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Frequently Asked Questions while taking Different type of loans

Whenever we are in need of any loan, we start looking for options. Few friends and neighbors also come with their suggestions. But still we always have doubts in our mind that leads to more research. Here at we have tried to answer to all your doubts.

Do I need a loan?

It is important to understand if you really need a loan at that particular moment. May be for those momentary expenses you can manage out of your savings. A loan allows you to borrow from the Bank/ NBFC and in return will be charging an extra amount as an interest. This will also come with a risk of unmanaged debt.

How much do I need to borrow?

It is always good to borrow only what you need. Though, it is misunderstood that borrowing a heavy amount will result in lower interest rate on repayments.

How long will it take to approve the loan?

As per the Banks/ NBFC’s it generally takes 7 – 10 working days. It completely depends on the completion of the documents also terms vary from one case to another.

How to apply for the loan?

Loan application can easily be done with the help of by just filling few details about yourself, where you can compare and apply online and can check your maximum loan eligibility from various banks and NBFC along with their loan offers suited to your needs.

Should I borrow from a nationalized bank or a private bank?

Funds can be borrowed either from Nationalized Bank or a Private Bank. We just have to check for our exact need of funds to be borrowed so that a borrower gets a best deal as both nationalized banks and private banks have different ways and methods to calculate the loan eligibility criteria’s.

What will be the cost of the loan?

Generally the Banks/ NBFC’s charge processing fees from the borrower for a certain percentage of loans negotiated between the Bank/NBFC and the borrower. Apart from this there can be optional cost of loan insurance. Also in a stamp duty is to be paid by the borrower according to the local state laws on the borrowed amount.

Will the search for the loan affect the credit record?

Though just searching and getting the rates information will definitely will not affect the credit score. But yes if you apply for a loan in different companies in a short period of time then it will definitely affect the credit score. (Know more About the Credit record)

What is the minimum credit score needed to be eligible for the loan?

The credit score depends on your past repayment track. The ideal credit score is 700 out of 900 to be eligible for the loan. But yes, by paying and extra percentage of interest can increase your chances to get a loan even with a lower credit score. (Credit Score A Complete Guide)

What is cheaper to borrow among different options available in the market?

This completely depends on the deal you get and handle the debt. This completely depends on an individual’s circumstances and need of funds. If you need funds for a shorter period then a personal loan can prove to be best fit for you.

Should I borrow from my bank?

Your bank will anytime be very happy to lend you if you have a good credit score. The only concern is the loan offered to you is a right deal for you or not? Searching around the market for the most favorable option, rate and read the terms and conditions before choosing a loan. is an online market please where you can compare and apply the best suited loans for you online at the convenience of a click of a mouse, along with the bundle of loan offers and product features from various financial institutions.

What are the early repayment options?

You can always repay your loan from the due date. The early payment, prepayment, foreclosure charges depends on the agreed terms between you and the borrower. (Know about the Repayment Modes)

Are rate of interest charged same for all loans by all the borrowers?

No, the rate of interest varies from one Bank/ NBFC to another. The rate of interest you get completely depends on your credit score, obligations or other debts and your income. Presently banks works on Marginal cost of fund base lending rates… To know more about interest rates please visit……

What are the other fees to be paid?

The fee to be paid depends on the product you choose. Your fees include monitoring cost, administrative cost, processing fee, legal fee, technical valuation fees, documentation fee, franking fee, cheque/ ECS dishonor fees, prepayment charges, document retrieval charges, charges for account statement, balance transfer/ resale home loan, appraisal/ property value, credit report, title search/ legal report and house insurance. However, these fees are quite negotiable depending on the agreed terms and the personal discussion with your loan officer.

Should I buy insurance for my loan?

Loan insurance is a form of payment that helps you in your monthly loan payments. Almost all secured and unsecured loans are covered under loan insurance. This helps the borrower’s family in case of the demise of the borrower. The insurance company settles the loan amount with the bank. (Know about Buying Loan Insurance)

What happens if payments get missed?

It is important to pay the EMI’s regularly and also on time. Missing EMI’s affects the repayment track record and hurt your credit score and you become a risky borrower for future. You are charged with late payment penalties and the healing time takes a long. (Know about the Consequences of Not Paying EMI on Time)

What is a secured and unsecured loan?

The term loan is known as secured when it involves collateral. The interest rates are lower as compared to unsecured loans. The interest rates and the loan tenor depend on your eligibility.

What is a debt consolidation loan?

Debt consolidation is a way to combine many of your loans into one and allows you to make a single payment for it. Its an easy way to get rid of too many debts. If done wisely, this can help you to get lower interest rates, lower EMI’s, protects the credit score and come out of your on a faster pace. (Know more About Debt Consolidation)

What are the eligibility criteria for a secured loan?

Not only have you had to be an Indian resident but also above 21 years of age. You must have a regular income of minimum 2.5 to 3 lacs. The income source from business has to be regular from last 3 years and generating profit. You must also possess an asset whose value is either equal or more than the required loan value.

What if I become unemployed?

Modification in loan terms, forbearance agreement and refinancing can be a good option in case of unemployment.

What loans can be used to buy a car or home renovation?

For buying a Car an Auto loan can be taken from a Bank/NBFC. Also a top up can be taken on the existing mortgage loan to buy a car which would help the borrower to reduce the EMI burden as the mortgage loans can be taken for a longer duration as compared to Auto Loans.

As far as Home Renovation is concerned a new mortgage loan or an older loan can be extended for the same. Home Extension loans can also be a good option for the same as it comes under home loan category and gives benefits of interest benefits.

What will be the loan tenor?

The loan tenor depends on the loan product, your age, credit score and income. The unsecured loans have a tenor period of 1 – 5 years and the tenor available for secured loan can be between 1 – 25 years.

What if my loan application gets rejected?

Firstly, find the reasons for the rejection and try to improvise them. You can also apply in a different Bank/ NBFC as all Banks/ NBFC’s have different policies or wait for another 6 months and then apply.

Am I still eligible for a loan if I have high credit card debt, a mortgage, a student loan and a car loan with high rate of interest?

It depends on the income level. If you are capable enough to handle all the debts then you are eligible to get another loan. Secondly, it also depends on the Bank/ NBFC policy if they are interested to fund you further.

How can I switch to another lender?

Balance transfer is a great option to switch. But before switching it’s better to first discuss with your current lender about the interest rates and other terms and conditions. Always compare the benefits of balance transfer with your expenses that will be charged from you.

What are the prepayment penalties?

The prepayment penalty is a clause mentioned in an agreement that states that penalty will be charged if the loan is prepaid within a certain time frame. The penalty is counted depending on the months and the balance amount.

What are the options if I already have a mortgage, a home loan or a loan against property and I need more funds?

A balance transfer or a top up on your existing loan can help you to get some extra funds.



Home Loan    Loan Against Property    balance-transfer    Business Loan    Personal Loan

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