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Banking & Insurance

Syndication & Funding

Unsecured loans

UNSECURED LOAN:

A Personal Loan is a viable way to fund anything from Emergency to a holiday abroad to your child’s education and a home renovation to a wedding in the family. One can avail of a loan without any collateral or security for a pre-decided period of time at a particular rate of interest. In order to apply for a loan and minimize the risk of lenders, the borrower will need to provide proof of employment and income along with sufficient identity proof.

You might have planned your finances diligently and with utmost care. But there will be situations where you are caught unaware and have unexpected bills to pay urgently. At such junctures, when you have very few options left to arrange money, personal loans can come in handy.

But once you have taken a personal loan, you need to pay the EMIs that includes principle repayments as well as interest payments. It is then your duty to find options that can help you reduce your interest costs and EMIs. This is possible if you can transfer your personal Loan to a financial institution, which offers lower rate of interest

Documentation required for Salaried Individuals:- (All copies of documents should be self attested by the customer)

  • Identity proof: Aadhar Card, Valid Passport, Valid Voter ID Card or a Valid Driving License
  • Address Proof: Ration card/Passport/Telephone/Rental Agreement/ Electricity bill
  • 6 months bank passbook or last 3 months bank statement
  • Recent salary slip or current salary certificate.
  • Latest Form 16

Documentation Required for Self-Employed Individuals and Working Professionals

  • PAN Card: For Company /Firm/ Individual
  • Identity Proof:Passport/Aadhar Card/Voter's ID card/Driving License/Pan Card
  • Address proof: Aadhar Card/Passport/Driving License/ Voter ID-Card
  • Latest 6 months Bank Statement
  • Latest ITR along with computation of income, recent Balance sheet along with Profit & Loss a/c (CA Certified /Audited) for the last 2 years
  • Proof of Continuation
  • Apart from these documents, other compulsory documents are – Sole Proprietorship Declaration Or Certified Copy of Partnership Deed, Certified original copy of Memorandum and Articles of Association (certified by Director) and Board resolution (Original).

Process for Personal Loan:

Eligibility

Lenders have set minimum eligibility criteria for their personal loans. This can include any of the following:

  • Age.You will need to be 18years or older to apply for a loan in most states. Some states require you to be 19years or older.
  • Income.You may need to earn over a certain amount to be eligible to apply for a loan. Check with the lender for any annual income requirements.
  • Employment.Most lenders will require you to be employed and working in a stable job.
  • Residency.Must be an Indian citizen, a permanent resident of India.

However, even if you meet the minimum requirements for a loan you won’t be approved unless you can prove you can afford the repayments. Lenders determine this by looking at your income, your debts and the stability of your employment.

Application

The application process for a personal loan differs between lenders. Generally, you will have the option of applying online, in-branch (if the lender has branches) or over-the-phone.

  • ID.You will need to provide your driver’s license, passport or another form of government-issued identification.
  • Proof of income. Depending on the lender you may need to provide three to six months of pay stubs, bank account statements and/or two years’ of tax returns if you’re self-employed.
  • Other financial documents.If you have other debts, such as loans or credit cards, you may need to provide statements from those accounts.

Online applications usually take just a few minutes to complete if you have all your information ready.

Approval

Some lenders can give you an answer instantly while others may take a few days or weeks to approve. There are two forms of approval: full approval or conditional approval.

Conditional approval usually takes less time but is given on pending more information from you, such as additional pay stubs or documents relating to your assets or debts. Lenders may just ask for this information and not offer any conditional approval. This is to help them make a more informed lending decision.

Full approval is given when you have supplied sufficient information for the lender to make a decision on your application.

Loan Funding

Your loan can be funded in a number of ways depending on the type of loan it is and what you’re using it for. For example, when you take out a car loan the lender may pay the car seller directly. This is often the same case with a debt consolidation loan as well, with the lender directing funds to your debtors directly rather to you.

If it’s an unsecured personal loan, the funds will be sent to the bank account you select. Some lenders can transfer funds on the same day of approval while others might take a few days following approval.

Repayment

Most repayment terms are monthly. When choosing your repayment structure, you may want to consider additional and early repayments.

  • Find out if your lender will charge fees for additional repayments.
  • Check if your lender has restrictions on how much you can repay extra per year (fixed rate personal loans may have this).
  • If you’re planning to repay your entire loan balance early, check if there is a penalty is applicable.

Loan closure

If you’re simply making your repayments as set out in your loan contract, then your loan should be closed following your final repayment. However, if you are planning to repay your loan early, it’s a good idea to call the lender and get a final payout figure if you’re getting close to paying off your loan. This is to ensure the loan will be closed when you make your final payment and you won’t be charged any unexpected interest.