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Personal Loans Buying Guide

I. How to Buy in 7 Easy Steps

1. You need to determine the amount that you need to borrow through a personal loan in India. You should use this loan only as a last resort after you have utilized your other sources of money.
2. Choose the kind of personal loan you want – unsecured , or loan against securities, loan against gold etc.
3. Find the best deal on personal loan right here at iTrust  and shortlist the best 3 providers
4. Visit the branches of these 3 providers or call reputed DSAs of these providers and read the fine print of the terms.
5. Decide on the provider based on the loan amount that they are willing to sanction you as well as the charges and interest rate.
6. Provide the required papers for approval of loan
7. Post approval, take disbursement by cheque into your account.

II. Who can buy ?

Personal Loans are provided  only to resident individuals. Further criteria to decide eligibility are detailed below:  

1. Age – Minimum age of 25  and maximum age of 65. Used to judge whether the person would be working and earning during the duration of the loan
2. Minimum Salary Requirements- Used to estimate capacity of a person to repay
3. Years in current profession/job – Check stability of a person in his profession and earnings
4. Years in Current Residence- Stability and intention of the person to stay in the same city

Please note that IT Professionals or the people in similar professions who travel abroad very frequently can also get personal loans but they may be required to furnish a guarantor for the same.

III. Buyer’s Checklist

The banks need to verify three major criteria before sanctioning you a loan

Who you are - your identity and where you live- your address

How old are you – your age

Whether you can repay the loan that you have availed –  your income

The following documents can be used  as proofs for the same:

Identity Proof (You can provide anyone of the following)

• Passport (Can also be used as proof of address)
• Defence Identity card
• Driving License
• Government identity card
• Photo PAN card
• Voter's identity card
• Ration card with photograph
• You will also need passport size photographs to complete the identification  requirements.

Address Proof (You can provide anyone of the following)

• Passport (Can also be used as proof of identity)
• Telephone (land/mobile) bill
• Driving licence
• Voter's identity card
• Ration card
• Electricity bill
• Society outgoing bill
• Life Insurance Premium receipt 
• Proof of Office for Self Employed (any one) Lease deed / Utility bill / Municipal Tax receipt / title deed

Age Proof

• Secondary School Leaving Certificate (Class 10)
• Photo Ration Card
• Voters Identity Card
• LIC Policy or Premium receipt clearly indicating the applicant's age
• Pension Payment Order
• Birth Certificate issued by the competent authority
• Passport / Defence ID Card / Govt ID Card (Provided they have the cardholder's photo,signature and date of birth)

Income Documents

• Salaried Individuals
• Latest salary slip showing statutory deductions
• Proof of continuity of employment - Form 16 (Declaration from employer giving details of income and deductions) or appointment letter
• Latest acknowledged IT return
• Bank statements for the last 3 months

Self Employed Individuals

• Computation of income for the last 2 years certified by a C.A. OR
• P&L and balance sheet for the last 2 years certified by a C.A. AND
• Copies of acknowledged IT returns for the last 2 years AND
• Bank statements for the last 6 months

IV Questions You Must Ask – before availing  a personal loan.

Is a personal loan the right option ?

Personal loans in India are expensive. Therefore, only consider this loan as the last option. Other loans to consider are taking a loan from friends or relatives, or a loan against deposits or ecurities.
 

Am I taking the loan for the right tenure?

Match the tenure to your requirement – do not end up making extra repayment commitments that might effect your daily expenses. The earlier might not necessarily be better.

Am I taking advantage of all the discounts/benefits that I am eligible for ?

Many lenders such as banks/NBFCs offer discounts to various groups. Such as:
Relationship discount to existing customers
Women's discount in case of many PSU banks

Does the repayment schedule reflect my needs ?

Based on your need you can choose to take step up EMIs (making larger payments later) or step down EMIs (making larger payments upfront). There are further personal loan  repayment options available depending on the bank or NBFC in question.

V. How to Compare Products – How to Select the Best Product for Yourself

The primary comparison parameters are :

• Amount of loan being sanctioned
• Personal loan interest rate
  
• Other charges levied by the lender

Using  these parameters you can calculate the overall cost of the loan being charged to you. You can use iTrust to get the best deal on personal loan from the leading lenders in India 

VI. Now That You Own the Product

Avoid default at all costs !
With the  credit history being shared across banks– it will become increasingly difficult for you raise another loan.
Ensure that you make the repayments on time.
Delayed payments or non payments attracts very strong penalties taking up the cost of the loan.

VII. Know Your Rights as a Consumer- understand the fine print.

In case, you feel that the bank/NBFC has been levying charges without telling you.
In case your loan provider is a bank, you can report this to the Banking Ombudsman of your state as appointed by the Reserve Bank of India.
The following link gives you the names and addresses of the Banking Ombudsman across India:
http://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=164

In case your loan provider is a NBFC (Non Banking Finance Company), you can report this to the Department of Non Banking Supervision at the local Reserve Bank of India office.