Today we will see best personal loan available in India.
What is Personal Loan
As name suggest this is type of loan for personal needs. What that means is that it is generally used for any purpose as per individual needs. Home loan is for buying home, Car loan for cars but in case of personal loan, purpose can be anything.
One generally has fully liberty to spend money for any purpose he/she wishes for.
Generally personal loan is unsecured loan. What it means is their is no security or mortgage asked for loan amount.
To understand with example, when you go for Home loan, the house that you purchase is mortgaged against loan. So your house acts as security to loan provider. In case you default they can sell house and recover the loan. This is example of secured loan.
In case of personal loan, there is no such asset that is mortgaged. So it is Unsecured loan
As there is no security to loan provider, risk of default is highest in personal loan. That is the reason even rate of interest charged by lender or loan provider is also among the highest in different types of loans.
Processing Fees for Personal Loans
Banks or NBFCs generally charge around 1% of loan amount as processing fees but there is large variance from bank to bank. It can go up to 2.5% in some cases. You will generally need to pay pre-payment fees for early payment of loan.
Tenure of Personal Loan repayment
Generally personal loan is given for tenure up to 5 years and in rare cases may be 7 years.
Now let us look at best option available for taking personal loan
SBI Kavach Personal Loan
With interest rate of just 8.5% per annum, this is the best and cheapest personal loan available. This loan is for COVID 19 patients to support medical expense incurred on treatment of COVID.
So, in case you are going through financial crisis you can opt for SBI Kavach personal loan. You can use it for treatment of self as well as family members.
Repayment period is 5 years. With three months of moratorium provided, you can repay EMIs in 57 months.
Loan limit is from Rs. 25 Thousand to Rs. 5 Lac.
Only issue with this loan is though its personal loan, it can be availed only for COVID 19 treatment. You will need COVID positive report to avail the loan. Otherwise, there is no cheaper personal loan option available at the time of writing the article