I’ve been thinking about taking a personal loan for some urgent expenses, but I’m a bit confused about how the whole process works. From application to repayment how does a personal loan function in India?
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Personal Loan is a unsecured loan which means that it does not require collateral or security. You can use this fund any way you want, unlike car loan or home loan.
A personal loan works like most other types of loans. You apply by filling out a form and submitting the required documents. The lender then checks your credit score and overall financial profile to decide if you’re eligible. If you’re approved, they’ll make you a loan offer.
Once you accept the offer, the loan amount is directly credited to your bank account. You’re free to use the money for almost anything like medical bills, travel, education, or even debt consolidation.
You’ll need to repay the loan through monthly EMIs (Equated Monthly Instalments). The EMI amount depends on how much you borrow, the interest rate offered, and the repayment period you choose.