Tag: personal loan

Know Banks to offer Personal Loans through ATMs at Letzbank

Most of us who have had long standing relationship with a certain bank/s have received a call from the customer care offering a pre-approved personal loan. The competition between lending agencies has intensified so much that sometimes a long and reliable relationship is also not required or requested! Well, now the banks are ready to take the offer of personal loan a notch higher making it further easy and simple to avail it- by offering it through their ATMs. Before we tell you how the system is expected to work, let us first touch upon the very concept of personal loans.

What are Personal Loans

Personal loans are a category of loans that are meant for meeting personal expenses and emergencies. The best part about personal loans is that they can be put to use for plethora of purposes. Right from medical emergencies to your dream vacation, you can avail personal loan for just about anything. In some cases the bank may specifically debar certain uses of the loan money; same shall be mentioned in the loan document. With heavy competition to tap retail market such riders have become truly rare. Banks are now only interested in timely repayment of the loan amount. Personal loans are short term loans and need to be paid back within a year.

Advantages of Personal Loans

  • Extremely easy to avail as there are almost no conditions attached except repayment and tenure
  • Very quick processing time which makes these loans ideal for emergencies
  • Personal loans can be used for any personal use without giving an explanation to the lender
  • Minimum paper work and documentation
  • Available at competitive rates

Disadvantages of Personal Loans

  • They are available only for the duration of one year
  • Compared to other loans, the interest rate on personal loan is higher
  • Pre-closure and advance payments are usually not allowed or only allowed upon payment of penalty and charges.
  • Easy availability leads to misuse of these loans in the hand of borrowers.

Now that we have discussed the Pros and Cons of personal loans, let us move on to the new initiative taken by banks to offer personal loans through ATM.

How will it Work?

Usually you visit ATM to withdraw money or check your balance. Now every time you avail the service of ATM, after the transaction is over the ATM screen will flash the offer of instant personal loan to you. If accepted, it will immediately disburse the loan to you. This is a rather easy thing for banks to do and all they need is, robust software to handle ATMs across India. Usually bank has all important information about its clients and account holders. It is on the basis of this information that the banks offer personal loans. Their metrics computes the loan amount based on income earned, average account balance maintained, average spending on credit card and credit history of the account holder. With the introduction of new system, this information will be patched to your account number and recognised every time you use your debit or credit card.

Reason behind the move

There are certain well founded reasons behind this initiative. The first one being capturing the retail market which is presently flooded with borrowers who are availing mainly vehicle or home loan. Personal loan is still a category that does not interest a lot of people. Many borrowers are not even well aware of this category of loan. Secondly, the demand for corporate finance has remained and continues to remain flat. The only growth that is being seen is in personal finance at retail level. This move will reduce the queue for loan at banks thereby relieving a lot of man hours that can be put to better use.

For non-Clients

If a person who does not have any relationship with a particular bank yet wants to avail a personal loan then he or she can swipe any bank’s card in the ATM and request a call back by giving contact number.

Advantages and Disadvantages of the Move

At the very outset, personal loan through ATM has numerous advantages. It will over simplify the procedure and reduce congestion at the banks. Even persons who do not have any relationship with the bank will be able to approach and get in touch with their customer care without setting a foot in the bank. There is no time lag owing to loan processing, just press yes and receive the loan amount.

The main disadvantage is handling the cash amount in the ATM. A big amount getting dispensed catches eyeballs and can put the borrower at risk. The over simplification of the process may lead to incessant borrowing and misuse of funds. For those lacking financial discipline, instant personal loan could create a financial mess.

Withdrawal of personal loan from ATM is a big move by the banking sector and should fuel spending in retail sector. If withdrawing personal loan from ATM does not make you feel comfortable, visit us on letzbank where we get all categories of loan including personal loans, under one roof. Compare attractive offers from various well known names in the lending sector. If still in doubt, get in contact with our customer care for clarifications. We also have useful and innovative products other than loans like online Return filing platform in tie up with Clear Tax and Credit Score report powered by Experian. We also have an eligibility calculator which gives you an idea about the loan amount that you can apply for. Letzbank is your one stop shop for loans and returns. Visit us today and buy the dreams of tomorrow with our loans that take care of every occasion and need!

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Advantages of borrowing Home loan top-up at Letzbank

Did you know that borrowing Home Loan Top-Up can be better decision to make than to borrow Personal Loan or Business Loan – Know how:

What is a Home Loan TOP-UP: Home loan top-up is a loan that can be borrowed over an existing home loan. Home loan top-up is offered to reliable customers who have sincerely made payments of the home loan they had borrowed. Bank would offer such reliable customers a top-up over the housing loan amount that has been paid thus far. Home Loan Top-up can be borrowed without any pre-condition therefore they are easy to be borrowed to meet any financial requirement be it a personal or even a business requirement. Let us know in detail why borrowing a Home Loan Top-up a better deal than borrowing a personal loan or business loan.

  1. Home Loan Top-Up are offered to existing customers: Since Home loan top-up are offered to existing customers therefore, there is no question of you being eligible or not to borrow a home loan top-up. You are eligible to borrow a home loan top-up if you are an existing home loan customer. However, you need to still meet the bank’s criteria to determine if you are eligible for home loan top-up on your existing home loan. You should have paid your home loan EMI for a minimum period of 2 to 3 years for you to apply for home loan top-up. Since you had already submitted your KYC documents and other necessary details or documents and the banks would have verified the same at the time of granting you the loan therefore, no further verification is required.
  2. Home Loans are offered at lower interest rates as compared to Personal Loan or Business Loans: if you compare various interest rates you would find that the home loan interest rates are lower than all the other loans as the home loans are offered at 8.35% to 12.50% per annum. On the other hand personal loans are offered at 10.85% upto 24% per annum. Business loans are offered at rate of interest starting from 14% upto 24% per annum. The comparison shows that given an option Home Loan Top- up is a better deal to grab than any personal loan or business loan.
  3. Home Loans can be paid over long loan tenure: We are all aware of the fact that home loans are offered for a really long tenure that can be extended upto 30 years. On the other hand personal loan and business loans are short termed loans that can be borrowed for loan tenure of 3 to 5 years max.
  4. Home Loan top-up can be availed at Low processing fee cost: Unlike processing fee of personal loan and business loan the processing fee required to borrow a home loan top-up is relatively lower. Processing fee to borrow personal loan or business loan is upto 3%, whereas the processing fee to borrow home loan to-up is 0.35% to 1%.

The article proves that given an option Home Loan Top-Up is a better deal to grab than borrowing any Personal or Business Loan.

Why credit Score is the only number you should be concerned with? at Letzbank

The credit score of a person is the sum of your entire repayment history. This credit score is determined by your debts, loans, missed payments, credit card and number of loans. The highest score is 900 and if your score is 750 and above that you are said to be within the Low Risk bracket. Therefore, higher the credit score lower is the risk involved while disbursing the loan and therefore higher is your eligibility. The credit score changes depending on your spending choices. So explore with us everything about the credit score in this article.

Why is your Credit Score Important?

Some of the reasons why the credit score is very important are that –

  • It is one of the factors that would determine whether or not your loan application will be approved. If your credit score is high it simply indicates to the banks that you can be trusted with the loan repayment.
  • Having a good score helps you in fetching loans at low rate of interests and therefore low EMI.
  • The credit scores and records are permanently saved on the portal and showcase your entire history. So make sure you have a good clean score.

How to improve the credit score?

  • Always make sure that you pay your bills on time. There are a number of simple ways to track your payments such as writing sticky notes on the fridge, maintaining a calendar of things to do, put a phone reminder or something but pay your bills on time
  • Do not use your credit card to more than the credit limit you can pa back, because small ratios are better for rating.
  • Even if you had a debt on you and you paid it out, don’t try to remove or delete that record, because it will be great for the banks to see that you did clear off your debts and didn’t keep it pending and unpaid
  • Don’t apply for multiple loans or credit cards all at the same time. Because if it gets declined also it gets recorded and has a risk of lowering your score
  • Have your name only for your accounts and not let others use your accounts. Because even though it’s not you the credit company will not know, so you will fall into trouble.

 

So these are few of the most important things to know about the credit score and why exactly it is such a serious thing. Remember that it is a long process to get the score back to good and so try your maximum best to not come under the risk bracket. If at all you find that your credit score is not that good, you can rectify your credit score by availing an expert help of organisations such as Credit Clear and your score can be improved. Hope this article was helpful for you all.