Wednesday, 31 January 2018

Can I Get A Personal Loan Of Rs 50000?

Are you falling short of funds to meet your current financial needs? A personal loan is the best solution for your immediate cash requirements. The funds can be used for any purpose be it travelling, medical emergency, education, wedding, home renovation etc. These loans are mostly unsecured and do not require you to provide any collateral. But to ensure the safety of the investments banks usually, go through the applicant’s credit report and check their score. They approve the loans of only those applicants whose CIBIL score is more than their set benchmark.
The eligibility criteria for personal loan varies from bank to bank, but in most cases, it includes your age, income, occupation and capacity to repay your loan. Whether you are a salaried individual or self-employed you must have a regular income source along with a good credit history in order to secure a loan. The loan tenure usually ranges between 1-5 years. The maximum loan amount that one is eligible for is based on the income; such that the EMI should not go beyond 50% of your monthly salary. Most banks also set a minimum loan amount that one can borrow. For most banks, this ranges between 1 lakh to 1.5 lakhs.
So it will be difficult to find a bank who offers a personal loan of Rs 50,000 or less. A good alternate option is to ask your friends and family to help you out. If you are in good terms with them, they would lend you such small amounts if they find your problem genuine. Such funds are usually interest free.
You can also contact small private lenders who offer loans of a lesser value. Private lenders are non-institutional lenders who lend money to others. Apart from the fact that you can approach them for smaller loan amounts, there are several other benefits of borrowing from them.
1.      With banks and financial institutions, you cannot dream of getting a loan without a credit report check. They have very strict lending practices. If your credit score doesn’t match the bank’s requirement, or if you do not have a past credit history your application will most likely be rejected. Private lenders do not have very stringent eligibility criteria. They usually do not base their decisions strictly on credit score. They consider many other factors for lending.
2.      Banks usually have a time consuming application process. With private lenders, you can be assured of quick disbursal of funds. When you are in need of funds in case of an emergency, contacting private lenders will be a quicker option. If you meet the requirements, you can get cash in a day.
3.      With private lenders, less paper work is required than the banks.
4.      There are usually no prepayment or processing charges.

But there is a flipside too.
1.      Private lenders often charge a high personal loan interest rate. There is no regulatory authority that monitors their activity. So they make their own rules. The rate of interest may be as high as 40% depending on the tenure. A personal loan from these lenders would turn out to be a costlier option than the banks.
2.      Direct lenders want a faster return on their investment. Hence the repayment tenure is not very long. They expect the money back within weeks or months. This results in higher monthly payments.
3.      High personal loan interest rates usually make it difficult for the borrower to repay the amount as agreed. Failure to repay the amount within the agreed tenure, may result in taking over of your property or other valuable belongings like jewellery; even unethically.
4.      Many illegal lenders create forged documents to transfer the borrower’s property in their own name when they fail to repay the amount.


Hence though private lenders can be approached for smaller loan amounts one must exercise caution while dealing with them. One must carefully consider the risks associated with borrowing from these lenders before proceeding. One must deal only with licenced lenders and borrow money from them only if one is sure of one’s ability to repay the amount back.

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