A personal loan is a loan granted by banks for a wide variety of private purposes. In addition to the various advantages, there are, as certainly with most things, some disadvantages associated with personal loan.

This article discusses specifically about personal loan for 18000 income earners and various frequently asked questions by such individuals.

Yes. There are many types of lenders who can offer personal loan for 18000 income as follows:

(1) Public sector banks
(2) Private banks
(3) Co-operative banks
(4) Foreign banks
(5) Regional rural banks
(6) Small finance banks
(7) Payment banks
(8) Mobile wallet companies
(9) Private money lenders
(10) Peer to peer money lenders

There are four ways to get personal loan for an individual earning Rs. 18000 income in India:

(1) Secured Loan: Offered against securities and has low interest rate. Getting a secured personal loan is considered to be the most easier, as the applicant has to keep his/her assets such property, fixed deposit, shares, mutual fund, gold and LIC policy as a collateral with the lender and get personal loan against these securities. Depending on the value of the collateral, loan amount is calculated.

(2) Unsecured Loan: This is a regular personal loan offered without any collateral and has high interest rate. But in case of personal loan without collateral also called as unsecured loan, getting a loan is difficult as the applicant has to meet various eligibility criteria such as minimum income, age, type of occupation and most importantly the credit history. However the loan amount offered is high. And typically loan is granted to individuals earning higher income because their repayment capacity is assumed to be good and are less likely to default.

(3) Instant Loan: These are typically offered by mobile wallet companies such as Paytm, MobiKwik, and others. However the loan amount is very small but cheaper too, as the interest rate is very low.

For e.g. if the loan amount is Rs. 60,000 taken for a period of 3 years, then the EMI will be Rs. between Rs. 2051 at an interest rate of 15%.

(4) Private Loan: A private loan is also taken out for a wide variety of purposes and is therefore very versatile. A loan from a private individual, on the other hand, is granted by a private individual. This means that the granting of a loan is completely on a private basis and there is no bank in between. These are offered by government approved lenders or individuals or peer to peer lending companies.

Here’s the table showing list of lenders offering personal credit to 18000 monthly income earners:

Individual earning Rs. 18000 or less and requiring higher loan amount then regular or conventional or unsecured personal loan is the best option.

Advantages: A personal loan can be used, for example, to finance your wedding and/or medical emergency, to buy a new bedroom furniture or to finance small business. That is, the loan amount can be used in many different ways, as it is a so-called unrestricted loan.

Disadvantages: On the other hand, it is disadvantageous that banks usually grant a higher interest rate for an unrestricted personal loan. The reason for this lies in the fact that in the event of a default on the part of the borrower, the credit institution has to bear the loss.

When we take out a personal loan, the whole process involves a series of expenses in addition to the interest rate. The best idea would be to negotiate with the lender to try to reduce these expenses so that you have to pay as little as possible.

Here are the 5 ways that can help low income earner to save money on personal loan:

(1) If the loan amount required is less then opt for instant loan or secured personal loan, as the interest rate is low.
(2) Always bargain with the lender to lower the interest rate. Especially if you are existing customer of the bank.
(3) Depending on personal creditworthiness and income, it is also possible to agree the length of the term with the bank within certain limits.
(4) Request lender to not charge loan processing fees, early loan closure.
(5) Try to increase the EMI and reduce the tenure. This eventually is a big money saver.

Author Bio:

Hi, I am Nikesh Mehta owner and writer of this site.

I’m an analytics professional and also love writing on finance and related industry. I’ve done online course in Financial Markets and Investment Strategy from Indian School of Business.

I can be reached at nikeshmehta@allonmoney.com. You may also visit my LinkedIn profile.