so you can afford a maximum EMI of the rest Rs 15,000 right.
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So over this sum of Rs 15,000, your eligibility will be calculated.
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And this way will know your capacity.
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So your minimum income should be Rs 15,000 per month
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then only your personal loan get approved.
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In some banks it can also be Rs 20,000, every bank has a different requirement
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but generally it is of Rs 15,000- 20,000.
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In today's case and future, it can increase as well.
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Then your customer profile is seen if you are salaried, self-employed
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professional or run a buisness
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what type of occupation are you in?
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What type of your company is?
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How is your income stability.
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If there are many ups and downs in your income,
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so maybe you cannot get a loan easily.
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A loan for the salaried class gets approved very easily because of income stability.
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In the case of professional or business
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if there is a lot of ups and downs in your income
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so your loan will get approved according to minimum monthly income generally.
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Then they see your age, generally for salaried, minimum age is 21 years
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and maximum 60 years.
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In the case of professional or business minimum age is accepted to be 25
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and the maximum to age 65.
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25 years is taken because they want
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your business to be in the running of a minimum of 3 years.
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So in the case of professionals and businessmen,
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the business should be running stable for at least 3 years.
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Other than this, a credit score is also a big deciding factor
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always in a personal loan, whenever there is an unsecured loan
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I have already told you many times a score of 750 is considered to be good so
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your should try to increase your score if your score is less.
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Now how to increase CIBIL score, I will surely make a video on that.
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Your assets are liability are accounted for,
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your liability should not be more than your assets.
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Let's say your assets are Rs 1 crore
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and have already taken liabilities of Rs 50- 60 lakh.
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So the bank sees that negatively, your loan will not get approved easily in that case.
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This tells you to have a habit to take a lot of loans right.
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so repayment could be a little problematic for you.
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Other than this, Your dependents are also looked upon.
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Now in this example, we see, your income is Rs 60,000
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have lot of dependents, and so your monthly expense itself is Rs 50,000.
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So your eligibility will be calculated according to Rs 10,000.
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Then other than this, income earned by the spouse is also accounted,
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it may happen you have a lot of dependents,
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but your husband or wife also earns
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so your eligibility could also be calculated by adding it.
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Bank also calculates your spouse's income for eligibility.
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These are the factors used to calculate eligibility,
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now let's see some additional charges,
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when we take a personal loan or any loan then
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one is we need to pay interest it is the principal right.
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this is the the main charge of bank.
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other than this there are some additional charges that you need to know.
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One is the processing fee when you apply for a loan
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then 1-2% of loan amount + GST is charged as a processing fee by bank
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these are basically admin charge of bank
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Whatever the cost, of the employee, admin charges,
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maintenance fee, and documentation charge
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they take from processing fee.
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Other than this there are some Pre-payment & Foreclosure charges,
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some banks do not charge this
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especially when we talk about floating interest,
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generally banks do not charge this fee
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But yes, say if you pay your outstanding loan amount by loan transfer, let's suppose
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you are paying using another bank right. You are getting a low-interest rate
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so this may happen that you are transferring your bank from there,
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so you might need to pay charge in this case.
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Pre-payment & Foreclosure charge
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is generally, 2-3% of outstanding loan amount.
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So if you are applying for a personal loan in any bank you should try
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that this Pre-payment & Foreclosure charge are none, should be nil there.
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You should surely negotiate this with the bank.
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Other than that loans are also sanctioned with a fixed interest rate
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in this case generally bank charges 2-3% of outstanding loan amount
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as Pre-payment & Foreclosure charge.
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Now this Pre-payment & Foreclosure charge means,
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let say you took a loan for 5 years
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and after 2 or 3 years you get 2 lakh or more and you made a pre-payment
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So that we call as pre-payment or foreclosure
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if you make pre-payment & foreclosure
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like this then can charge you.
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Then GST is also applicable on these charges like processing fee,
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pre-payment & foreclosure charge
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or if any of your checks bounce, there are some charges for that.
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So on these service charges 18 % GST is also applicable,
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it could change in the future but
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GST is always applicaple on servies.
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These were some additional charges, now let's quickly see some documentation
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what kind of documentation is required.
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First let's talk about salaried class
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One is application form with photograph
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then your identity, residence and age proof like
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Pan card, Aadhar card and Passport ,etc.
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You need to show the bank statement for the last 6 months,
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and the salary slip for the last 3 months.
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One cheque for processing fee, 1- 2% charge that I talked about earlier.
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Income tax returns and Form 16
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for the past year are required for the salaried case.
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These documents are also required in case of self-employed and business
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just that in case of business salary slip is not required.
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Other all document are required.
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And get along if you are in business, so proof of business existence
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and busisness profile is required.
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So the business profile of the last 3 years is required.
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If you are a self-employed professional
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You are CA, or Chartered Accountant (CA), or any architect
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or you are a lawyer, so if you work like an independent professional
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then your education certificate is also required.
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Then along with that in case of business and professional,
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your 3 years of Income Tax return is also required.
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We were talking about only 1 year but here 3 years is required.
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And in addition to this your Audited balance sheet
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and profit & loss account statement is also required.
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These all documents are required for a personal loan
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these are common for all types of loans.
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I have also told you about these in my previous videos.
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Still i run you through once, here.
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Now lets talk about pros & cons and some tips.
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Loans have some pros & and some cons let see those.
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If we first let's talk about the pros of a personal loan.
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So minimum documentation is required, hassle-free process, and instant approval.
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because you can easily apply in your bank where you do banking.
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And the second advantage is instant approval, as we talked about earlier
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your loan could also get approved within 30 mins if you apply to your bank.
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But I don't say that you have to always apply in your bank right.
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you could if there is some emergency but you will not get a good interest rate
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if you apply in your own bank
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because how will you find competetive rate right.
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This is also a very big disadvantage, let come to cons
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First of all, this is a very expensive loan as we talked about personal loan
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that it has high intrest rates
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as i talked about home loans that
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personal loan could be 3 -10% higher than home loan.
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Secondly, there is a lot of variation in interest rate as we saw earlier
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that there is a variation from 12% to 20 %.
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Now, this variation depends a lot on the customer profile.
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Now other secured loans like home loans and loans against property
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now because the property is kept as collateral as security
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so there is not a lot of variation.
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Now, if you have a good profile then you will get a loan at a minimum interest rate.
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But suppose you defaulted even a little in the past or your credit score is low
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so in cases like these, you can also be charged high interest up to 18 -20 %
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so you should try to always maintain a good credit score
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because could be required at any time, loan or credit card right?
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So these were some pros and cons, now I will give you some tips
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The first tip I always give is to compare interest rates,
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in today's date, there are many online sites where you can compare interest rates
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And you should negotiate, every bank negotiates interest rates
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you can easily negotiate from 1 to 1.5%.
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I'm not saying if the bank gives a minimum interest rate of 12%
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it will give you less than that to you.
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But suppose initially the bank quotes 14% then you can negotiate it to let say 13%.
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so this much is very much possible.
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So try to negotiate and
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in whichever financial institution you are getting the lowest interest rates
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you should go there.
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Then explore cheaper loans first. What does this mean?
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This mean, let say your loan requirement is very high, 15 lakh or 25 lakh
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so these amount are rather large,
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so it is better than personal loan let suppose you are buying a property
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then take a home loan.
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If you have any other requirements, you can take a loan against the property.
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If you have a property, you can take a loan by mortgaging that property.
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Second, another example is of top-up loan,
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suppose you already have a home loan in progress
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you can also get a top-up loan over it. A lot of people are unaware of this option
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but you can take a top up loan.
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I have already made videos in detail on these three,
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if you watch, you will get to know
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what are the important features of home loan,
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loan against property, and top up loan
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and how can you apply them.
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So do watch these videos, you can search on youtube.
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Go for personal loans for smaller amounts right.
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When there is low amount is required
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Suppose you require a small amount of 2 lakh to 5 lakh
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then you can take a personal loan.
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And second for a shorter time period. Try to repay the loan as soon as possible.
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Try to take a loan for a small period of time like 2 years to 3 years or
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a maximum of 4 years
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there is no need to go for 5 years or 6 years.
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So for the least amount of time you take a loan the least amount of interest amount
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you need to pay right?
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Then only take a personal loan for urgent requirements
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if you have time and if you can apply you can go for these loans
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like home loan, loan against property, topup loan
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if you are taking a loan for education, you can take an education loan.
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Home improvement loans are also given seperately
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these types of loans have a low-interest rate,
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so a personal loan should be your last option.
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Then suppose if you have taken credit card debt,
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so interest rate over credit cards is very high.
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These go from 20 -30%, in fact, can also go as high as 35%,
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so it's better to take a
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personal loan, let say you are getting a personal loan at 12%
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so finish credit card debt with a personal loan right.
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So you should try to always
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keep loans of low intrest rate and repay high intrest rate loans.
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So if you have an option,
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suppose you have two loans home loan and a personal loan
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so try finish personal loan first.
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after than home loan repayment should be your last option right
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because this is the cheapest loan.
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So there we were some of my tips.
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I hope after watching this video you get an idea when
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and in what situations you should take a personal loan.
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If you liked this video then do like
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and share it with your friends and family members
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so that they could also be benefitted from this video.
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If you have some suggestions related to this video or related to the channel
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or if you want to suggest a topic for future videos
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then you can tell us in the comment section below.
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I share this type of financial informative and interesting video on this channel.
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then by subscribing from below, press the bell icon on your phone.
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So see you in the next informative video.
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till then keep learning, keep earning, and be happy as always
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