Understanding Types and Documentation of Personal loans
Understanding Types and Documentation of Personal loans
Getting a loan in place like Mumbai has been simplified over time, much to the relief and convenience of the consumer. Additionally, the types of loans available in the market have diversified to cater to all classes of people, wide array of tastes, needs that are small and big.
Personal loans can be availed for a whole bunch of things including paying bills, taking a vacation, purchasing a vehicle and dealing with emergencies. The loan amounts sanctioned can vary from Rs10, 000/- to Rs20, 00,000/- depending on your income and ability to repay the lender. The personal loans a usually availed for short term and emergency purposes.
Types of personal loans:
Secure loans: Personal loans are structured in a way that the consumer can avail the loan without the rigmarole of providing any collateral. However, in certain cases, it becomes necessary to take the loan against the security of any asset that you own. Such a loan is called a Secure Loan. With this, you can enjoy the benefits of lower interest rates, flexible terms and conditions, easy and faster transactions as the risk on the lender's shoulder is reduced.
Unsecured loans: Usually personal loans do not call for a need to pledge any collateral though it creates a higher risk for the lender and hence asks for stricter terms and conditions, higher interest rates and less flexibility than secure loans. The bright side of an unsecured loan is that you will not be bothered with too many documentation and verifications.
Both loans are sanctioned fairly easily without the added costs or hidden charges, application commissions, processing fee, and so on. Selecting the type of personal loan that best suits your needs and situation is the best way to go about it.
Eligibility: The loan is sanctioned on the basis of many factors like loan amount requested, your salary, stability of your job, credit score card, any EMI that you are already paying to another or same lender, your age, and so on. These factors determine the loan amount to be sanctioned, your ability to clear the loan, and the tenure of the loan.
Documentation: These documents are required to process a personal loan:
Photocopy of identity proof (like passport, driving license, voter's ID card, ration card)
Photocopy of residence proof (like telephone bill, electricity bill, driving license, voter's ID, ration card, letter from employer confirming address)
Photocopy of age proof ( like birth certificate, Secondary school leaving Certificate, Passport, Voter's ID card)
Proof of income
For salaried individuals: Photocopies of latest salary slip showing deductions, IT returns, bank passbook of last 3 months form 16, appointment letter from employer, and so on.
For self-employed individuals: Photocopies of income computation statement for last 2 years, bank passbook of last 6 months, certified balance sheet of last 2 years, acknowledged IT returns of last 2 years.
Many banks and lenders have the provision of sending their representatives to your home to collect the documents verify them and clarify any doubts you may have. This eases the pressure off the consumers to travel in Mumbai traffic to the banks back and forth to have their loans processed.
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