The happiness in clearing off a loan is palpable. We plan, work, save and stay disciplined to avoid missing any EMI repayments, only to clear off the loan at the earliest. This does 2 things. It makes you debt free and improves your credit score. Therefore, the opportunity to clear your loan ahead of the full tenure can let you enjoy the above 2 benefits much earlier.
Some banks just don’t allow pre-closure of your loan. It is not just a standalone hassle that confronts us when dealing with banks. The heaps of paperwork, running from one counter to another, getting the long list of documents sorted, arranging copies of documents, spending hours sitting with the agent, filling-up the application forms, etc. The banks that do allow pre-closure, in turn levy a prepayment penalty. A prepayment penalty hurts badly.
In today’s post Loan Singh answers the question “What is Prepayment Penalty?” We also look at Loan Singh’s online personal loan application process, the post approval process and how you can pre-close your personal loan without being penalized.
At times of financial emergency, there is no better alternative to availing a personal loan. A personal loan is a type of unsecured credit that is generally availed to meet urgent financial needs. Being an unsecured credit, personal loan requires no collateral or mortgage. The next question you would have is, “With no collateral, how does Loan Singh trust a prospective borrower?”
Loan Singh does not meet the applicant face-to-face, like traditional lending solutions. Loan Singh does take a risk when screening applicants for eligibility. Everything, from loan application to amount disbursement, happens online and to mitigate the risk, Loan Singh looks at your credit worthiness. If you have a good credit history, you have a better chance of avoiding a personal loan rejection with Loan Singh. Your credit history tells Loan Singh how prompt you have been with your past loan or credit card related responsibilities. Availing a personal loan via Loan Singh is advantageous because there is minimal paperwork involved and no time is wasted in cross verifying any paperwork. Your employment status and income help determine if you are capable of paying the loan repayment EMIs on time, or not.
The personal loan amount, along with interest rate, is calculated for the entire tenure. In case you want to clear-off the loan before tenure completion, no prepayment penalty is levied by Loan Singh.
There can be various purposes for availing a personal loan. Some of them are
- Medical expenses
- Festival celebration
- Debt consolidation
- Second hand car
- House repairs (which offer tax benefits, as well)
- Online shopping
- International holiday travel
- Job promotion/relocation
- Home improvement
Loan Singh Eligibility
Just like in banks, there is a set of eligibility criteria at Loan Singh, as well; albeit a short one.
Indian and salaried – You must be an Indian citizen and be earning a minimum of Rs.15000 per month.
Good score and age – Have a good enough credit bureau score to help Loan Singh gauge your repayment capabilities. If you have no credit history, then you must be salaried for at least 3 months. You must be at least 21 years of age.
No collateral means you can apply for a personal loan for the above purposes and more; even if you do not own any assets. No loan guarantor is needed. No storage needed for piles of paperwork.
You are a salaried individual and chances are that your salary will continue to rise in the forthcoming months and years. Use this impetus to plan your repayments to avoid any delay in repayments and defaults.
Loan Singh Application Process
Not only is a personal loan the best alternative for quick funds, Loan Singh’s quick and easy application process also helps you get the funds you need for any financial emergency. The process to get an easy and quick loan with Loan Singh is mentioned below:
If you find yourself fitting Loan Singh’s criteria, log on to www.loansingh.com and apply for an online personal loan. You will need to keep your Aadhaar, PAN and bank details handy. Here is how the process goes.
Get started page – Select ‘PERSONAL LOAN’ from the dropdown and enter the loan amount with the desired repayment tenure.
Registration page – Add your contact number, personal email ID, and corporate email ID
Profile page – Fill in your name, gender, Father’s name, number of dependents, and PAN details. We use your PAN Card Number to check your Credit Score.
Address page – Choose your type of residence, and mention your street address, city, state and pin code.
Job profile page – Mention your current designation, total work experience, company name, highest qualification, last institution attended, and monthly salary.
Financials page – Upload your latest 6 months bank statement (in PDF format) either from your computer, GMail account or net-banking account directly. Our net-banking partner is ISO 27001 (2013 standard) certified & provides services to banks, as well.
Auto debit page – Provide permissions to your bank name, account number, and IFSC code so that Loan Singh can auto debit the EMI amount from your account every month. This way you don’t need to set reminders or miss out on any loan EMI payments.
Loan Singh Post Application Process
So, your application for a loan gets accepted and evaluated. What’s next? Well, it’s time to find out if your impatient biting of nails has been rewarded or not!
Every borrower, whose personal loan application is ‘Approved’ or ‘Rejected’, gets notified via an email. It is obvious that a digital lending platform, such as Loan Singh, will make use of digital means to inform borrowers about any event. Sometimes, borrowers are found eligible but fall short of an approval due to a missing piece of information or incomplete data. Such borrowers are intimated via an email, SMS and phone call. Just like the US Military slogan ‘never leave a man behind’, Loan Singh also tries everything to get a credit worthy borrower to avail a personal loan. In case your personal loan is approved, the sanctioned loan amount is transferred to your listed bank account via NEFT/RTGS payment mode. Netbanking is the fastest, secure and most commonly used mode of fund transfer. It is also advisable to provide Loan Singh with your latest bank statement PDF via your netbanking account. The disbursed loan amount is dependent on your income.
Loan Singh’s platform allows borrowers to view all of their loan related information at one place. Each borrower can log on to his/her dashboard and keep track of EMIs paid, the balance amount pending, loan tenure and EMI due-dates.
Borrowers can make loan EMI repayments via netbanking or NEFT. Netbanking, being swift, is the best method. You wouldn’t want to miss-out on the EMI payment due-date, would you? Providing an NACH mandate to Loan Singh authorizes Loan Singh to deduct the monthly EMI amounts directly from your bank account. This auto debit feature ensures you don’t ever have to miss any EMI. In case you miss out on any EMI, Loan Singh will then levy a penalty.
Loan Singh does not levy any prepayment penalty, in case you want to close your loan before tenure completion. So, what exactly is prepayment penalty and what is its role in offline or traditional banking methods?
A ‘prepayment’ is simply a facility provided by Loan Singh, and lending institutions, to close a loan earlier than the pre-determined tenure. Banks charge penalties for early closure of loans, to protect themselves against the loss of interest that would have been paid by the borrower. The prepayment penalty is added as a way to recoup the cost of loan management.
Borrowers choose to pay-off the loan when the principal amount left is small, and the borrower wants to save whatever interest he/she can save by paying-off the loan early. Banks set-up a lock-in period in their loan contracts. During this time, borrowers cannot pay-off the loan. After this is completed, borrowers can opt for a prepayment. Prepayment is also allowed if the borrower decides to switch banks to gain benefits of a lower interest rate at the other bank. Borrowers switch banks to refinance their loans at a lesser rate of interest, if available.
Post availing a loan, an increase in salary or a windfall received, may lead to an income increase and encourage you to close-off the loan ahead of tenure. Therefore, it is advised to read along the fine print on a bank loan contract. Discuss all points that concern you, including the difference in charges between paying the loan off via the borrower’s own sources and refinancing from another bank. Or, just don’t borrow from a bank and come to Loan Singh.