Personal loan is a great product that helps one meet the requirements of a limited funds for a short duration. However, being an unsecured loan, the lending institutions are not very optimistic on extending loans to everyone and follow a stringent underwriting process to screen the requests. While income of an individual is key to repayment, the lenders give a large importance to this factor when it comes to personal loan. While the banks generally prefer those with high income band for granting personal loan, but it does not mean that this segment does not have any options. Following are the options and alternatives available for those in this income bracket.
There are a few lending institutions that do extend loans to people with income less than Rs. 25,000. HDFC, ICICI and Bajaj Finserve are those large private institutions that have options for low income group. Other than these a host of nationalized and co-operative banks also have options available for this income group.
However, the following points will need to be considered:
P2P : Peer to peer lending has taken the world by storm. While in India it is still at a nascent stage, but can be a good option for those with income less than 25,000. The P2P platform facilitates various individuals to lend a portion of the requested loan amount. So, there could be multiple lenders agreeing to fulfil the fund requirement. The possibility of number of lenders crossing the double digit is not uncommon.
But this does not mean that the borrower would need to repay the amount to all involved lenders individually. The amount is to be repaid to the P2P provider that in turn remits the amount to the lenders’ accounts in the proportion of money disbursed.
However, the drawback of this platform is that the loans do not get reported to the bureaus and hence does not help in building the credit profile. In the absence of credit profile one may be required to continue to look out for options of personal loans without CIBIL check, akin to P2P platform. Also, in the absence of adequate lenders agreeing, one may not be able to raise complete required amount.
Pay day loans : This is another form of loan that is quite popular in developed economies and is gaining momentum in India. This is a good option in case one needs only small amount of advance and is ready to pay it back upon getting the salary credit. But as the popularity gains, the providers are also extending these loans for more than one month. There are products that go up to repayment of 9 months as well. So even this could be a good option for those who have income less than 25,000.
Your email address will not be published. Required fields are marked *
Individuals love their credit cards, and the lifestyle it will probabl ...
Nice Article. There is always pros and cons of every aspect. Indian Cu ...
Thanks for finally writing about >Why Indian women fall short on cr ...
Daily Tips to stay Credit Healthy
© All Rights Reserved at Credit Sudhaar