Private Loans in India are unsecured loans, also commonly referred to as personal loans. These loans are offered by banks, Fintech lenders, P2P lending startups, and select lenders that operate privately. If you are a potential consumer looking to get access to credit, approaching the right lender for your private personal loan is extremely important. In this article, we look at which type of lender to approach if you’re looking for an unsecured loan in India.
We go on to evaluate various parameters that will help you select the right type of lender for private loans in India.
Choosing a bank for Private Loan in India
Choosing a bank can be the best idea if you have an impressive credit outlook and you’re willing to wait at least 1 week to get your loan disbursed to your account. The good part about choosing a bank is that banks are often known to offer the lowest interest rates on secured as well as unsecured credit. It is private banks (the popular ones) that usually offer the best (lowest) interest rates in the market.
But if your requirement isn’t immediate, you can wait a while and you have a really impressive credit outlook, it makes sense to approach a private bank. However, private banks have more rigid eligibility requirements that consumers have to meet. For instance, if you don’t have at least 2 years of employment experience and your employer (company/organization) is unlisted or uncategorized, your application is most likely to face rejection. Note that rejections can hamper your credit score, and prompt other lenders to reject you as well. Moreover, too many credit inquiries is something every customer has to avoid in order to improve his/her approval chances for both secured as well as unsecured credit.
Choosing a Fintech lender for a Private Loan in India
If your loan requirement is immediate, your credit outlook is average or slightly above average, and your employment experience isn’t all that vast, choosing a Fintech lender makes more sense than approaching a bank. Here are some advantages of choosing a Fintech lender such as Qbera for private personal loans in India.
You can get approved even with a sub-prime credit score. The minimum credit score that you must meet to be eligible for private loans from Qbera is 600. Most private banks need you to have a minimum credit score of at least 750 to qualify.
The interest rates offered by Fintech lenders and private banks are more or less similar – Fintechs are known to offer slightly higher interest rates for a lot of reasons. While this is true, note that there isn’t going to be a big difference in your monthly repayment amounts with a difference of 3-4% in the offered interest rate. Meaning, if you’re being offered an interest rate of 11% with a top private bank and an interest rate of 16% with a lender like Qbera, there isn’t going to be a massive difference in your monthly repayment amounts. Moreover, you can get approved with a low-income level, and also if your employer is unlisted or uncategorized.