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About Personal Loan

A short term of instant financial issues is main reason behind looking for personal loan. After approval of amount, it will help in resolving issues of financial needs and it can be used as per specific needs. In most of cases, bank and financial agencies approve loan within 1-2 days of application submission. Some interesting facts are outlined below:

Least Documentation: Application process is quite simple, user just need to submit the entire required document in specified format. Approval of amount is easy because least document is required along with application form.

Easily Available: One of the striking benefit of loan is instant and easy availability. These days all recognized and reputed financial organizations apart from nationalized bank avails this exclusive facility. All existing as well as new customers may apply for loan whenever they need to fulfill their instant financial requirement.

Instant Approval Facility: These days banks and other financial organization follow instant approval facility to help their customer as quickly as they can. This mechanism is really beneficial and sometimes banks check credit and bad credit of respective individual. Sometime amount will be transferred in account of beneficiary.

Types of Personal Loan:

a. Paday Loans
b. Unsecured
c. Variable-rate
d. Fixed-rate
e. Convertible
f. Secured
g. Personal loan consolidation plans
h. Single-payment
i. Installment loans
j. Personal loan balance transfer

Remember Following Points While Applying for Personal Loan:

It is quite necessary to confirm few points valuable points to make processing easier, as far as amount approval is concern:

Interest Rate: Before applying for personal loan it is necessary to keep complete information about interest rate imposed by that bank or financial agency against providing amount. As we know that it is a part of unsecured loan and in most of the cases lender ask for higher interest rate, one of the prime reason behind this fact is that customer do not need to give their any valuable asset to get loan, it force lender to charge higher interest rate.

Customer Credit History: it is quite vital to check and explore complete transaction history, after completion of this process you will be able to get sense of approval of amount. If user records are not so good then it will be necessary for customer to follow the guideline of respective bank or financial organization.

Collect Information about all applicable charges: This point is quite important from repayment point of view. If in case any customer will miss the deadline of repayment then they need to pay add on charges as per their requirement.

Best and Complete Research is Important to Compare Features of Same Loan from Different Bank: It is quite important to manage this kind of facility. Customer just needs to explore all valuable and beneficial features to ensure that which bank offer is better and special. There are several online platforms that will help individual to find the affordable and easiest offers.

Find out the Reason behind Need of Personal Loan: Customer need to be sure about the need and importance of amount before deciding other factors related to other once. Maximum numbers of time individual look for amount to pay hospital bills, other health issues, child education and other important facts.

Important Tips Regarding Personal Loan:

1. Always Choose Loan Amount as per Your Repayment Ability: Usually, repayment tenure lies between one and five years. Bank gives flexibility to users to pick repayment tenure as per their ability to repay amount.
2. Always Submit Loan Related Document Carefully: It is customer responsibility to know about all printed terms and condition. If you are aware about all given criteria then it will be beneficial in case of any complication.
3. Be aware about your EMI: Fix your EMI as per your loan amount before finalizing your personal loan. This approach will help to resolve all finance management related queries. Sometimes it is quite necessary to know about quick cash loan facility to make processing much easier.
4. Compare Information about Processing Fees: Every bank charge processing fees against availing amount. User can easily compare applicable fees of other banks.
5. Compare Multiple Personal Loans: Customer must calculate and check all available personal loans along with APR (annual percentage rate). This type of calculation eases plenty of things regarding calculation of repayment amount and other factors.
6. Collect Information Regarding Dynamic Interest Rate: As it is known that, change in interest rate is decided by authorize bank and RBI. Generally, repayment amount rely on current market and other integral factors. If someone has borrowed loan amount under this scheme then they have to repay amount with high or low interest rate after the tenure.
7. Always Pick Affordable Interest Rate: Always pick affordable interest rate, it will help you to repay amount on time. As you know that on time repayment will boost your CIBIL score.
8. Pick Manageable Automated Repayment Option: While choosing ECS or standard instruction as your repayment option. Always check your account after amount deduction to ensure that only required amount was deducted.

Personal loan without documents

Personal loan is an unsecured loan that doesn’t involve any collateral or security and can be availed for meeting different financial needs and emergencies. However, what most people are concerned about is it possible to avail personal loan without documents? So, the answer is ‘YES’.

Personal loan applications basically rely on the creditworthiness of the applicant and this become even more vital in case the application is submitted without documents. However, the documents are not completely eliminated from the process; thanks to the FinTech Companies that works entirely on digital platform and usually requires minimum paperwork. All you need to do is scan and upload the KYC documents without visiting a lender in person. Technology has advanced enough that has enabled lenders to sanction personal loan without physical documentation and thus, the necessary information can be scanned and uploaded online to the convenience of borrowers and lenders.

Ways to avail personal loan without documents:

Repay outstanding dues on time :– If you’re an existing borrower to a bank, make sure to never miss or delay EMI payments. This will help the lender to realize that you’re financially responsible and would sanction loan without further paperwork.

Maintain a high credit score :– As it is an unsecured loan, the approval primarily depends on the applicant’s creditworthiness. Thus, keeping a score above 750 would showcase you as creditworthy and the lender would happily approve the loan request.

Lower debt-to-income ratio :– Keep your debt-to-income ratio or credit utilization ratio in check. A higher ratio signifies you as credit hungry and the lender may deny your personal loan application.

Tips to get Personal Loan Easily:

Though, it is the most easiest and convenient unsecured type of loans, still there are certain factors which are required to be considered before applying for a personal loan. Check out the factors here:

Fees and charges – The most ideal approach to get an optimal loan would be not simply to think about the rate of interest or EMI, yet additionally consider the processing charges, documentation charges and pre-payment charges as well.

Personal loan quotes – When you apply for a loan, you leave an "impression" on your credit record which banks check before approving loan or credit to you. Too many loan applications poorly affect your credit score. So, avoid getting multiple quotes when not required.

Read the loan documents thoroughly – Generally, most people sign the application document without thoroughly reading and understanding the terms and conditions of the bank or NBFCs. Thus, it is essential to read the document properly before signing for a personal loan.

Utilize the loan amount precisely – Always keep the purpose in mind for which the loan was taken and utilize the amount specifically for that productive purpose only. So, be wise and use the loan amount carefully.

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Capital Adequacy Ratio (CAR bank)

The capital adequacy ratio (CAR) is used to express bank’s risk-weighted credit exposures in terms of capital percentage. It is also known as capital-to-risk weighted assets ratio (CRAR), which is used to protect depositors and promote efficient and stable financial systems. To calculate CAR Bank, two types of capital are measured – tier 1 capital, which absorbs losses without bank’s interference to cease trading, and tier 2 capital, which absorbs losses in case of winding-up and thus, provides lesser degree of protection to the depositors.

How CAR is calculated?

As aforementioned, capital adequacy ratio measures the amount of bank’s core capital expressed in terms of percentage. The CAR bank is calculate using the formula given below:
CAR = TIER 1 Capital + Tier 2 Capital / Risk weighted assets
• Tier 1 capital includes paid up capital, ordinary share capital, statutory reserves, audited revenue reserves, and disclosed free reserves.
• Tier 2 capital includes unaudited retained earnings, undisclosed reserves, general loss reserves, subordinated debts, and hybrid debt capital instruments.
• Risk can be weighted assets or the respective national regulator’s minimum total capital requirement.

The minimum ratio criteria:

Currently, the minimum CAR bank to risk weighted assets is 8% under Base II and 10.5% under Base III. Meanwhile, high capital adequacy ratios are generally higher than the minimum requirements under Base II and Base III.

Minimum capital adequacy ratios determine that the banks have enough cushion to absorb reasonable losses before getting into insolvent and consequently depositors losing their funds.