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Kindly Attention & Collect all documents before apply a personal loan

Documents for Salaried Person

Minimum Salaried Required as per Banks & NBFC is more 15K or 20K. that is net amount of credit in your salary account, below this salary structure is not eligable.

1. Proof of Identy = Pan Card of Applicant
2. Proof of Address = Aadhar Card/ Electricity Bill/ Water Bill/ Voter Id Card and Rent Agreement of Applicant
3. Official/Personal Email Id & Contact No.
4. Last 3-6 Month Salaried Bank Account Statement
5. Salary Slip last 3 Months
6. Form 16 Last 2 Year if Applicable
7. Mandate details of E-Form

what is a personal loan?

A personal loan is money borrowed from a bank, credit union or online lender that you pay back in fixed monthly payments, or installments, typically over two to seven years. Lender rates can range from 6% to 36% APR.Most personal loans are “unsecured” — not backed by collateral. A secured loan backed by something you own is typically cheaper, but you can lose the asset if you default. You usually can use the money for any reason.

What Is an Annual Percentage Rate (APR) on a Personal Loan?

The annual percentage rate on a personal loan includes fees and allows you to compare total costs among loans.The term “annual percentage rate” is commonly used in reference to financial products such as mortgages, credit cards and personal loans.Personal loans are fixed-rate installment loans, which means your interest rate won’t change over the term of the loan and you pay the loan back in equal, monthly installments. Lenders assign an interest rate based on your credit score, credit report and the ratio of your debt to gross income. The interest are reduceing or flat rate.

What is the difference between flat interest rate and reducing balance interest rates?

Flat Interest Rate
Flat interest rate, as the term implies, means an interest rate that is calculated on the full amount of the loan throughout its tenure without considering that monthly EMIs gradually reduce the principal amount.
As a result, the Effective Interest Rate is noticeably higher than the nominal Flat Rate quoted in the beginning.
The formula of calculating fixed rate of interest is –

  • Interest Payable per Instalment = (Original Loan Amount * No. of Years * Interest Rate p.a.) / Number of Instalments
  • Monthly Principle = Loan amount/Number of installments
  • Monthly EMI is Interest + Monthly principle
  • Consider a loan of Rs. 100000 at 12% per year (1% per month or Rs. 1 Per Sekda.) interest for 3 years.
    Flat interest for 3 years would be Rs. 36000 (1000000 X 12/100 X 3). Total amount to be repaid Rs. 136000. The monthly installment would be 136000/36 = 3777

Reducing / Diminishing Interest Rate
Reducing/ Diminishing balance rate, as the term suggests, means an interest rate that is calculated every month on the outstanding loan amount.
In this method, the EMI includes interest payable for the outstanding loan amount for the month in addition to the principal repayment.
After every EMI payment, the outstanding loan amount gets reduced. Therefore, the interest for the next month is calculated only on the outstanding loan amount.
The formula for calculating reducing balance interest is –

  • Interest Payable per Installment = Interest Rate per Installment * Remaining Loan Amount
  • Now let us find out interest on reducing balance at the same installment of Rs. 3777 at the same rate of interest of 12%.
  • Opening balance of loan at the beginning of first month = 100000
  • Less installment of 3777. Balance amount of loan = 96223
  • Add 1% interest for the month = 962.23
  • Total at the end of first month = 96223 + 962.23 = 97185.23
  • Less installment of 3777. Balance amount of loan = 94342
  • Add 1% interest for the month = 934.08
  • Total at the end of second month = 94342+ 934 = 91471
  • If you keep on calculating you will find that full amount is paid in 31 months. Total interest for 31 months on reducing balance works out at Rs. 15381
  • Note that the amount of interest at flat rate was Rs. 36000

Flat interest is absolutely illogical. Why should one be asked to pay interest even on the amount being continuously repaid.
This calculation resulted in more than double the actual interest.
Natural interest would be on the amount the borrower is using. So if a bank says it will charge X rate of interest it automatically means interest on reducing balance unless the bank specifically says it will charge flat rate.

Be very careful about this while taking a loan.

This method is particularly used to calculate the interest payable for housing, mortgage, property loans, overdraft facilities, and credit cards.
In this method, you have to only pay interest on the outstanding loan amount.
The interest rates quoted for such loans are the Effective Interest Rate, which is similar to the interest rates used for Fixed Deposits (FD) and Savings Accounts.
Difference between Flat Interest Rate and Reducing Balance Rate.

What Is a Personal Loan Origination Fee?

An origination fee is an upfront fee a personal loan company may charge to cover the cost of processing your loan. It might be called an underwriting, administrative or processing fee. This fee is also common on mortgages and federal student loans.That ranges between 1% and 6% of the loan amount. The fee you’re charged also depends on your credit profile.

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