That is why it is called an emergency loan. Personal loan is a collateral free loan, but the bank charges you a lot of interest for it. Suppose if a person dies after taking a loan from the bank, then who will be responsible for paying the outstanding loan amount? Know here what is the bank’s rule regarding this.

These are the rules for personal loan

Personal loan is an unsecured loan. This loan is given to the person after looking at the parameters of his income etc. In such a situation, the responsibility of repaying the personal loan also lies only with the person who takes the loan. If the person taking the personal loan dies, then the bank cannot harass any other member of the family to recover the dues. Neither can the successor or legal heir be asked for this. In the case of personal loan, after the death of the borrower, this loan is written off, that is, with the death of the person, his loan also ends.

What are the rules regarding home loan

In case of personal loan, the loan of the borrower ends with death, but this is not the case with home loan. In lieu of home loan, you have to mortgage the papers of your house or the papers of any property equal to the value of that loan. In such a situation, when the loan taker dies, the co-applicant is asked to pay the outstanding loan amount, who is usually a family member or the heir of that person is responsible for repaying the loan.

If he expresses his inability to do so, he is given the option to sell his property and pay off the loan amount. If the family does not do so, the bank auctions the mortgaged property and recovers the outstanding amount. To deal with this situation, home loan insurance is offered these days. In such a situation, if the loan taker dies, the bank recovers the outstanding loan amount from the insurance company and the house remains safe with the family.

This is the rule in case of credit card

The credit limit is also determined on the basis of the applicant’s income, credit score, existing loan and repayment history etc. In such a situation, the credit card holder is also responsible for repaying the amount spent through the credit card. But if the credit card user dies before returning the amount, then the bank writes off the outstanding amount of the loan.

But this does not happen in the case of secured cards. To get a secured credit card, FD has to be deposited as collateral. The limit of the secured credit card is decided according to the amount of the FD. If the secured credit card user dies, the bank has the right to recover the loan by encashing the fixed deposit.

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If you are also pre-paying a personal loan, then first of all you should know that you may have to pay some charges for this.

What are the loan prepayment charges

When a person repays the loan before the loan period, it is called prepayment, on which a penalty is levied by the bank’s financial institution. This charge is called prepayment penalty. In this, a part of the loan or the entire loan is paid.

Why is prepayment charge levied?

This penalty is charged by financial institutions to compensate for the interest that they would have earned during the loan tenure. That is, to cover the loss of income, lenders levy a prepayment charge when the entire or part of the loan is paid in advance.

How much prepayment penalty is charged

Usually, the prepayment penalty can be between 1 to 5 percent of the outstanding loan amount. However, different financial institutions may have different rules for this.

Get this information in advance

When you apply for a personal loan, you should get all the information about the terms and conditions of the prepayment charges at the time itself. So that if you ever want to prepay the loan later, you will be aware of the interest rates.

Benefits of Personal Loan Prepayment

Personal loan prepayment can prove to be a strategic decision for borrowers. It reduces the financial burden and also improves your credit score.

There is a plan to eliminate prepayment charges

RBI is considering eliminating prepayment fees and closure fees on floating rate loans to MSME borrowers. So that lenders can be given relief. RBI has sought opinion from stakeholders on this matter by March 21, 2025.

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Anyone can need money at any time. Many times people do not have savings or emergency funds. In such a situation, people take a personal loan from the bank to arrange for money. Taking a personal loan from the bank can be the best option in an emergency situation, but there are many people who take a personal loan from the bank to fulfill their small needs. Let us tell you that the interest rates of personal loans are very high. In such a situation, personal loan should be taken from the bank only for important works.

You can take a personal loan from the bank in any emergency. The process of taking a personal loan is also quite simple. If your CIBIL score is good, then you can get a personal loan from the bank even at a low interest rate. Today we will tell you for which purposes you should not take a personal loan from the bank.

Do not take personal loan for these purposes

Many people take personal loans to buy property but one should never take personal loans to buy property. Apart from this, one should never take personal loans to fulfill one’s hobbies like expensive phones, travelling or to buy any luxury items. One

should also never take personal loans to pay credit card bills. The EMI of this loan is very high. In such a situation, failing to pay it can spoil your CIBIL score.

Never take a personal loan even to repay a loan. By doing this, you can get trapped in a debt trap and it will be very difficult for you to get out of it.

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Sometimes situations arise in life when money is suddenly needed, such as a health emergency or money for education. At such times, it becomes necessary to manage money.

To get a loan from a bank, we often have to follow various documents and rules. If you are also in such a situation, then there is nothing to worry about now. You will be happy to know that you can get a personal loan of up to Rs 2 lakh using your Aadhaar card. To get this loan, one can also take the help of banks and government schemes. Now getting a personal loan has become easy with the help of Aadhaar card.

Aadhaar card has become an important document for Indian citizens in today’s time. Now Aadhaar card is necessary for every work, be it opening a bank account, making a PAN card or for proof of address, Aadhaar card is used everywhere. Now Aadhaar card can be used not only as proof of identity and address but also for personal loans. If you need money in an emergency, then you can take a personal loan of up to Rs 2 lakh with the help of your Aadhaar card.

Advantages of taking a loan on Aadhaar card

Simple documents: Aadhaar card loans are different from normal loans as they do not require much documentation. Like proof of income, proof of address and proof of identity, only Aadhaar card is used instead. Aadhaar card verifies both identity and address, which reduces paperwork.

Digital Process: These loans are available online and the entire process is digital. This ensures faster approval and eliminates manual work, thus the loan amount is disbursed to the account quickly.

Faster process : These loans get approved quickly due to the digital application process. This saves you time and you can get the money easily.

Who can take a loan?

Age: To apply for this, your age should be between 21 and 60 years. He should be a citizen of India.

Credit Score : If your credit score is 650-700 or above, it becomes easier to get a loan and you can get lower interest rates.

Valid Aadhaar Card: Aadhaar card should be active and linked to the applicant’s mobile number for verification.

Employment status: You must be a salaried employee or self-employed person.

How to Apply

Apply Online: To apply for a loan, visit the lender’s (bank or NBFC company) website or download their mobile app.

Check eligibility: Check the eligibility criteria for the loan. You can check your eligibility using the lender’s calculator.

Upload Documents: Upload your Aadhaar card, PAN card and income proof for verification. To enable OTP based verification, make sure your Aadhaar card is linked to the mobile number.

Approval and Fund Transfer : The loan is approved after submitting the documents. Disbursement of the amount will usually be credited to your account within 24 to 48 hours.

Keep these things in mind before taking a loan:

Take a reliable bank loan only from a reliable bank or NBFC.

Interest rates: Personal loans are given without any collateral, so their interest rates depend on your credit score, income, credit history, and other factors. Before taking out a loan, compare interest rates from different lenders.

Processing Fees: Know about processing fees and other charges in advance to avoid any unexpected expenses at the last minute.

Manage EMIs: Understand your repayment capacity and ensure you are able to pay your EMIs on time.

Impact on credit score : Paying off your loan on time can improve your credit score, while defaulting or not paying can damage your credit standing. Therefore, take out a loan only when it is truly necessary.

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Personal loan is a loan in which you do not have to pledge anything. You can use it for medical expenses, rent or other needs. It is possible to get a loan even without income with the help of a guarantor or part-time job. However, it is important to understand all the terms and conditions and advantages and disadvantages before taking a loan. If planned properly, it helps in managing your expenses.

How can students avail a loan?

Even if you do not have any income, you can still take a loan. For this you will need a guarantor, like your parents or siblings who are working. The guarantor is the person who is responsible for the loan and if there is any problem in repaying the loan, he will make the payment. Apart from this, if you are earning money from part-time job, freelancing or any other work, then getting a loan can be a little easier.

How to get a loan without income?

If you do not have a stable income, you can still take a loan, but for this your parents or siblings will have to become guarantors. Apart from this, if you are earning a little through freelancing or part-time work, you can still apply for a loan. In this situation, the chances of getting a loan increase.

Personal loan and education loan are different and their uses are also different. You can take a personal loan for any expense, such as house rent, medical bills or any other expense. On the other hand, education loan is only for expenses related to studies, such as tuition fees, books and other expenses related to the course.

Documents required for loan

Some important documents are required for the loan. Aadhar card, PAN card, voter ID or passport is required for identification. Aadhar card, PAN card or electricity bill can be given as address proof. Bank statement of the guarantor is also required as income proof.

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Bad impact on credit score

If you do not pay your personal loan on time, the first impact is on your credit score. Your credit score gets spoiled, which can make it difficult to get a new loan in the future. You become an unreliable customer for banks and other financial institutions.

legal action might be taken

• In case of default in repaying the loan, the bank or financial institution can take legal action.
• Banks can go to the civil court and file a case against you and demand to seize your property or stop your salary.
• If the bank feels that you have committed fraud intentionally, a case can be registered under Section 420 of the Indian Penal Code. This also includes a jail sentence.

Dealing with recovery agencies

When banks are unable to recover your dues, they take the help of recovery agencies. These agencies try to recover money from you through phone calls and visits. Many times, the customer has to face mental stress and anxiety due to their behavior.

What do RBI rules say?

• The Reserve Bank of India has laid down some strict guidelines for recovery of personal loans:
• It is necessary for banks to give notice to the loan defaulter first.
• The customer must be treated with respect during recovery.
• Banks will have to take special care to avoid harassment by recovery agencies.

What to do if you are unable to repay the loan?

• If you are not able to repay the loan then talk to the bank.
• Negotiate repayment plan: You can ask the bank for new payment options or changes in EMIs.
• Settlement option: A lump sum payment can be arranged by talking to the bank.

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People often take personal loans for their minor needs. This is a loan that does not require any kind of collateral or security. This loan is given to a person on his credit. It requires minimum documents. This loan can be used for any financial need. Like any other loan, a personal loan has to be repaid as per the agreed terms.

Personal loans are repaid in monthly installments (EMIs). Through auto debit mandate, the monthly installment can be instructed to be directly debited. If there is an alternative bank account, this can be done through NACH mandate. Generally, EMI can be made for a few months or a few years.

Charges may apply for foreclosure

Some banks allow you to prepay or foreclose your personal loan after payment of at least one EMI. However, charges (and taxes) are applicable for foreclosure of a personal loan. Banks take many things into consideration while calculating interest rates on personal loans. It generally depends on the credit history of the person taking the loan. The better the credit history, the more chances there are to get loans at attractive rates. Here we are telling you about the interest rates on personal loans of 10 banks. This will help you make comparisons before taking a personal loan.

Personal Loan Rates and Charges (March 2024)

EMI is an important part of the loan. This is the intermittent installment amount that you pay to repay your loan. There are three factors that decide your EMI. These include loan amount, interest rate and loan tenure.

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People often take personal loans for their minor needs. This is a loan that does not require any kind of collateral or security. This loan is given to a person on his credit. It requires minimum documents. This loan can be used for any financial need. Like any other loan, a personal loan has to be repaid as per the agreed terms.

Personal loans are repaid in monthly installments (EMIs). Through auto debit mandate, the monthly installment can be instructed to be directly debited. If there is an alternative bank account, this can be done through NACH mandate. Generally, EMI can be made for a few months or a few years.

Charges may apply for foreclosure

Some banks allow you to prepay or foreclose your personal loan after payment of at least one EMI. However, charges (and taxes) are applicable for foreclosure of a personal loan. Banks take many things into consideration while calculating interest rates on personal loans. It generally depends on the credit history of the person taking the loan. The better the credit history, the more chances there are to get loans at attractive rates. Here we are telling you about the interest rates on personal loans of 10 banks. This will help you make comparisons before taking a personal loan.

Personal Loan Rates and Charges (March 2024)

EMI is an important part of the loan. This is the intermittent installment amount that you pay to repay your loan. There are three factors that decide your EMI. These include loan amount, interest rate and loan tenure.

Credit Card Rules : Changes in credit card rules, you will benefit from RBI’s initiative.

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However, personal loans generally come with higher interest rates. Higher interest is because this loan is available immediately and one does not have to bother with many documents.

It is especially easy for salaried employees to get personal loans. The required documents usually include salary slip of last three months, bank details and identity proof like driving license or Aadhaar card.

Before taking a loan from a particular bank or institution, you should explore other options for your needs. Generally, lenders offer loans at lower interest rates to borrowers with higher credit scores, while borrowers with lower scores have to take loans at higher rates.

Check, which bank is giving loan at what interest rate?

-HDFC Bank

10.75% to 24%

-ICICI Bank

10.65% to 16.00%

-SBI

11.15% to 11.90%

-Kotak Mahindra

10.99%

-axis Bank

10.65% to 22%

-IndusInd Bank

10.25% to 26%

-Bank of Baroda

11.40% to 18.75%

-Punjab National Bank

11.40% to 12.75%

-Union Bank of India

11.35% to 15.45%

-IDBI Bank

10.50% to 13.25%

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The Reserve Bank on Thursday tightened personal loan rules for banks and non-banking financial companies (NBFCs). According to the revised criteria, the risk weights of financial institutions have been increased by 25 percentage points. It is believed that due to this move of the Central Bank, taking a personal loan may become expensive in the future.

This change will not apply to certain consumer loans including housing, education and vehicle loans. Apart from this, these rules will also not apply to loans secured by gold and gold jewellery. These loans will continue to have 100 percent risk weight. Higher risk weight means banks have to set aside more money as a buffer when it comes to unsecured personal loans. In simple terms, a high risk load restricts the lending capacity of banks.

RBI Governor advised banks and NBFCs to reduce risks

Recently RBI Governor Shaktikanta Das had flagged the high growth in certain components of consumer credit and asked banks and non-banking financial companies (NBFCs) to strengthen their internal monitoring mechanisms, mitigate risks and take appropriate safeguards in their own interest. Advice was given to establish the solution.

The RBI Governor also underlined the high growth seen in consumer credit and the increasing dependence of NBFCs on bank lending during his interactions with MDs/CEOs of major banks and large NBFCs in July and August. The Reserve Bank said in a circular, ‘After review, it has been decided to increase the risk weight by 25 per cent to 125 per cent in respect of consumer loans of commercial banks (outstanding and new) including personal loans but housing loans, education loans, This change will not be applicable to vehicle loans and loans secured by gold and gold jewellery.

The central bank has increased the risk weight on credit receipts for banks and NBFCs by 25 percentage points to 150 per cent and 125 per cent respectively. Fears are being expressed that due to this move of the Central Bank, personal loans of banks and NBFCs may become more expensive.

RBI bulletin said – Inflation has come down but the challenge is not over yet.
The Reserve Bank of India’s bulletin on Thursday said that retail inflation has moderated due to monetary policy steps and supply-side interventions, but the challenges are not over yet and we have miles to go. An article on the state of the economy in the November Bulletin also said the global economy is showing signs of slowing in the current quarter as manufacturing slows, while services sector activity has reached the end of its post-pandemic expansion .

The report said that tightening of financial conditions is a significant risk to the global outlook in the coming period. “The pace of change in GDP in India is expected to be higher on a quarterly basis in Q3:2023-24,” said the article written by a team led by RBI Deputy Governor Michael Debabrata Patra.

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If you are also planning to take a personal loan or credit in the coming time, then this task can be a bit difficult. Yes, sources claim that the Reserve Bank of India (RBI) has asked banks to further tighten the background checks of customers before issuing unsecured retail loans and credit cards. In unsecured loans, nothing is pledged with the banks. This is the reason that their interest rate is higher than other loans.

Credit card and personal loan trend increased rapidly

RBI has warned the banks seeing the increasing risk of sinking of such loans. The Reserve Bank can also curb the unsecured portfolio amidst the increasing risk of default. After the Kovid epidemic, the trend of credit cards and personal loans has increased rapidly. According to statistics, in the year 2022, the number of personal loan borrowers has increased from 7.8 crore to 9.9 crore. Similarly, the number of people taking loans from credit cards also increased by 28 percent to Rs 1.7 lakh crore. Earlier it was 1.3 lakh crores.

Personal loan increased to 40 lakh crore

in the year 2023 also the speed of unsecured loan is increasing rapidly. According to the data released by RBI, as compared to February 2022, personal loans increased from 33 lakh crore to 40 lakh crore in February 2023. That is, an increase of 20.4% was seen in it. RBI believes that unsecured credit growth is a matter of concern amid inflation and rising interest rates.

This is the reason why the Reserve Bank has asked to be strict on unsecured loans in view of the possibility of a possible default. Apart from this, some changes have been made from the side of the banks. Sources say that RBI may increase the risk weight in unsecured loans.

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Now taking a loan from the bank will become expensive. The new rates of the bank have come into effect from February 15, 2023. Explain that after increasing the repo rate, many banks have increased MCLR.

Most consumer loans are based on a one-year marginal cost based lending rate. In such a situation, personal loan, auto and home loan can become expensive due to increase in MCLR. Now you will have to pay more EMI than before on taking the loan. This will have a direct impact on the pockets of the customers.

New MCLR rates

SBI has increased the overnight MCLR rate to 7.95 percent, MCLR rate for 1 month to 8.10 percent and MCLR rate for 3 months to 8.10 percent. At the same time, the bank’s MCLR rate increased by 10 basis points to 8.40 percent for 6 months, MCLR from 8.40 percent to 8.50 percent for 1 year, MCLR from 8.50 percent to 8.60 percent for 2 years and MCLR from 8.60 percent to 8.70 percent for 3 years. Is.

What is MCLR?

Significantly, MCLR is a method developed by the Reserve Bank of India, on the basis of which banks determine the interest rate for loans. Before that, all the banks used to fix the interest rate for the customers on the basis of base rate only.

Increase in repo rate for the sixth time in a row

Let us tell you that on February 8, RBI has once again increased the repo rate by 25 basis points. This is the increase in the repo rate for the sixth consecutive time. After the monetary policy meeting, Reserve Bank Governor Shaktikanta Das said that the pressure of rising inflation in the world is also on India and to overcome it completely, it has become necessary to increase the interest rates of loans once again. However, this time the repo rate is being increased by only 0.25 percent.

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There is about three weeks left for the budget for the financial year 2023-24. The discussion about the budget is happening everywhere. At the same time, people getting salary due to inflation and increase in interest rates also have high expectations from this budget, which includes capital gains tax, increase in exemption limit for home loan and many other types of relief.

Let us tell you, the budget is to be presented by Finance Minister Nirmala Sitharaman on February 1. This time’s budget is considered very important, because it is going to be the last full budget of the second term of the Modi government. For this, we have spoken to Rajendra Sabarwal, Tax Consultant in Mumbai. Let us know what the salary earners expect from the budget in this report.

Tax slab exemption

At present, the taxpayers in the country are given the option of two tax systems to pay income tax. This creates a lot of confusion among people. This time it is likely to end. Along with this, people are likely to get relief due to change in tax slab. At present, people earning up to Rs 2.50 lakh in a financial year have been kept under the ambit of income tax exemption. This time it is likely to be Rs 5 lakh.

Home buyers discount

This time, there is every possibility of increasing the interest rate from RBI, which can increase the scope of exemption for home buyers. Currently, taxpayers get income tax exemption on interest paid on home loans up to Rs 2 lakh. At the same time, filing of 80C is also expected to increase.

Personal loan discount

Personal loans and education loans account for 35 percent of the total loans in India. Education loan is exempt under Section 80E of the Income Tax Act, but there is no such provision for personal loan, which can be considered in this budget.

Uniform capital gains tax

There are many types of properties and according to them different tax rates are imposed by the government. In such a situation, many times people have to face difficulty in understanding this tax system. In this budget, one rate of capital gains tax or uniform capital gains tax can come.

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Just for this there are some necessary conditions like you should have an insurance policy of LIC and you should have income proof. If these documents remain with you, then you will have to approach the LIC branch after applying online. After this your application will be considered by the branch manager. If you also want to get this amount then you can follow these easy steps.

LIC will give personal loan

If you want to take a loan then you do not need to worry in the bank. Yes, LIC is now giving personal loan as well. You can apply for this loan from the comfort of your home. The specialty of this loan is that you will have to pay less interest on it. Only those people who have LIC policy can apply for this type of loan.

interest will have to be paid

If you want to take loan against LIC policy then you have to deposit interest. Let us tell you that on this you have to pay the lowest interest. The insurance company charges you interest at the rate of 9%. However, how much loan you will get depends on your income? LIC provides the facility of personal loan for 5 years.

How to get loan

If you want to take a loan from LIC’s plan, then you can comfortably go to the official website of LIC and get loan information from the comfort of your home and apply there. There you have to fill the online form and download it and sign on it and scan it and upload it on the LIC website. From here your loan process will start. You can easily get a loan up to Rs 20 lakh here.

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