Personal loans


Published on

Published in: Economy & Finance, Business
1 Like
  • @Mr. Josh Whyte - Thanks for sharing this valuable & important information. Guys please go through with the information that Mr. Josh has provided before you go to buy any loan.
    Are you sure you want to  Yes  No
    Your message goes here
  • Be careful here. Nobody can help you here or even suggest how you can get financial help. Any answer of a loan lender to your question, you MUST ignore, because they are SCAMS…real SCAMS…i was a victim of which i was ripped thousands of dollars…well thank God for a Christian sister who referred me to a loan organisation.They made my life a valuable one and gave it a meaning. When the sister gave me their contact, I contacted them. Then I requested for a loan with all the necessary evidence to prove that I actually needed a loan, they approved a loan of $30,000.00 USD and in 48 hours after meeting up to their necessary requirements, my loan was deposited in my bank account . Though i was very nervous with the loan organization at first due to my previous bad experiences,especially when the issue of me settling the transfer charges came up, I hold on to my faith due to the fact that my relative referred me, got it cleared,and as God should have it, little did I know that my financial shortcomings has come to a final HALT. If not for that quick referral from a christian sister to that genuine source ,I would have regretted my total life,because at that point in time i just divorced the father of my son, and my son (Kenneth) was faced with a life and death situation. I was faced with his hospital bills and i was also faced with foreclosure at my apartment.Details of this GOD-SENT organization won’t be disclose for now for fear of impersonation ( because it has been discovered that some persons are not really in need of financial help, but they just want to collect money from this genuine christian loan organization). And it is because of this reason they don,t give out loan anyhow. You must be able to convince them very well, and provide good proofs to show that you really need a loan before they can approve it for you. Their charge is very affordable and reliable compare to many out there,their interest rates is just 7%,little documentation,and no credit check. As i have earlier said, for security reasons i can only provide my email for anyone in need of more information to contact me to get in touch with them. Embrace this and be free from scammers.
    Are you sure you want to  Yes  No
    Your message goes here
No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Personal loans

  1. 1. T.Y.BBI PERSONAL LOAN INTRODUCTION A loan is a redistribution of financial assets over a time between the lender and the giver of the loan. The borrower initially receives an amount of money from the lender, which they pay back usually but not always in regular installments to the lender. This service is generally provided at a cost, discounted as interest on the debt, to the lender. Acting as a principal of loans is one of the principal task for financial institution for banks. Loans are generally funded by deposits for other institution issuing of debt contract, such as bonds is a typical form of funding. Due to rising of basic needs, personal loan facilitated by various bank play a vital role in fulfilling the people desire of buying their dreams. They are ideal when we need or buy a product for ideal when do not have ready cash. Personal loan are better choice compared with consumer durable loans. In fact before we consider taking a consumer durable loan we might consider a personal loan instead as the procedure is slightly longer but the rate of interest is lower. Flexibility of duration and 1
  2. 2. T.Y.BBI PERSONAL LOAN availability of various schemes make personal loan an attractive option. It is an all purpose a loan, which is given in most cases without any kind of security like a car, home, shares or any kind of property. Most nationalized, foreign, and co-operative banks offer personal loan. Besides banks, some other finance companies and financial institution also offer them. Lending rates differ for different financiers and currently from 12% to 30%. These loans are available in the range of Rs 15000 to Rs 10 lakhs. The repayment period varies widely; some lenders usually permit repayment up to a maximum of 60 months. And most lenders restrict the lending to a maximum period of 36 months. Most bank will give anywhere between Rs20, 000 and Rs10 lakhs (Rs 1 million) for a maximum for period of 60 months. To be eligible for the loan you need to be between the age of 25years and 58years in case of a salaried individual or between 25 years and 65years if you are self-employed. While issuing the loans, banks look at factors like your salary or profit, the number of years you have worked in a particular organization and the number of years you have stayed in your current residence. 2
  3. 3. T.Y.BBI PERSONAL LOAN Advantages and disadvantages of personal loan With a lot many lenders on the block willing to offer their loan services to all, applying for a loan nowadays, is no longer a problem. Gone are the days when you had to wait to buy something or go out and do what you wanted to, because a hassle free and available to all personal loan is now no more a dream, but a reality. Today, various loans are available in the market to suit individual needs of the people. In Personal Loans as well, different types of loans are available. They can serve you well in your financial limitations while making your living better. No delay should be done in availing a loan especially when it suits your financial situation and can be available to you in a desired time. A personal loan is often described as unsecured loans because it allows you to borrow money without having to provide security against it. You can use the personal loans for the purchase of your house or a car. The personal loans are better for a longer time period. Following are some of the advantages of the personal loans- - While making an evaluation of the cost of the loan you need to consider the TAR (Total Amount Repayable) which means that the 3
  4. 4. T.Y.BBI PERSONAL LOAN total amount that you owe towards the bank or a lender which also includes the rate of interest on the loan and the payments need to be made on a monthly basis. A suitable deal is where you get a lower TAR. - The maximum amount that you can borrow ranges up to £25,000 and the time period for the refund is up to ten years. The advantage with the personal loan is that when you take a maximum amount as a loan then you have to pay a lower rate of interest. It is totally different from the terms and conditions for the mortgage. The unsecured personal loans are not protected for your property so if you are not able to refund the loan then you can be rest assured that your house is safe. - The interest rates for the personal loans are also fixed. This makes it easy for you to make a planning for the payments that has to be made. The refunding amount also remains stagnant all the way through the time period of the loan. - With a dynamic market scenario of loans the rate of interest has seen so many ups and downs. Now to get a loan it has become simpler than ever before. The financial companies offer you loans through their telephone service. They have toll-free numbers and they guide and provide you the best deals and offers. Following are some of the disadvantages of the personal loans: - Various financial companies and clever lenders introduce certain plans like- make a purchase and pay it later, offer free gift items, etc. These will only raise your price of the loan. So take a wiser decision and go for the basic loan with favorable terms and conditions. 4
  5. 5. T.Y.BBI PERSONAL LOAN Always make a choice for those loans which have a low rate of interest and where the terms of the refund are moderate. - Don’t make a hasty decision in choosing a personal loan. It is not right to take a loan from just another bank. Make a survey and try to find out various offers and plans that various other banks and financial companies have to offer. Now with the internet things has become very simpler. You can visit various financial companies, what are the offers and plans these companies are offering. Accordingly you can take a decision whichever plan suits you. - The PPI (Payment Protection Insurance) provides you the refund on a monthly basis if you are not able to work, you have met with an accident, in case you have suffered a heavy loss in your business, you are not employed anywhere, and make a payment for your loan in case of your death. You should be aware of this type of insurance as it is a costly affair and it adds an amount ranging from £1,000 to £5,000. - According to a survey majority of the personal loans are paid off before the completion of their tenure. You need to look out for those lenders who take heavy amount for the settling of your loans before the tenure. - You have to handle the annual percentage rates very carefully as it entirely depends on your financial credibility. You probably might not be eligible as to be entitled for it. You need to have a good credit history otherwise you won’t be able to qualify for the lender’s potential customer list. 5
  6. 6. T.Y.BBI PERSONAL LOAN Here are few guidelines before taking any concrete decision regarding the personal loans: - Analyze all the offers and schemes before applying for the loan. There are various lenders who are not real and their motive is just to earn profits. - To be entitled for a personal loan the procedure followed is rigorous although there is less documentation involved in it. - Go through the contract thoroughly and reassess the closure price and for any hidden cost (If any). It is an important step which will only benefit you. - If you are planning for a personal loan then most of the time it is cheaper than getting a credit card. - Excluding the consumer durable loans the rate of interest for the personal loans are high. Personal loans - Special emphasis on bad credit personal loans Before approving a loan application, the lender calculates the following two affordability parameters to make sure that the chances of repayment are not bleak: • Credit history, to ascertain the loan seeker's past financial record as good or average or bad. • Debt to income ratio (DTI = Debts/Income), to compute the loan seeker's current monetary position. 6
  7. 7. T.Y.BBI PERSONAL LOAN Depending on the above-mentioned calculations, the lender categorizes the loan seeker as: prime customer (person with a good credit record), near prime customer (person with an average credit record) or sub-prime customer (person with a poor or bad or adverse credit record). A sub-prime client is further categorized to get a better idea of the hazards that he may pose - low adverse credit, medium adverse credit or heavy adverse credit. After this detailed evaluation and classification, the lender approves the loan application/amount and decides the loan terms/conditions. Sub-prime loan seekers can avail credit support under the 'bad credit personal loans' category. Available in both secured and unsecured form, this special personal loan sub-category helps people bring their lives back on track. For obvious reasons, prime and even near-prime customers can negotiate for a favorable loan deal. But, sub-prime customers have to settle for high APRs, and stringent loan terms and conditions. Still, secured loans are more gainful and are generally easier to get as compared to unsecured loans. 7
  8. 8. T.Y.BBI PERSONAL LOAN Secured bad credit personal loans, the best solution for homeowners and property owners are comparatively safer for the lenders, as they are availed by pledging collateral. As a result, there are chances that the loan seeker may get a less stringent loan deal. But, unsecured bad credit personal loans, probably the only option for those UK residents who are incapable of offering collateral, are risky for the lenders, as they are availed without pledging collateral. As a result, the creditor cannot afford to offer a flexible loan deal. How to ensure a safe personal loan? The online media for applying for loans is becoming increasingly popular these days. Being time saving and convenient, it's preferred by most of the borrowers. Nobody likes visiting the bank manager in persona to apply for a loan. But, one must ensure that s/he is applying to the right lender and not to a loan shark. Loan sharks are unlicensed lenders who take advantage of those who are rejected elsewhere or are 8
  9. 9. T.Y.BBI PERSONAL LOAN suffering from extreme bad credit. These lenders usually prey on vulnerable people like the unemployed, lone parents, bad credit holders, etc. So, whenever you apply for personal loans, make sure that the online lender you are dealing with is registered with OFT (Office of Fair Trading) and regulated by FISA (Finance Industry Standard association). Loan sharks are not licensed and therefore they operate outside the law. These unlicensed moneylenders charge very high interest rates and use violence and threat if the borrower is unable to repay the loan. Personal loans should be taken with great care and caution. The loan agreement should be read carefully before signing and if needed, professional help from a financial consultant should be taken. An unlicensed lender otherwise may make you life hell. He does the following: • Grant you personal loans on very expensive rates • Harasses you if you fall behind your repayments • Pressurizes you to borrow more from them to repay your existing debts 9
  10. 10. T.Y.BBI PERSONAL LOAN Personal cash loan It can be a viable short-term solution for temporary monetary problems because these allow consumers to receive funding for bills, expenses, and other necessary costs. When handled 10
  11. 11. T.Y.BBI PERSONAL LOAN wisely, they can improve an individual’s current financial situation. When not handled wisely, however, a personal cash loan can lead to serious trouble. If help is needed, funding can be qualified for quickly, with little documentation. However, because of higher interest rates and serious default terms, one should cautiously consider taking out this form of funding. There are many different funding programs, including payday advances, cash advances or other unsecured cash loans. They are available through store-front and financial companies, as well as on the Internet. While there really are no regulations for which a personal cash loan can be used, people typically use them to help pay bills on time, or to pay for some unforeseen expense that they do not have adequate savings to cover. Unfortunately, some people may also use personal cash loans to meet their perceived need for instant gratification. Using money in this manner can get a person into financial trouble quickly. Because these programs can have high interest rates and little tolerance for missed payments, they are best used in emergency situations, or when the borrower knows they can repay the obligation. Getting a personal cash loan can be quick and easy, which is good for the person who is in financial need. Lenders who offer personal cash loans do not have many requirements. Most lenders require the borrower to be at least 18 years old and to have had a checking account open and in use for at least 90 days. The borrower also must show documentation that proves they receive a minimum of $1000 per month to qualify. Most lenders typically do not require good credit and rarely run 11
  12. 12. T.Y.BBI PERSONAL LOAN credit checks for instant loans. However, lending companies may check for other outstanding debts or in-process bankruptcies. This funding can be a blessing or a curse to the one who is borrowing. When a person takes on a personal cash loan, it is important to realize they are in debt to the lender. As the Bible says, "borrower is servant to the lender" (Proverbs 22:7). This can be very overwhelming and should encourage the individual to seek financial freedom. However, unforeseen financial difficulties sometimes arise and people need personal cash loans to pay these obligations. It is important to be very selective in this process and choose lenders that offer the lowest rates and best terms. 12
  13. 13. T.Y.BBI PERSONAL LOAN Personal loan guaranteed Personal loan guaranteed are available from many sources, and are relatively easy to obtain either through the Internet, finance company, bank, or even a credit card company for anyone with collateral. The quickest (and apparently most common) financing is payday loans. They are secured by the next paycheck, and allow the borrower to receive funds between paydays. They do not require a credit check when they are short term and $500 or less. There is a fee for this type of financing that is taken out up front, so actual funds received from a personal loan guaranteed are the amount less the fee. When larger amounts are needed, such as to buy a computer, or furniture, or to pay tuition or vacation expenses, a credit check will most certainly be done. In that case, in order to avoid having several companies check credit (and thus lowering personal credit rating), it would be wiser to use a broker who would make a one-time check and pass that information on to possible lenders. A bank statement and paycheck stub will be needed to prove earnings enough to qualify for this personal loan guaranteed. Typical fees for personal loans guaranteed are 15-30% of the amount borrowed. When one has to begin borrowing on future paychecks or on the home, it may a good time to review financial priorities. It is important to keep money in its proper place: "For the love of money is the root of all evil: which while some coveted after, 13
  14. 14. T.Y.BBI PERSONAL LOAN they have erred from the faith, and pierced themselves through with many sorrows." (1 Timothy 6:10). Remember that God promises each person who believes in Him treasures unimaginable in heaven. Don't store up treasures here, concentrate on the best that is yet to come. Another source is the home equity line of credit. The larger personal loans guaranteed by the equity in the home are good for debt consolidation, home remodeling and the like. The interest rate is lower than the payday loans. This kind of financing equates to a second mortgage, and if selling a home before it's paid off, that personal loan guaranteed comes out of the sale proceeds first. When counting on the proceeds of a house to make a down payment on the next one, this could present a serious problem. The best way to handle this kind of personal loan guaranteed is to stay put until both the loan and mortgage are paid off. 14
  15. 15. T.Y.BBI PERSONAL LOAN There are basically Two Types of Personal Loans:- 1) Secured loan 2) Unsecured loan 1) Secured loan a) The loan that is secured against some sort of fixed or immovable/movable asset is known as secured loan. b) This sort of guaranteed personal loans is easily available on account of the collateral that is provided alongside; thereby making the lending institutions more comfortable in forwarding the loan. c) Secured personal loans involve rates of interest that are much lower and easy options for repayment. d) Due to the collateral that is provided, banks and financial institutions usually are unperturbed by defaults in payments or by debts that are pending. e) Secured personal loans are made available to the individual within a period of thirty days after submitting an application. 15
  16. 16. T.Y.BBI PERSONAL LOAN How Does A Secured Personal Loan Benefit the Borrower And the Lender? 1. Secured Personal Loans can be repaid over a longer period of time, with a lower monthly payment. 2. They are cost effective on account of the low rates of interest charged on the loan. 3. Since the loan has been secured by pledging the assets of the borrower, the risk to the lender's investment is greatly reduced. 4. Their easy availability is another factor. Very few loan applications for secured loans are turned down; since the loan would be secured on the strength of the borrower's assets Secured personal loans can only be obtained by a borrower after keeping an asset such as real estate property, car or jewelry as collateral with the lender. These kinds of loans help the lenders make sure that they will get their money back, and hence they approve and provide the loans for any amount of money with more security. Other than that, the approval of the loan application also depends a lot on the borrower’s credit history, his current monetary position, his current employment status and the obtainable equity in the deposited collateral. 2) Unsecured loan An unsecured personal loan allows you to borrow money without having to provide security against it, such as your home or car. This is what makes a secured personal loan different from unsecured personal loan. The people who don’t own their own house and 16
  17. 17. T.Y.BBI PERSONAL LOAN students who are living away from their home are the most suitable borrowers of unsecured personal loans. If you don’t have enough financial resources to repay the loan and those who don’t want to put their costly items in jeopardy, then the unsecured personal loans are the best option for you. You have the danger of getting your property seized in secured loans and unsecured personal loans are total contradictory to it which offers less botheration to the borrowers. Usually the borrowers are attracted towards those offers where you are hassle-free. These all factors are the major contributors to the popularity of the unsecured personal loans. An individual can take a personal loan for a variety of reasons. Loans for personal debt help provide funds to purchase your dream car, pay for your mortgage or home improvement requirements. In fact unsecured personal loans help meet most of the financial emergencies that an individual can think of. The main advantage of the unsecured personal loan is that anybody is entitled for an unsecured personal loan whether with a good credit or a poor credit. Generally it has been witnessed that a borrower with a poor credit is not given the unsecured personal loans easily by the lenders. But there are some lenders who still provide unsecured personal loans to the people with poor credit. There are people who have the privilege of unsecured personal loans after being a bankrupt or after their property being taken over. 17
  18. 18. T.Y.BBI PERSONAL LOAN The rate of interest is higher for the unsecured personal loans as compared to the secured personal loans. In the case of unsecured personal loans the lender is at a risk because incase you are not able to make a repay of the loan then the lender has nothing to take the possession of as there is not collateral made against the loan. The unsecured credit line and unsecured credit cars are also forms of unsecured personal loans. The unsecured credit cars are offered to those borrowers those who are financial stable and have a good financial background. For unsecured credit card you need not deposit a considerable amount and on the contrary to this you have to make a decided amount in advance in secured credit cards. The main and the most important factor of the unsecured personal loan is that you need not deposit any collateral against the loan to the lender. Through unsecured credit line the businessmen are benefited the most as they are in need of cash. The unsecured credit line is offered according to one’s financial status. It is up to the business man what he wants to do with the credit whether he uses to buy some machines or use it to expand his business. It is evident that the interest is only charged on the amount you have taken. The rate of interest for the unsecured loan is relatively higher than the secured loans. No doubt that unsecured personal loans are the most preferred by majority of the people but there are some strict rules and guidelines attached with it. Before you arrive to any concrete decision you need to have all the details of the details pertaining to the unsecured personal loans. It is true that you don’t have to make any collateral for the unsecured personal loans but still 18
  19. 19. T.Y.BBI PERSONAL LOAN the refunds has to made on time. Just in case you fail to make a refund of the loans there are probabilities that you can face federal lawsuit against you which will only make the matter worse. Your current financial status will be affected and in a worse scenario you will be denied for any form of loans in the coming time. Some important facts about unsecured personal loans: - For unsecured personal loan you need to have a good past financial record. The basic condition for offering an unsecured personal loan is your credibility to refund the loan. - For getting an unsecured persona loan you do not have to deposit any collateral against the loan with the lender. - The loan approval process of the unsecured personal loans is very quick the reason being less paperwork is put into use. There is no appraisal of the property involved adding to the fast approval process of the unsecured personal loans. - The loans are approved achieving a target of £25,000. - The rate of interest of the unsecured personal loan is dynamic in nature and can differ from seven to thirty percent. - The terms and guidelines of the unsecured personal loans are not so favorable. The time period for the repayment of the loan can vary from six to ten years. Under this condition the smaller the loan period the more you have to pay on a monthly basis. 19
  20. 20. T.Y.BBI PERSONAL LOAN The Benefits behind an Unsecured Personal Loan • There is no requirement of collateral, and the borrower need not pledge his assets to procure the loan. • There is no necessity for documents regarding the borrower's tax returns, or for financial statements. The information on the borrower's financial background need not be verified by supporting documents. Quick approvals, and an easy application process, are other attractive benefits of this loan Unsecured loans + unsecured personal loans - Favorites among the borrowers. In the last two years, the percentage of unsecured loan takers has increased considerably in the UK loan market. Not only the tenants, most homeowners also prefer taking loans without pledging any asset, especially the home, as security to the lender. The risk of repossession of home plays heavy on the minds of the borrowers, when they weigh different loan options. Unsecured loans are masters in luring customers because of the features cited below: • Available for a range of different amounts and repayment terms. • Not secured against any asset. 20
  21. 21. T.Y.BBI PERSONAL LOAN • No restriction on the purpose of availing loan. • Amount available usually ranges from £500 to £15,000. • Loan tenure may stretch from 6 months to 10 years. • Different lenders offer different APRs. Most borrowers wonder that if nothing is secured, then on what basis the loan amount is calculated for unsecured personal loans. There are many factors that play a vital role in deciding the amount to be granted as unsecured loans. Some of the parameters are listed below. • Credit History of the borrower- A borrower with few arrears, defaults, and miss payments is more likely to get a greater amount than the one who has an unhealthy credit record. So, better the credit score of the borrower, higher the amount granted as unsecured loans. • Disposable income of the borrower- By disposable income, one means the approximate income of the borrower left per month after paying all living expenditures, installments of other loans and credit card payments etc. On the basis of this, the lender decides how much amount the borrower will be able to pay as the installment of the new loan. 21
  22. 22. T.Y.BBI PERSONAL LOAN • Debt to income (DTI) ratio- This determines the affordability of the borrower. DTI is calculated by dividing the monthly income of the borrower by his expenditures. This reveals the paying capacity of the borrower. If the DTI ratio is more than 0.36, the borrower will get a good amount as unsecured personal loans. • Credit policies of the lender- Every lender has a different credit policy. So, the loan amount, tenure and the APR charged is subject to the lender's criteria. For instance, the high street banks may not at all provide unsecured personal loans to those with bad credit history; whereas, an online lender may approve the loan. There are innumerable factors that help in determining the loan amount of unsecured loans, the major ones being discussed above. The borrowers' requirements and say also works. In most cases, the borrowers mention the purpose for which they are procuring unsecured loans in the loan application form. As per the purpose, the lenders grant unsecured loans. 22
  23. 23. T.Y.BBI PERSONAL LOAN Short Term Personal Loans Short Term Personal Loans can be got through banks and online financial companies, and a wide variety of other sources. With such a Short Term Personal Loan: The rate of interest involved is usually high. This is because the period of repayment is usually for a short time. Such types of short term personal loans have to be beneficial to both the borrower and the lender, and high rates of interest are one of the ways by which a bank or a financial company stands to benefit. - This type of short term funding is often utilized to help individuals who are in need of varying sums of money for a short period. Many of the lending companies usually provide for such a loan, and also stipulate the maximum amount of money that can be borrowed under such a circumstance. - Banks, while giving this type of short term personal loan, usually require collateral, before disbursing the same. Online financial companies only require a credit check, but lend very small sums of money. Banks do not offer more than $15, 000 or $20, 000 dollars as well, and individuals seeking larger sums of money, would have to tap other sources for funding. - Because of the negative and positive aspects of short term personal loans, it is recommended that the individual does his research thoroughly, before he applies for funding. 23
  24. 24. T.Y.BBI PERSONAL LOAN Fast Cash Advance Loan Sometimes, you may be in need of a quick payday loan, so that you could meet an unexpected money crisis. Car repair and other unexpected bills usually occur at inconvenient times. In case you do not have the extra cash to meet these unexpected expenses, you could really consider applying for a cash advance. A Fast Cash Advance Loan: - Is similar to a bank loan- only cash advances are a lot easier to qualify for, and enjoy a shorter term. Chances that your application for a bank loan may be denied are high as banks have a requirement of sufficient income, a collateral and good credit rating. - Has a two week term. Therefore your loan is due along with your next paycheck. Requires that the applicant must be at least 18 years of age. The cash advance company would also be checking out /confirming your salary and employment. While the company is keen to help you out, it also wishes to satisfy itself that you can repay the loan. - Renders you eligible to receive funds up to a maximum of $1000, with a cash advance. Some companies allow larger sums to be borrowed. - Typically fast cash advance loans are due within the period of two weeks. Taking the circumstances of the borrower into consideration however, some cash advance companies would expect that at least half the loan amount will be repaid in two 24
  25. 25. T.Y.BBI PERSONAL LOAN weeks, and the balance in a month. Such loans are called 30 Day Payday Loans. - But remember that before taking such a 30 day payday loan, choose a company that allows for long term loans, and do not assume that all cash advance companies would give long term cash advance. Far better to enter into a long term loan agreement, before taking the loan, otherwise you would have to pay extra interest and fees for the late period. Military Personal Loans are easy for servicemen to get anytime. Military jobs involve good salaries and high status and sometimes these could complicate matters by incurring extra expenses. 25
  26. 26. T.Y.BBI PERSONAL LOAN 26
  27. 27. T.Y.BBI PERSONAL LOAN An ICICI Bank personal loan is the one stop for all your financial needs to fulfill any of your desires. You can now secure a fast and easy personal loan for an amount up to Rs 15lakhs at attractive interest rates, with an ICICI Bank personal loan. With ICICI Bank personal loan you can get instant money for a wide range of your personal needs like:- 1. Renovation of your house 2. A holiday with your family 3. Your child’s education 4. Buying a laptop or a electronic equipments 5. Medical expenses or any other emergencies. The best personal loan cant’s get easier than an ICICI Bank personal loan. To secure a instant personal loan all you need is one of the following:- 1. A salary slip 2. Your credit card statement 27 A PERSONAL LOAN OF ICICI BANK
  28. 28. T.Y.BBI PERSONAL LOAN 3. Repayment track of an existing loan. For instant, at ICICI Bank, your net salary needs to be 96,000 annually or you need to have a net after tax of Rs 60,000 per annum. If you are a salaried individual you should have worked in your current organization for at least 1 year and if you are self-employed then you must have been running your business for at least 3 years. You must have also been in your current residence for at least a year. The loan is sanctioned within 3 working days. The processing fee is generally around 2% of the loan amount and is deducted up front the disbursement amount. Most bank charge pre-payment penalty of between 3% to 5% of the remaining amount. Objective 1. The various personal loan provides by ICICI Bank aims at provides financial support from the banking and financial system to the needy people for taking personal loan in India. 2. The main emphasis is that the needy people should be provided with an opportunity to take personal loan with financial support from the banking system with affordable terms and condition. 3. To make people aware to take advantages of the various types of personal loan provided by various bank. 4. To provide easy finance to the people. FEATURES 28
  29. 29. T.Y.BBI PERSONAL LOAN 1. Personal loan with a peace of mind: - ICICI bank personal loan provide a free life insurance cover (including total and permanent disability due to accident or sickness) to the value of the loan outstanding. The insurance cover is for outstanding balance of the personal loan as on date of death or total and permanent disability due to accident or sickness, will be covered excluding any defaulted installment. 2. A loan for every one: - loans for both salaried and self- employed personnel with freedom to jointly apply with your spouse. 3. Quick and hassle free loan:- quick processing time of 24 hours with hassle free documentation. No security or personal guarantors required. 4. Get more from your loan:- we offer attractive interest rate with loan from Rs 10,000lac to Rs 1,00,000 lac or to 10 times to the net remuneration whichever is lower. 5. Flexible repayment option:- you have flexibility to Choose the repayment period of upto 5 years (60 installments) and we also allow early settlement at a nominal fee. 6. Loan ranging from Rs 20,000 to Rs 15 lac 29
  30. 30. T.Y.BBI PERSONAL LOAN Eligibility Terms for your Personal Loan You can avail of an ICICI Bank Personal Loan if you meet the following criteria: Criteria Salaried Self - Employed Age 25 yrs. - 58 yrs. 25 yrs. - 65 yrs. Net Salary Net annual income - Rs. 96,000 p.a Net Profit after tax - Rs. 60,000 p.a Eligibility Employees of Public Ltd. cos. Private Ltd. cos. MNC’s Or Government. Doctors, MBA's, Architects, CA's, Engineers, Traders & Manufacturers Years in current job / profession 1 Year 3 Years Years in current residence 1 Year 1 Year 30
  31. 31. T.Y.BBI PERSONAL LOAN Documents Documents ( Pre Sanction) Salaried Self Employed Latest 3 months Bank Statement (where salary/income is credited) Yes Yes 3 Latest salary slips Yes Last 2 years ITR with computation of income / Certified Financials Yes Proof of Turnover (Latest Sales / Service tax returns) Yes Proof of Continuity current job (Form 16 / Company appointment letter ) Yes 31
  32. 32. T.Y.BBI PERSONAL LOAN Proof of Continuity current profession (IT Returns / Certificate of business continuity issued by the bank) Yes Proof of Identity (any one)Passport / Driving License / Voters ID / PAN card / Photo Credit Card / Employee ID card Yes Yes Proof of Residence (any one) Ration Card / Utility bill / LIC Policy Receipt Yes Yes Proof of Office (any one) Lease deed / Utility bill / Municipal Tax receipt / title deed Yes Proof of Qualification Highest Degree (for Professionals / Govt employees Yes Yes 32
  33. 33. T.Y.BBI PERSONAL LOAN Service Charges for your Personal Loan Enclosed find the service charges for an ICICI Bank Personal Loan Prepayment of the loan is possible after 180 days of availing the loan. Foreclosure charges as applicable would be levied on the outstanding loan. Part pre-payment is not allowed. No other fees or commitment charges are levied. Description of charges Personal Loans Loan Processing Charges / Origination Charges 2* % of loan amount + Origination Charges of 1% of loan amount Prepayment Charges 5% on the principal outstanding Charges for late payment (loans) 2% per month Cheque Swap Charges Rs. 500/- Cheque bounce Rs. 200/- 33
  34. 34. T.Y.BBI PERSONAL LOAN charges Note: 1) Origination Charges are included in the Advance installments/ First installment. 2) Service Tax and other govt. taxes, levies, etc. Application Process 34 Information Application to bank Processing application Documents Verification
  35. 35. T.Y.BBI PERSONAL LOAN Key Benefits 1. Small business loan with no mortgage and no security required 2. The loan is provided in the form of overdraft, letter of credit or bank guarantee and you can borrow upto a maximum of Rs. 25 lacs. 3. Faster sanction. 4. Flexible payment scheduled- Part payment or Pre payment. 5. One stop solution with a bouquet of products. Security Personal loans are very flexible. They do not required collateral securities or assets banking. They are disbursed based purely on the financial of the loan applicant. Additionally your spouse income can be considered in calculating the loan amount provided he/she guarantees the loan or the loan is taken 35 Sanctioning of loan Loan agreement Disbursement of loan Repayment
  36. 36. T.Y.BBI PERSONAL LOAN jointly. Loan Repayment Personal loan are repaid in the of Equated monthly installments. EMI are calculated based on the loan amount, the rate of interest and the tenure of the loan. “Banks calculate interest using the reducing balance method. The actual interest is calculated on a daily reducing balance” Transferability If your lender is charging a high rate on your loan and you are able to find another bank willing to lend at lower rate, you can transfer loan to the new bank and thereby reduce the cost of your loan. Advantages and disadvantages of different loan programs Loan Program Advantages Disadvantages Fixed-rate mortgages Predictable monthly payments Less risk if market conditions cause rates to rise Rate does not change You pay more in interest Higher interest rate Unable to take advantage of lower interest costs if market changes to lower rates Adjustable rate mortgages Flexibility Lower initial monthly payment You pay less for short term ownership May be easier to qualify for higher loan amounts More risk Inability to predict future housing costs Potential higher payments (at max. interest rate) Stated income mortgages Don't need to verify income Higher rates Need a low LTV to qualify 36
  37. 37. T.Y.BBI PERSONAL LOAN Combination loans (such as an 80/10/10) Avoid PMI Potential tax advantages Possibly higher monthly payments Two monthly payments instead of one Combination loans (such as an 80/10/10) Avoid PMI Potential tax advantages Possibly higher monthly payments Two monthly payments instead of one Home equity line of credit Flexible access to funds Potential tax advantages You only draw what you need You only pay interest on what you borrow Ties up equity making it unavailable for other needs Higher interest rate than a first mortgage Home equity loan Predictable fixed payments Possible tax advantages Ties up equity making it unavailable for other needs Higher interest rate than a first mortgage Cannot pay down and withdraw additional funds Types of Personal Loans On the basis of mode of repayment, personal loans are of three types - installment loans, balloon loans and single payment loans. Installments loans are repaid in the form of monthly installments. The monthly installments carry both the principal and the interest elements of a loan amount. In case of balloon loans, interest is paid at regular intervals and the principal amount is repaid at the end of the loan period. In case of single payment loans, the entire principal as well as its interest is paid at the end of the loan period. Installment Loans: Installment loans are paid in regular amounts on a schedule, usually monthly, until the loan amount is repaid. There are no closing fees associated with installment loans. Single Payment Loans: In this loan, the entire amount of the loan is 37
  38. 38. T.Y.BBI PERSONAL LOAN due at the end of the loan period. This is probably the most familiar kind of loan to most people, where the entire sum of the loan is paid back at once, only with interest. Balloon Loan: Similar to single-payment loans, balloon loans sometimes allow more than one payment, but generally have most of the amount due at the end of the loan period. On the basis of mode of repayment, personal loans are of three types - installment loans, balloon loans and single payment loans. Installments loans are repaid in the form of monthly installments. The monthly installments carry both the principal and the interest elements of a loan amount. In case of balloon loans, interest is paid at regular intervals and the principal amount is repaid at the end of the loan period. In case of single payment loans, the entire principal as well as its interest is paid at the end of the loan period. 38
  39. 39. T.Y.BBI PERSONAL LOAN HSBC Bank offer wide range of personal loan like:- Home renovation or other home related expenses. Marriage expenses. 39
  40. 40. T.Y.BBI PERSONAL LOAN Travel expenses. Education expenses. Transferring an existing loan from another bank. Purchasing consumer durables or equipment. Retiring other debts. Any other personal needs and contingencies. Flexibility to choose the EMI dates - 1st or 10th of every month FEATURES Flexible personal loan tenor of up to 5 years (i.e. 12, 18, 24, 36,42, 48 and 60 months). Personal loans available from Rs. 50,000 up to Rs.15,00,000*. Easy monthly repayment through Equated Monthly Installments (EMI) with 40
  41. 41. T.Y.BBI PERSONAL LOAN post-dated cheques or direct debit to your bank account from HSBC India. Transfer of an existing personal loan from another bank to HSBC India, at attractive interest rates. No collateral/guarantor requirement. Easy documentation, quick processing and disbursal. Hassle free personal loan based on 12 months credit card/retail loan track record. Eligibility Criteria: 1. Applicant can be salaried / self-employed individuals and should be a resident Indians. 2. Professional self-employed individuals eligible for a personal loan are Doctors, Chartered Accountants, Cost Accountants, Company Secretaries, Architects, Engineers and Management Graduates. 3. The minimum age of the Applicant / Guarantor should be 21 years for salaried and self-employed individuals. 4.The maximum age of the Applicant / Guarantor at loan maturity should be 58 years for salaried individuals (60 years for Central Govt. employees) and 65 years for self-employed individuals. 5. The minimum years in continuous employment / business should be 1 year for salaried individuals and 2 years for self-employed individuals. 6. The minimum net annual income should be Rs.75,000 p.a. (including co- applicant's or applicant's income) for salaried and self-employed individuals. 41
  42. 42. T.Y.BBI PERSONAL LOAN 7. The minimum stay at current residence should be 1 year for salaried and self-employed individuals. Terms and conditions apply. All loans at the sole discretion of The Hong Kong and Shanghai Banking Corporation Limited, India. Loans available for applicants and properties in and around the limits of cities where HSBC has branches and is subject to change from time to time. Documents For salaried individuals 1. Latest salary slips showing statutory deduction. OR 2. Form 16 (declaration from employer giving details of income and deduction, duly signed by an authorised signatory of the company. 3. Latest acknowledged IT returns and 4. Bank statement for the last three months For self-employed individual 1. Computation of income for last two year certified by a CA. 2. P/L and balance sheet for the last two years certified by a CA. 3. Copy of acknowledged IT returns for the last two year. 4. Bank statement for the last six months. Photo identity (anyone) 1. Passport 2. Photo pan card 3. Defense identity card 4. Voters identity card 5. Driving license 6. Photo ration card 7. Government identity card. Proof of residence (anyone) 42
  43. 43. T.Y.BBI PERSONAL LOAN 1. Passport 2. Ration card 3. Telephone bill 4. Electricity bill 5. Driving license 6. Society out going bill 7. Voter ID 8. Life insurance policy Note : Only passport can be used as both proof of individual identity and proof of residence address Proof of age (anyone) 1. Passport 2. Driving license 3. Voter ID 4. School living certificate 5. Photo ration card 4 easy ways to repay personal loan 1. lower EMI in the first year • You can start by repaying an amount you can afford today. • After a year, you can pay a higher EMI. 2. Interest on utilise loan amount only , not on the entire loan • Simply estimate the maximum loan amount you need. You can 43
  44. 44. T.Y.BBI PERSONAL LOAN withdraw money as when you need and interest will be charge only on the amount you withdraw. 3. Last EMI waiver • This repayment option gives you the benefit of getting a last EMI refunded by paying a marginally higher interest rate (available for loan of 48 months tenor only an applicable if you repayment is consistent throughout the period of the loan. 4. Standard EMI repayment • Your EMI for each month will be the same for the tenor of the loan. Survey Report I have done a customer survey from 1st Aug., to 31st Aug., 2007 about personal loan provided by the banks in that survey I have asked a few questions to the people and I have got following results: Are you aware of the personal loan? 44
  45. 45. T.Y.BBI PERSONAL LOAN 0 20 40 60 80 100 Aware Unaware Aware Unaware Do you plan to pursue personal loan in future? 0 10 20 30 40 50 60 70 House Education Car Other House Education Car Other Which bank would you like to prefer for pursuing personal loan? 45
  46. 46. T.Y.BBI PERSONAL LOAN 0 20 40 60 80 100 Private Public Foreign Private Public Foreign What type of interest rate would you prefer? 0 10 20 30 40 50 60 70 Fixed Floating Fixed Floating How much importance has the personal loan assume? 46
  47. 47. T.Y.BBI PERSONAL LOAN 0 10 20 30 40 50 60 70 Low Moderate High Low Moderate High Do you think the procedure for personal loan is_ 0 10 20 30 40 50 60 70 Convenient Lenghty Convenient Lenghty Frequently asked question 1. What are the minimum and maximum loan amounts? 47
  48. 48. T.Y.BBI PERSONAL LOAN You can avail of loans ranging from Rs 20,000/- to Rs 15,00,000/- depending on your eligibility, income and repayment capacity. 2. What are the loan tenure options? The loan can be repaid over a period of 12 to 60 months. 3. Are there any additional charges? A processing fee of 2% of the loan amount is payable upfront. This fee will be deducted from the disbursal amount payable to you. 4. How much time will it take for my loan to be approved? Loans are approved within 72 hours of submission of complete documentation. 5. Do I have to provide any security, collateral or guarantors? No security, collateral or guarantors are required for obtaining a Personal Loan. 6. How do I repay the loan? You can repay the loan in Equated Monthly Instalments (EMI's) through post-dated cheques favoring ICICI Bank Limited, or if you have an ICICI Bank account you can mandate us to directly debit the same. 7.Can I prepay my loan? Yes, you can prepay the entire loan outstanding anytime after 180 days of availing the same. Prepayment charges as applicable would be levied on the outstanding loan amount. No part prepayment is allowed. 48
  49. 49. T.Y.BBI PERSONAL LOAN 8. Do I need to open an account with ICICI Bank for availing and/or servicing the loan? We will encourage you to start a banking relationship with us so that we will be able to offer a host of other value added services, which are complementary to the loan, however opening an account with us is not mandatory. 9. How do I approach ICICI Bank for a Personal Loan? You can approach us in any of the following ways • 24 hour Customer Care Centre • Apply Online • • You can just walk into any of any branches. 49