What is the difference between secured and unsecured loans?
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A secured loan requires you to pledge an asset (like property, gold, or a vehicle) as security for the loan. If you fail to repay, the lender can use this asset to recover the amount.
An unsecured loan, on the other hand, doesn’t need any collateral. Examples include personal loans or credit cards. However, unsecured loans often come with higher interest rates due to the higher risk for the lender.
How do I know which type of loan is right for me?
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The right loan depends on your purpose, repayment capacity, and risk tolerance.
How can I improve my credit score before applying for a loan?
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Pay all EMIs and credit card bills on time.
Avoid applying for too many loans or cards at once.
Keep your credit utilization below 30% of your limit.
Regularly check your credit report for errors.
Maintain a balanced mix of secured and unsecured loans.
What is the ideal debt-to-income ratio for loan approval?
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Most lenders prefer a debt-to-income (DTI) ratio below 40%.
This means your total monthly loan EMIs should not exceed 40% of your monthly income. A lower ratio indicates better financial health and higher chances of loan approval.
What are fixed and floating interest rates?
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Fixed Rate: The interest rate remains constant throughout the loan tenure, giving stable EMIs.
Floating Rate: The rate changes as per market conditions or RBI policies. EMIs may increase or decrease accordingly.
Choose fixed rates for predictability and floating rates if you expect interest rates to fall.
What documents do I need to apply for a loan?
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Typically, you'll need identity proof, address proof, income documents, and bank statements. Our team will guide you through the exact requirements.
How does inflation affect personal finance and borrowing?
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Inflation erodes purchasing power, making money worth less over time. When inflation is high, lenders may increase interest rates to compensate for the reduced value of future repayments. This can lead to higher borrowing costs. It's important to consider inflation when planning long-term loans and investments.
Can I apply for multiple financial products at the same time?
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Yes, but applying for multiple loans or credit cards simultaneously can lower your credit score.
Each application triggers a “hard inquiry”, which may signal risk to lenders. It’s best to apply selectively and only when necessary.
Can I apply for a loan with a low credit score?
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Yes, we evaluate applications holistically. While credit score matters, we also consider your income stability, repayment capacity, and overall financial profile.
What types of loans do you offer?
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We offer personal loans, business loans, home loans, vehicle loans, and education loans tailored to meet diverse financial needs.
Is there a penalty for late EMI payments?
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We encourage timely payments, but understand emergencies happen. Minimal penalties apply for late payments, and we offer flexible repayment options if you're facing difficulties.