It is essential to have adequate information while seeking a loan in order to make a well-informed borrowing decision. There are various aspects that have to be taken into consideration while availing of a loan, namely rate of interest, applicable charges and fees, loan tenure, repayment options, besides others.
Potential loan seekers need to clear all their doubts before going ahead with the application process.
Following are answers to five uncommon questions about personal loans. Such answers will go a long way in helping applicants avail of credit to fulfill their dreams and responsibilities.
- How long does it take for a loan application to get processed?
The duration for loan application processing varies from financier to financier. Generally, the application is processed immediately after the lender receives the duly filled application form along with all other documents. It is, therefore, necessary to make sure all the paperwork is in place so as to ensure quick processing. Upon successful processing, the loan amount is disbursed into the preferred account quickly.
- Is it necessary to provide collateral against the loan?
Personal loans are unsecured, which means that there is no need to keep collateral against the loan. Generally, other types of loans require a collateral such as an asset against the loan. This means that if the borrower fails to make timely repayments, the lender seizes the ownership of the asset.
- Why do lenders levy a secure fee for applications made online?
Individuals availing of a personal loan online have to pay a fee, known as a secure fee, for submission of the loan application form through the Internet. Such a fee is levied so as to process the loan application. Lenders provide the benefit of instant approval for online applications. Those choosing to not pay the fee do not receive the benefit of instant approval.
- Is it possible to obtain a top-up facility on an existing loan?
Most lenders offer a top-up facility on an existing loan depending on the loan tenure after paying specific installments. Sometimes, due to the additional requirement of funds, individuals seek a loan over and above their existing loan. Such a loan, known as a top-up loan, helps individuals in dire need of finance to obtain the necessary funds from their existing lender. As the individual has already gone through the loan application process in the past, the verification process is completed quickly.
- Is it possible to make advanced payments in case of a cash surge?
Most lenders offer the option of prepayment of the loan amount. In case the borrower receives a surge in income due to any reason, such as the sale of an asset or bonus, they may make an advanced payment. Prepayment may either be done in part or full. Repaying the entire loan amount before its actual date is known as foreclosure. Remember, both foreclosure and part-prepayments attract a charge. Hence, opt for such an option after analyzing its pros and cons.
It is necessary to be armed with adequate knowledge before applying for a personal loan. Doing so will make the application process less cumbersome and will help individuals to land the best deal.
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