What are the important documents you will need while applying for a loan?
Along with your personal loan application form, you will have to provide some more documents which will include the following:
- The proof of your income
- Your address proof documents
- Your proof of identity documents
- The certified copies of license or a degree
Here are a few terms involved in the loan system:
- Part-payment: This is regarded as the amount which is less than the full loan principal amount is mostly done before the due of the loan amount.
- Prepayment : This prepayment amount may not necessarily be equal to the amount which is due. Prepayment is when you pay your loan in a part before it gets due according to the EMI system.
- Pre-closure payment: This is when you completely pay off your personal loan before the loan tenure has ended.
Mentioned below are a few benefits of personal loans:
- No end use limitations: the personal loan can be used for any purpose at all, there are no hard rules for its use. Personal loans seem to be the easiest way to get cash when you are in need of it.
- There is fast and easy disbursal: if you fulfill the criteria that are required and your credit score is good too, then you can even avail your personal loan in the time period of 72 hours. Some of the banks also provide the online facility of approval of personal loans.
- Collateral is not needed: it is an unsecured loan it is very easy to get it and there is no need for any collateral.
- The benefit of the tax: you can avail the tax deduction if you are using the personal loan money for the renovation of the house, or for the construction. But you will also have to provide the necessary documents which will prove that you are using that money for the mentioned purpose itself.
- Fixed interest rate: personal is made available based on a fixed interest that will remain consistent for the entire loan tenure and there is no need to worry that the rate of interest will change.
- You can choose the tenure: the loan tenure will go up to 7 years and hence you can choose which tenure will be suitable for you. The longer the tenure the lower will be the EMI and vice versa.
- Helps in boosting your credit score: the types of accounts that you have used, this helps in counting towards your credit score.
What is the benefit of a personal loan over a credit card loan?
In a credit card loan, you will be able to avail it on your card but this loan will be applicable only on certain cards and if you want a loan on it you will have to approach the card issuer but while considering a personal loan any lender of your choice can be approached to.