As per the data revealed by RBI, personal loan borrowers have tremendously increased in India, since the last decade. This is because:
- Most of the personal loans are collateral-free and does not require you to pledge your assets.
- Many lenders offer personal loans online with minimal documentation and you could get money on the same day.
However, you get many benefits such as quick processing and instant disbursal, it is also important for you to be aware of all the loan terms and conditions. This way, you can save yourself from any financial hiccups during repayment of your loan.
Personal Loans Terms & Conditions
The rules and regulations for personal loans in India are governed by the RBI, which is commonly followed by every lender. But for more detailed information on the terms and conditions of the loan, you need to cross-check with your lender. This information differs from one lender to another. So read the entire loan agreement carefully and sign the dotted line only if you have agreed to the lender terms and conditions.
Some of the things that you should keep in mind include:
- Loan Usage – The terms and conditions of a personal loan are versatile and without any restriction, you can use a loan for any of your personal needs like paying your medical bills, renovating your home or even taking an impromptu vacation.
- Eligibility Criteria – Since most of the personal loans available are unsecured, your lender requires you to meet the personal loan eligibility criteria. There are better chances for you to negotiate with your lender for on the terms and interest rates if you meet their criteria.
To avoid hassles, choose a lender like FlexSalary who instantly approves your loan based on a simple eligibility criterion that is easy for you to match up. To be eligible, you should:
- Be of Indian nationality
- Have an age of 21 years or more
- Be a salaried individual with a minimum monthly income of INR 8,000.
- Loan Repayment – Check out the interest rates which are applicable on your loan. Most of the loans are repaid in the form of EMIs or you can pay your loan in a lump sum. Also, verify the payment procedure with your lender. Again, these conditions vary based on the lender and the type of loan you have chosen.
- Prepayment policies – If you decide to repay the loan amount before its actual tenure is completed, then it is either referred to as pre-payment or foreclosure of the loan. Though making prepayments can make you debt-free sooner, make sure there is no heavy prepayment penalty levied upon you. It is better to take a loan from a lender who does not levy any prepayment penalty.
- Other additional/hidden charges – There are additional charges like processing charges, hidden fees, EMI bounce charges, statement charges, etc. along with interest charges when you apply for a personal loan. Therefore, you need to read the entire agreement in detail regarding the terms, conditions, various charges involved when you are applying for a personal loan and then sign the agreement. Though you may not escape from some of these charges, you can at least choose a lender who does not levy any sort of hidden charges.
Based on the above-discussed points, hope you are now aware of the basic terms and conditions pertaining to personal loans in India. So, it is better to read the fine print thoroughly before signing.
If you are looking for a lender with no hidden/extra charges, consider FlexSalary. You can apply for a loan amount from a minimum of INR 4,000 to a maximum of INR 2,00,000 with flexible repayment options.