Mysore Personal Loan

Personal Loan in Mysore Overview

A personal loan can be availed from banks or non-banking financial companies by individuals in order to fulfill their personal financial requirements. The purpose of availing a personal loan can be anything from funding a marriage to financing your child’s future education. Banks offer personal loans on the basis of the applicant’s income, employment history, and repayment capacity that is assessed through his/her credit report.

A personal loan is usually an unsecured debt; this implies that the borrower does not pledge any collateral against it as assurance. In the event of a loan default, the lender cannot take possession of any asset belonging to the borrower as compensation. This makes the personal loan a debt of relatively higher risk, when compared to an auto loan or a loan against property. Hence, lenders tend to offer personal loans at higher interest rates.

Defaulting on a personal loan will negatively impact the credit report of the borrower. Hence, it is imperative to pay the personal loan EMIs on the due date.

Personal Loans offered by various banks in Mysore

Several leading banks and NBFCs offer personal loans to customers across Mysore. In addition, these banking institutions also provide other services such as core banking facilities, asset management, investment advice, and alternate forms of commercial lending. Some of the prominent financial institutions in Mysore that offer personal loans to customers are listed below:

• Citibank
• HDFC Bank
• IndusInd Bank
• RBL Bank
• IDFC First Bank

How do I get a Personal Loan with the lowest interest rate in Mysore?

When applying for a personal loan, it is important to research well and narrow down on a lender who offers a low interest rate. The personal loan interest rate determines the amount that you would be paying as monthly installments for the repayment of the loan. Getting the best interest rate hence, ensures that the total amount paid towards the loan in the long run is minimised. Follow the tips mentioned below to avail a great deal on your personal loan:

1. Maintain a good credit score - Your credit score plays a crucial role in determining your repayment capacity for the loan. If you have a low credit score, i.e. Below 700, the lender considers your loan as a high-risk debt. To compensate for the risk, the bank would charge a higher interest rate.
• In the ideal scenario, you would have to assess your credit score and understand your creditworthiness before you apply for a personal loan. You can check your credit score absolutely free of cost at the websites of credit reporting bureaus such as CIBIL, Equifax, and Experian. Neutral third-party financial websites also offer you the facility of checking your credit score online.
• If your credit score is a low value, then you can attempt to improve it before loan application. However, you should first understand if you can afford to wait for a few years before getting the loan. This is because the task of improving your credit score would usually take a few years.
• Individuals with low credit scores can get into an agreement with past lenders and pay off their pending loans. Another way to improve your credit report is to make consistent payments towards your debts, in full and on time.
2. Getting a better interest rate on your loan - There are banks that offer personal loans with more attractive interest rates when a collateral is offered as security. So, if a customer has a valuable asset such as a car or a house, he/she can pledge the asset with the bank for a better loan rate. A secured personal loan has the disadvantage of losing the asset in the event of a loan repayment failure. In this scenario, the lender takes possession of the pledged asset in the form of compensation. However, a secured loan is much more appropriate for a customer who has bad credit. An applicant can also opt for any of the following in order to avail a loan with better interest rate:
   • Taking a loan with a floating rate of interest which increases with the prime lending rate.
   • Requesting a family member or a friend to stand as a co-applicant. This is an ideal option if the primary applicant has a bad credit score. He/she can avail the loan on the creditworthiness of the co-signer.
   • Compare the personal loan interest rates across lenders in order to identify the ones that offer the best deal. It is possible to do so through neutral third-party financial websites.

Personal Loan Interest Rates in Mysore 2023

Salary requirements to avail Personal Loans in Mysore

In order to be able to get a personal loan in Mysore, an applicant has to fulfill the following eligibility criteria:

• The applicant should be between 21 and 60 years of age.
• A salaried individual should have a monthly income of at least Rs.15,000. The salary bracket usually depends on the city in which the applicant resides and the company he/she works for. For instance, if the applicant stays in a metropolitan city or works in a start-up, the salary requirement is higher.
• The applicant should have stayed in Mysore for at least 1 year.
• The customer should have a minimum work experience of 2 years.
• The applicant is required to submit specific documents, such as address proof, bank statements, identity proof, etc.

FAQs on Personal Loan in Mysore

1. How does prepayment and preclosure of personal loans differ?

   In the case of prepayment, the borrower pays off a part of the loan amount before it becomes due as per the EMI schedule. The charges incurred for prepayment of a personal loan in Mysore is usually between 2% and 5% of the outstanding loan amount. Some banks also restrict the prepayment to be done after the borrower has paid a certain number of EMIs.

   Loan preclosure refers to the borrower paying off the loan completely before the loan tenure ends. Preclosure charges range from 2% to 5% of the loan amount.

2. I observed that the initial EMIs that I pay do not reduce my loan amount to a great extent. Why is this so?

   The larger portion of the EMIs you pay are adjusted against the interest that is due on your personal loan. This process, commonly referred to as front loading, pays off only a small portion of your principal amount initially. However, as you progress further into the loan repayment period, the interest on the outstanding loan amount would have been almost completely paid off. Then a larger part of the EMI you pay is adjusted against the loan principal.

3. What is floating interest rate on a personal loan?

   Unlike a fixed interest on your personal loan, a floating interest rate ensures that the EMIs decrease as you progress further into the loan repayment tenure. A floating interest loan follows the reducing balance method of interest calculation. The latest MCLR rules indicate that floating rates can be altered either half-yearly or annually.

4. Do I receive tax benefits on my personal loan?

   Tax benefits are usually not associated with personal loans. But if you take a personal loan for home renovation, you may be eligible to receive tax deductions on the interest paid (not the principal amount) under Section 24 of the Income Tax Act.

5. How long does it take for a personal loan approval in Mysore?

   The approval for your personal loan is totally dependent on the lender. The entire process usually takes anywhere between 48 hours to 2 weeks. Once you submit all relevant documentation, the lender verifies the details. The loan will then be disbursed within 7 working days.