When Should I Consider Taking a Personal Loan?

Financial woe scan arise at any time. You may need funds to pay for educational expenses for your children or a wedding in the house. There could also be unexpected medical bills to deal with.

Availing a Personal Loan as an additional back-up is something you could consider if you find yourself in a tough spot. Some people take Personal Loans to consolidate their credit card debt. You too can do this and pay off your existing credit card outstanding amount. Union Credit Fin has products which offer Personal Loans for home renovation as well as consumer durables like a television or a refrigerator - the possibilities are endless.

A decade or so ago, taking a Personal Loans was not common. Now, with rising incomes and increased competition among banks to improve their credit portfolios, Personal Loans have become more accessible to get. There are various advantages of taking Personal Loans. Banks these days offer attractive interest rates as well as the flexibility of repayment.

Union Credit Fin(ucfin.in) can help you decide on a Personal Loan with options from over 70+ banks and NBFCs (Non-Banking Financial Companies).

Advantages of a Personal Loan

No Collateral - This is the most significant advantage of taking a Personal Loan. It is the most convenient option from the customer's point of view. You do not need to mortgage an asset for taking a Personal Loan.

No end use requirement -You can avail a Personal Loan for any purpose. There is no compulsion on borrower's part to disclose the use of funds. However, banks do take a declaration that you will not use the loan for speculative purposes. - These loans are available with out any security. If you satisfy the eligibility criteria, you get a Personal Loan approval in a short period. Certain banks give online approvals too.

Quick processing - These loans are available with out any security. If you satisfy the eligibility criteria, you get a Personal Loan approval in a short period. Certain banks give online approvals too.

Fixed Rate of Interest - Banks decide the rate of interest on personal financing at the time of processing the loan application. It remains fixed throughout its tenure. Hence, you need not worry about variable EMIs (Equated Monthly Instalments) or interest rate fluctuations.

Repayment flexibility -The average repayment period of a Personal Loan ranges from 36 months to 84 months. The more extended the loan repayment period, the lower the EMI. Individual financial institutions allow you to repay the interest amount alone every month with the arrangement of paying a pre-determined amount towards the principal repayment at the end of the year.

Tax benefits -If you avail a Personal Loan for renovating your home, you are eligible for Income Tax deductions up to ₹2 Lakhs under Section 24B of the Income Tax Act, 1961. However, you will have to prove that you used the loan for home renovation only.

Why Apply for a Personal Loan with Union Credit Fin (ucfin.in)?

Each bank has its individual Personal Loan scheme with varying rates of interest and repayment periods. They also have different methods of reviewing loan eligibility. It can all be very confusing, and Union Credit Fin can help you through the entire process. Applying for a Personal Loan with Union Credit Fin is an advantage because we do the hard work for you. We will collate the information on a single screen where you can compare the different products.

We provide the requisite information and guidance in the following manner.

• Help you in determining eligibility depending on your income and repayment capacity
• Compare different products on offer and help choose the most appropriate product for you
• Highlight the processing fee of different banks thereby helping you to select the Personal Loan that offers the most significant benefit
• Ease of documentation witha quick turnaround time
• Since we host several products from various Banks and NBFCs, you are not restricted and have several options.
• Union Credit Fin (ucfin.in) has Experts who can:

• Assess your profile and determine your eligibility
• Analyse your repayment history and advise you accordingly
• Decipher the fine print, especially in the case of seemingly attractive offers

How Can I apply for a Personal Loan through Union Credit Fin?

Applying for a Personal Loan through Union Credit Fin (ucfin.in) is very easy. All you have to do is provide the following information:

• Indicate whether you are a salaried person or self-employed
• Your name and email address
• Choose your residential city from the options given
• Enter the details of your current employer
• Provide information about your income
• Indicate the loan amount required
• Enter the mobile number whereby you allow Union Credit Fin to contact you and advise you about its products and services
• Union Credit Fin will give you the best offers based on the information you have submitted.
• It will enable you to choose the best option. Once you have made a choice, you can proceed with filling up the application form and provide the necessary documents for appraisal. Our team will help you withthe process and lodgeyour application with the lender. Our services are at no cost to you.
• Verifying the information provided by you is the lenders' responsibility. They may also require extra documentation in some cases.
• Once the loan is approved, you will have to accept the terms and conditions and proceed to sign the loan agreement.
• Union Credit Fin's Personal Loan experts will help you in the disbursement of the loan. We are always available to clarify any issues that you have.

Features of a Personal Loan:

The rate of Interest - The rate of interest on Personal Loans is between 11-14% depending on your credit score, income and so forth.

The lender will verify all your documents. The next step is the valuation and legal scrutiny. Banks have their panel of evaluators and advocates to do this for them.

Loan amount - You can get a Personal Loan for as low as ₹50,000 and as high as ₹50 Lakhs depending on your requirement and eligibility.

Loan Tenure - Festival loans are available for periods as short as 12 months. The average tenure for a Personal Loan is between 12 and 60 months,depending on the loan amount.

Security - Due to its unsecured nature, collateral is not required

Loan Turnaround Times - A Personal Loan typically has the fastest turnaround time in the industry. Many banks approve Personal Loans with in 48 hours after submission of the online application.

Processing Fees - It depends on the individual bank. Itusually ranges between 1- 2% of the loan amount.

Pre-payment Penalty - Banks charge pre-payment penalty if you repay your Personal Loan before the determined period. The charges range between 1-2% of the outstanding amount on the date of closure.

Factors Affecting the Eligibility of a Personal Loan:

Credit Score - This is the most crucial eligibility factor. A credit score of 650 or above is typically considered good score. The better your credit score, the higher are your chances of getting a Personal Loan.

Employment Employees of listed companies, Central and State Governments, and public sector undertakings are eligible for a higher amount.

Work Continuity - You should be a long-term employee of your current organisation. In case you are self-employed, the continuity of business and income is the most critical

Age of the borrower - The minimum age requirement is 21 years. Banks have their criteria for deciding the maximum age limit. In most cases, your age at the end of the repayment period should not exceed 70 years.

Who is eligible to apply - Salaried persons, self-employed professionals, and self-employed persons are eligible to apply for a Personal Loan.

Eligibility amount - It depends on the bank sanctioning the Personal Loan. Various factors like gross income, take-home pay, other loan instalments, and Credit Card liabilities determine your eligibility. You can use Union Credit Fin's easy Personal Loan EMI Calculator and determine eligibility.

Documents Required for Availing a Personal Loan:

1. KYC - Documents for determining identity, age, and residence proof are needed when applying for a Personal Loan. These documents are:

• PAN Card
• Aadhar Card
• Driving Licence
• Voter ID
• Passport
• Registered Rent Agreement

2. Income Documents - In case you are a salaried employee, you need to furnish the following documents:

• Salary slips for the last 6 months
• IT Return along with Form 16 for the past two years
• Bank Account Statement of previous 3 months that reflects your salary credits and other income
• Employment certificate from current employer
• In case you are self-employed (professional or business owner), the following documents will suffice:
• Financial statements that include Balance Sheet and Profit and Loss Statement
• IT Returns for the last 2 years
• Proof of continuity of business income such as Bank Account Statement
• Evidence of doing business like GST Registration

3. Other Documents- This includes your loan application form

Banks that Provide Personal Loans Include:

ICICI Bank

HDFC Bank

Standard Chartered Bank

Yes Bank

Kotak Mahindra Bank

Citibank

NBFCs that Provide Personal Loans Include:

Capital First

Bajaj Finserv

Tata Capital

Personal Loan Eligibility Tips:

It is likely that you receive hundreds of calls, texts and e-mails regarding Personal Loans.

Union Credit Fin can help choose the best loan offer for you as we have a structured process that will guide you through every step.

Union Credit Fin can help you avoid common mistakes when applying for a Personal Loan:

Interest Rates - People look at the rate of interest offered by lending banks and tend to ignore other charges like processing fees, pre-payment clauses, and late payment fees. Union Credit Fin guides you through each aspect while helping you choose the most appropriate Personal Loan Offer.

Applying for a higher amount than necessary - Some people tend to apply for higher amounts than they require as the eligibility criteria are quite generous. Union Credit Fin helps you arrive at the optimum figure. We account for the current as well as contingent liabilities while helping you decide on the loan amount.

Do I Need a Co-Applicant for a Personal Loan?

It is not compulsory for you to have a co-applicant for a Personal Loan. If you are looking for a higher amount, a co-applicant such as your spouse can be useful. You will need to provide the income details of the spouse as well.

Points to Ponder Before Taking a Personal Loan

Personal Loans are easy to get. They are the best options to fight off financial crunches. You need not provide any collateral or guarantee. A decent disposable income and a good credit record are enough for banks to approve your Personal Loans. However, you should consider these essential points before deciding to avail a Personal Loan.

Shop around for the best offer Shop around for the best offer - A Personal Loan is one of the most conventional loan products available. However, the interest rate and other charges vary a lot from one bank to another. It is advisable to shop around and check out the offers before applying for a personal loan. Union Credit Fin is one place where you can get access to a variety of personal loan products from different banks. You can compare these products on a single screen and decide on the best option.

Check out the EMIs - Personal Loans have bigger EMIs than other loans because of their short tenure and comparatively higher rates of interest. Therefore, it is better to use our EMI calculator and check out your EMI. Usually, banks insist on take-home pay of around 50% after catering to all your liabilities including the EMI of the proposed Personal Loan. The thumb rule is that your EMI should not exceed 10% of your income. It will keep your EMI affordable and allow you to repay your loans quickly, thus improving your credit score.

A shorter tenure is preferable - Personal Loans are available for tenures lasting up to 60 months. It is better if you keep your tenure shorter than that. The ideal tenure is 36 months. Nevertheless, you should also check out the EMI affordability. You should be able to afford the EMI. Maintain the right balance between the loan amount, your EMI, and the tenure of your Personal

Read the fine print carefully - Make it a point to read your loan document carefully. There are many hidden charges such as late fee penalty, cheque bounce charges, pre-payment penalties, lock-in period, and so on. Consult your financial advisor before you sign on the dotted line. Some banks charge interest on reducing balance method whereas some banks follow the straight-line Understand the difference between the two. Use our EMI calculator to estimate the total outflow.

Opt for Loan Insurance - Loan insurance has become a favourite product today. It will be the biggest favour you do to your legal heirs. You do not leave behind any loan liability in case of any untoward incidents. Many banks include the loan insurance premium in the loan amount. As you repay the loan in instalments, you do not feel the pinch.

Consider these points before you apply for your Personal Loan. Remember, there are hundreds of options open to you, but not all of them are beneficial.

Avail the guidance of the experts at Union Credit Fin to help you make a decision.