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Your PAN card is linked to every loan and credit product you take in India, including personal loans, credit cards and BNPL services. Since lenders report all borrowing activity against your PAN, checking loans linked to it regularly can help you track your active credit accounts and spot any suspicious activity. 

When we use lending, we see more cases of people misusing our PAN cards and pretending to be us. A lot of people do not even know that someone has taken a loan in their name until their credit score goes down suddenly, or they start getting calls to pay back the loan. This is why it is an idea to check your credit report from time to time to make sure your money is safe. 

So if you want to know how to check which loans are linked to your PAN card this guide will tell you everything you need to know about the ways to do it the steps you need to follow and what you should be careful about when checking loans, on your PAN card. 

Why Should You Check Loans Linked to Your PAN Card? 

Checking active loans linked to your PAN card is important not only for tracking your finances but also for protecting yourself from fraud and credit-related issues. 

1. Detect Fraudulent Loans Early 

Cyber fraud and identity theft cases have increased significantly with the rise of paperless lending. Fraudsters may misuse stolen PAN details to apply for instant loans without the owner’s knowledge. 

By checking your credit report regularly, you can quickly identify suspicious accounts and take corrective action before the issue affects your creditworthiness. 

Let’s suppose you apply for a home loan and suddenly discover your credit score has dropped due to unpaid EMIs on a loan you never took. Checking your credit report earlier could have helped identify the fraudulent account sooner. 

2. Track Your Overall Debt 

Many borrowers today use multiple forms of credit simultaneously — such as personal loans, credit cards, BNPL services and consumer durable loans. 

Keeping track of all active loans helps you: 

• Understand your total liabilities  

• Plan your monthly budget better  

• Avoid over-borrowing  

• Improve debt management  

According to TransUnion CIBIL insights, younger borrowers in India increasingly rely on multiple short-term credit products, making regular credit monitoring more important than ever. 

3. Maintain a Healthy Credit Score 

Your repayment history accounts for a major portion of your credit score calculation. Even a missed EMI on a forgotten loan account can negatively impact your score. 

Regularly reviewing your loan accounts helps ensure: 

• EMIs are being updated correctly  

• Closed loans are marked as closed  

• No incorrect defaults are reported  

A healthy credit score can improve your chances of getting loans approved at better interest rates. 

4. Improve Loan Eligibility 

Banks and NBFCs assess your existing debt before approving new loans. If your credit report shows high liabilities or unknown active accounts, your loan eligibility may reduce. 

Checking your active loans helps you plan future borrowing more strategically. 

For instance: If you are planning to apply for a car loan, knowing your current debt obligations can help you reduce outstanding balances beforehand and improve approval chances. 

5. Identify Reporting Errors 

Sometimes lenders mistakenly report incorrect information, such as: 

• Closed loans marked as active  

• Wrong outstanding amounts  

• Incorrect payment delays  

Such errors can affect your credit score if left unresolved. Monitoring your credit report allows you to raise disputes quickly. 

What is PAN Card Fraud or Misuse? 

Any instance where your PAN information is used to forge your identity or gain access to financial products or accounts is considered PAN card fraud. These incidents have become more common with the increasing use of PAN for KYC verification across banking and lending services. 

Some common ways fraudsters may misuse your PAN card include: 

• Applying for loans in your name  

• Opening bank accounts using your PAN details  

• Renting hotels or vehicles using your identity  

• Using your PAN card for VISA verification  

• Attempting unauthorised withdrawals or fund transfers  

Fact: 
PAN card details are frequently targeted in phishing scams where fraudsters impersonate banks, lenders or KYC officials to collect sensitive information. 

If such misuse goes unnoticed, it can negatively affect your credit score and financial credibility. 

How to Check Active Loans on Your PAN Card 

There are multiple ways to check all loans linked to your PAN card. Here are the most reliable methods: 

Method 1: Via Credit Bureau Websites (CIBIL, Experian, Equifax, CRIF High Mark) 

India has four RBI-authorised credit bureaus that maintain your credit history and loan records. By accessing your credit report, you can view all active loans associated with your PAN. 

Steps to Check Active Loans via Credit Bureau Websites 

Step 1: Visit the official website of any credit bureau 

Step 2: Register using your PAN card details, mobile number, email ID and date of birth 

Step 3: Complete OTP verification 

Step 4: Log in and access your credit report 

Step 5: Review the ‘Accounts’ or ‘Loan Details’ section to check all active loans 

If you are already registered, you can simply log in to access your report directly. 

Credit Bureau Quick Reference Table 

Credit Bureau	Official Website
TransUnion CIBIL	www.cibil.com
Experian India	www.experian.in
Equifax India	www.equifax.co.in
CRIF High Mark	www.crifhighmark.com

For example: 
If your report shows a personal loan from a lender, you never interacted with, it could indicate identity theft or unauthorised borrowing. 

Method 2: Via the Lender’s Net Banking or Mobile App 

Most banks and NBFCs allow borrowers to check their loan details through net banking portals or mobile apps. 

Steps to Check Loan Status via Lender Apps 

1. Log in to your lender’s mobile app or internet banking account  

2. Navigate to the ‘Loans’ or ‘My Accounts’ section  

3. Select the active loan account  

4. View details such as outstanding amount, EMI schedule, tenure and repayment history  

This method is useful if you want to track a specific loan account with a particular lender. 

Example: 
A borrower with both a home loan and personal loan from the same bank can monitor EMI due dates, repayment history and prepayment options through the bank’s app itself. 

Method 3: Via Fintech Apps 

Several fintech platforms and financial management apps provide access to your credit profile and active loan details after consent-based verification. 

Steps to Check Loans Using Fintech Apps 

1. Download a trusted fintech or credit monitoring app  

2. Register using your PAN number and mobile number  

3. Verify your identity via OTP  

4. Access your credit profile dashboard  

5. Review your active loans and credit accounts  

These apps often provide additional insights such as: 

• Credit score tracking  

• Repayment reminders  

• Credit utilisation analysis  

• Personalised financial recommendations  

Fact: India’s fintech ecosystem has grown rapidly in recent years, with millions of users relying on digital financial platforms for credit monitoring and loan management. 

What Information Can You See in the Credit Report? 

Your credit report contains detailed information about your borrowing history and repayment behaviour. Some key details include: 

Information Type	Details Available
Active Loans	Personal loans, home loans, auto loans, etc.
Credit Cards	Active credit card accounts and limits
Outstanding Amount	Pending loan balances
EMI Payment History	Timely and delayed payments
Loan Status	Active, closed, written-off or settled
Credit Enquiries	Loan applications made with lenders
Credit Score	Your current creditworthiness rating

Why This Information Matters 

Lenders look at this information to see how well you pay back loans and how good you are with money before they say yes to giving you a loan. 

For example: If your report shows you asked for a lot of loans in a short period, lenders might think you want to borrow too much money, which could make it harder for you to get a loan in the future. 

How to Get a Credit Report  

Your credit report has all the information about your loans, credit cards. How well you pay them back and it is all linked to your PAN card. Here is how you can get a copy of it:  

Step 1: Go to the CIBIL website  

Step 2: Click on the option that says ‘Get Free CIBIL Score & Report’ 

Step 3: Put in your PAN number, mobile number, email address and other personal details 

 Step 4: Confirm your details with a special code 

Step 5: Choose the free option and look at your report from the dashboard 

You can get one free credit report every year from each credit bureau that is allowed to give them out. If you see something fishy going on with your loans or someone using your money without asking tell someone away so it does not happen again. 

It is really important to have a credit score so you can get loans easily and pay less interest. You can also use the Fibe Credit Score Analyser tool to see what is affecting your score and what you can do to make it better. 

If you need money now but you do not have a good credit history you can apply for the Fibe Instant Cash Loan and get up to ₹10 lakhs depending on if you are eligible. With payment plans and no extra charges, for paying back early paying your loans on time can also help make your credit profile stronger. 

What to Do If You Find a Fraudulent Loan on Your PAN? 

If you discover a loan that you did not apply for, take immediate action to minimise financial damage. 

1. Raise a Dispute with the Credit Bureau 

File a dispute with CIBIL, Experian, Equifax or CRIF High Mark and report the unauthorised account. 

2. Contact the Lender Immediately 

Inform the lender or NBFC about the fraudulent loan and request an investigation. 

3. File a Police Complaint 

Register an FIR or cybercrime complaint with supporting documents and evidence. 

4. Report the Incident on the Cybercrime Portal 

You can report financial fraud online at the National Cyber Crime Reporting Portal. 

5. Monitor Your Credit Report Regularly 

Continue checking your credit report to ensure the fraudulent account is removed and no further misuse occurs. 

For example: 
If a fraudulent instant loan app has issued a loan using your PAN details, reporting it quickly can prevent EMI defaults from affecting your credit score for years. 

How to Prevent PAN Card Misuse 

Protecting your PAN details is essential to avoid identity theft and financial fraud. Here are some useful precautions: 

• Never share your PAN card details unnecessarily  

• Avoid uploading PAN copies on unsecured websites  

• Mask sensitive information when sharing PAN photocopies  

• Check your credit report regularly  

• Use trusted apps and lenders only  

• Avoid clicking on suspicious links or phishing emails  

• Keep your Aadhaar, bank and PAN-linked mobile number secure  

• Report lost or stolen documents immediately  

Pro Tip: 

When sharing a PAN copy for verification, mention the purpose on the photocopy, such as ‘For KYC Only’, to reduce misuse risks. 

Being proactive can help protect your financial identity and maintain a healthy credit profile. 

FAQs on Checking Loan Status Using a PAN Card 

Can I get loan details using a PAN card? 

Yes. Your PAN card is linked to your credit report, which contains details of all loans taken in your name. You can access this information through CIBIL, Experian, Equifax or CRIF High Mark. 

Can I check the number of active loans on my PAN? 

Yes. Your credit report displays all active loans linked to your PAN number, including lender details, outstanding balance and repayment status. 

How do I check active loans in my name for free? 

You can access one free credit report annually from each authorised credit bureau by registering with your PAN card details on their official websites. 

How do I check fraudulent loans in my name? 

Download your credit report and review the active loan accounts section carefully. If you notice any unfamiliar loan, raise a dispute with the bureau, contact the lender and file a police complaint immediately. 

How can I check how many loans are on my PAN card? 

You can check all loans linked to your PAN by downloading your credit report from CIBIL, Experian, Equifax or CRIF High Mark. The report lists all active and closed loan accounts. 

Can someone take a loan using my PAN card without my knowledge? 

Yes, if fraudsters gain access to your PAN details and supporting documents, they may attempt identity theft or fraudulent loan applications. Regularly monitoring your credit report can help detect such activity early. 

What is the difference between checking loan status on CIBIL vs directly with the lender? 

Checking through CIBIL or other credit bureaus provides a consolidated view of all loans linked to your PAN across multiple lenders. Checking directly with a lender only shows the loans you have with that specific bank or NBFC.

Knowing how to manage multiple loan accounts is not rocket science. Instead, it is about being disciplined and organised, both skills that financially independent adults need to inculcate. 

With easier and quicker access to credit, having multiple loans and credit cards is very common. But if you are unable to keep up with repayment, you may hurt your creditworthiness and your overall financial well-being. 

Effective management of all your loan accounts will help you:

• Pay on time
• Avoid late payment penalties
• Save more without straining your monthly budget

Effective Strategies to Manage Multiple Loan Accounts

Here are some ways you can be more responsible when paying off more than one debt. 

Consider Debt Consolidation

With a personal loan to consolidate debt, you can get sufficient funds to close all your loans early. This way, instead of paying multiple loan EMIs, you can merge all your debts into one. 

Not only does this reduce the net interest you need to pay but it also helps you pay only one EMI and worry about one deadline. This also helps reduce the risk of defaulting. Of course, you will need to qualify for such a loan, so ensure your income and employment match the required parameters. 

Choose a Balance Transfer

Another way to manage multiple loan accounts is by reducing the payable interest. Opting for a balance transfer can thus be a good solution. When you transfer your outstanding balance to a new lender charging a lower interest rate, you can bring down your EMIs. The surplus you save can go towards paying off your loans early. 

You can also choose a lengthier tenure to reduce your instalments even more. So, if you are finding it challenging to pay off multiple loans at the same time, go for a balance transfer. 

Pre-close Loans to Save Interest 

Pre-closing allows you to reduce your debts quickly and saves you from paying more as interest. Since you are charged interest on your outstanding principal amount, when you fully pay this amount, you don’t have to pay the interest. 

Making a lump sum payment instead of paying in EMIs across the tenure is what this strategy is all about. Pre-closing the loan may be a smart idea if you have surplus funds available. However, most lenders charge a pre-closure penalty, so check on it before you plan pre-closure. 

Use the Avalanche Method

Want to save money on interest? Instead of foreclosing, make a list of all your debts and their interest rates. Based on this, pay off the loans with the highest interest rates first. Instead of paying all of it in a lump sum, pay a little more than the EMI amount. The additional money reduces the principal amount, which results in lower interest. 

This way, you reduce your EMI every month and use the extra money towards principal repayment. You must continue the cycle until your loan with the highest interest is paid off before moving to the next high-interest loan.

In addition, here are some other smart tips that can help you manage your loans better 

• Don’t miss your EMI due date, as late payment charges may add to your financial burden
• Limit the use of credit cards until you’ve paid the loans to reduce the risk of defaults
• Prioritise paying your EMIs before credit card dues, as defaults and late payments on personal loans have a greater impact on your credit score
• Avoid borrowing a small loan to manage monthly repayments, as it can negatively affect your credit score
• Try to keep your credit utilisation ratio under 40% to improve your credit score
• Opt for auto-deduction or ask your lender to send a reminder for due dates
• Convert all your credit card bills into EMIs to simplify your repayments 
• Get additional sources of income or ask for a raise

If you’re looking to consolidate your debts, consider opting for the Fibe Instant Cash Loan. You can easily get up to ₹5 lakhs to manage your loans and other bills, cover medical emergencies and more. 

Affordable interest rates, flexible tenure options, and an app that makes repayment hassle-free are some of its advantages. Moreover, you can repay your loan without any pre-closure charges. Download our Personal Loan App or visit our website for an easy application process. 

FAQs on Managing Multiple Loans

How do you manage multiple loans?

Here is a quick review of some of the methods to manage your loans. 

• Pay off loans with the highest interest first
• Create and follow a budget 
• Consolidate your debts 
• Don’t overspend on unnecessary things  
• If you get a raise, divert the funds towards repayment 
• Follow the repayment schedule and don’t miss the due date

Does prepaying loans help when managing many loans simultaneously? 

Yes, prepayment of loans helps you reduce the principal and thus decrease your EMI or loan tenure. It helps you save on interest.

Have you ever checked your loan app and seen terms like ‘activation pending’ or ‘active loan’ and wondered what they really mean? This is one of the most common doubts borrowers have once their loan gets approved. Is your loan already running, or is it still waiting for some final step before disbursal? 

The answer is simple yet important: 

• Activating a loan is about completing final steps like eSign and setting up your eNACH mandate (UMRN) so the bank can release funds. 

• An active loan means your money has already been disbursed, and your repayment schedule is live. 

Understanding this difference saves you from confusion, helps you track EMIs better, and keeps your credit score healthy. 

What Does ‘Activating a Loan’ Mean? 

When a lender approves your loan, you aren’t done yet. You must finish a few digital formalities before the money hits your account: 

1. eSign your loan agreement and Key Fact Statement (KFS) using Aadhaar OTP. 

2. Set up your eNACH auto-debit mandate — this generates a UMRN confirming EMI auto-debits. 

3. Once verified, your loan moves to disbursal stage. 

Tip: Always save the mandate confirmation SMS or UMRN number—it’s proof that your auto-debit is active. 

What Does It Mean if Your Loan is Active? 

An active loan means: 

1. Funds are already credited to your account. 

2. EMIs are scheduled and repayment has begun. 

3. Your lender app/statement shows loan ID, due dates, and outstanding balance. 

4. Within a few days, it also appears in your credit report (CIBIL, Experian, CRIF, Equifax). 

Active status = full responsibility to pay on time, because this directly impacts your credit history. 

How to Check If Your Loan is Active? 

You can verify your loan status in multiple ways: 

1. Lender App: Dashboard → Loan details → Status (Active, Closed, Overdue). 

2. Netbanking/Mobile Banking: Check loan/credit account sections. 

3. Credit Report by PAN: Download your CIBIL or Experian report to confirm all active loans. 

4. Google Pay Loan Tile: Some lenders integrate with GPay, where loan status and repayment dates are visible. 

Common Issues You May Face 

• Activation stuck/on hold: Can happen due to failed eNACH registration, Aadhaar mismatch, or bank downtime. Retry the process or contact your lender. 

• Loan shows ‘active’ even after closure: Systems may lag. Request your No Objection Certificate (NOC) and updated Statement of Account (SoA) from your lender, then raise a correction with the credit bureau. 

How Active Loans Affect Your Credit Score? 

Your CIBIL score is directly linked to your loan status: 

• Timely EMI payments: Improve your credit score. 

• Missed/delayed EMIs: Lower your score and may attract penalties. 

• Closed loans with NOC: Strengthen your profile and show repayment discipline. 

Knowing whether your loan is still in activation or already active saves you from confusion, missed EMIs and credit score issues. Always complete your eSign and eNACH steps quickly and check your loan status across your lender’s app and credit bureau reports. 

If you need cash instantly, then Fibe is here for you! Get up to ₹5 lakhs in just a few minutes directly in your bank account. Got surplus amount? Repay the loan early with 0 foreclosure charges.  

FAQs on Differences Between Activating Loan vs. Active Loan  

1. What does it mean if your loan is active?  

An active loan means your approved loan has been disbursed and is currently running. You’re now responsible for repaying the EMIs as per the schedule.  

2. Does active loan affect CIBIL score?  

Yes, an active loan impacts your CIBIL score. Timely EMI payments can improve your score, while missed or delayed payments can negatively affect it. 

Knowing when to take out a personal loan isn’t easy, but there are instances where these loans can help. For one, these loans are a great option for dealing with emergencies, as you get funds quickly.  

You can also use the loan amount to streamline existing debt repayments, build your credit score, or save on high-interest rates. So, technically, a good time or right time to take a loan is whenever you need the funds.

For insights on when applying for a personal loan can be a wise option, things to consider and more, read on.

The right moment to avail of a loan completely depends on your need and personal finances. However, the right loan from a reputed lender also makes this decision a lot easier. One option to consider is the Fibe Instant Cash Loan, as you can get up to ₹5 lakhs with ease and on affordable terms. 

Here, you can choose from flexible tenure of up to 36 months for easy repayment all through. Fibe Personal Loan has no end-use restriction, straightforward eligibility criteria, a convenient application process and zero hidden fees. So, download our Personal Loan App or go to our website to apply now. 

FAQs on When to Avail a Personal Loan

What is the right time to take a personal loan?

Knowing when to take out a personal loan can be tricky because it completely depends on your financial needs.  As it is a flexible option, you can use it for almost any expense. Ideally, you can consider availing a personal loan for: 

• Debt consolidation 
• Overseas travel
• Higher education tuition costs
• Wedding expenses
• Down payments
• Big-ticket purchases

Do personal loans affect mortgage applications? This is a smart question and the simple answer is yes. Even though one is unsecured and the other is secured, any existing loan affects your second loan.

Your existing personal loan can have a significant impact on everything from eligibility to interest rates. Read on to get an answer to the question, will getting a personal loan affect getting a mortgage?

Positive Effect of Personal Loans on Home Loan Applications 

Here’s how it affects your application positively:

• Helps Build a Positive Credit History

If you’ve repaid your personal loan successfully, it creates a good payment record. Responsible repayment behaviour includes:

1. Timely repayment of your personal loan EMIs
2. No defaults or loan settlements

When you apply for a mortgage, lenders check how well you handle credit. A positive repayment track sends the right message and you can look forward to quick approval.

• Reflects Solid Financial Standing

When you repay your personal loan on time, it speaks volumes about your income and employment. Both these aspects are considered when lenders are assessing your second loan application. 

• Helps You Negotiate for Better Loan Terms

If your existing personal loan repayment record is positive, you are a creditworthy borrower. Thus, you have the power to negotiate for better loan terms.

This way, you can contact the home loan lender and communicate your case for better terms. You can negotiate for the following:

1. Lower interest rate for the home loan
2. An extended tenure for the home loan

Negative Effect of Personal Loans on Home Loan Applications

In some cases, this can be harmful:

• Non-Repayments Lower Your Credit Score

Your credit score summarises your repayment history. Lenders rely on this number to check your credibility and eligibility. Your credit score decreases when you fail to repay your personal loan EMIs as per the pre-decided schedule.

Home loan lenders may hesitate to approve your application when they see that you don’t have an adequate score.

• Affects Your Debt-to-Income Ratio

This ratio determines the amount that goes towards repaying your existing debt from your total monthly income. This may be due to a:

1. Personal loan
2. Auto loan
3. Credit card 

A higher DTI ratio reflects a high dependence on credit. This may lead to lenders assuming that you don’t have room for a second loan and they may not approve your home loan application.

• Results in Hard Inquiries by the Lender

Your credit report is generated by credit bureaus like:

• TransUnion CIBIL
• Experian
• CRIF High Mark
• Equifax

Your credit report is based on:

• Each minimum payment you make towards your credit card bill
• The monthly EMI amount on any vehicle loans
• Any judgments or liens against you
• Each EMI amount towards your personal loan
• Additional financial obligations

When you apply for a home loan, the lender will initiate a hard inquiry of your score, which gets recorded in your credit report. Multiple inquiries can hurt your overall financial profile and lead to lenders rejecting your loan application.

• Incurs Higher Interest Rates

A solid financial profile includes:

• Stable income and employment
• High credit score
• Consistent repayment of your credit
• Low debt-to-income ratio

If you don’t have these, you may not appear to be a creditworthy applicant. This increases the default risk and lenders compensate with a higher interest. 

Now that you understand how a personal loan can impact your mortgage, you can plan your application wisely. To ensure you have the freedom to prepay and have minimum hoops to jump through, consider getting an Instant cash Loan of up to ₹5 lakhs from Fibe.

You can get the funding at competitive interest rates and repay easily by choosing from flexible plans. What’s more, you can get the funding online with minimal formalities. Download our Personal Loan App or apply directly via our website. 

FAQs on How Personal Loans Affect Getting A Mortgage

Can I get a home loan if I already have a personal loan?

Yes, there is no restriction on the same, even if you have a personal loan.

Will a personal loan affect my mortgage application?

Yes, here’s how it affects your second loan positively:

• It helps build a positive credit history
• It assists in debt consolidation
• It reflects a solid financial standing
• It helps you negotiate for better loan terms

It affects your home loan negatively in some cases when:

• It results in hard inquiries by the lender
• It can lead to higher interest rates
• Non-repayment of your personal loan lowers your credit score
• It affects your debt-to-income ratio

Do personal loans affect home loan eligibility in India?

Yes, it can influence your eligibility in these ways:

• Positively, when you pay your personal loan successfully on time
• Negatively, when you fail to repay your loan as per the schedule

Before you plan on getting credit, you must ask the question, ‘Are personal loan rates going up or down?’. This is because interest rates significantly affect your overall borrowing cost. With an increase in the rates, your repayment amount will also go up and vice versa. 

These interest rates depend on several factors, from your financial profile and the policies of the lending institution to the market rates. Read on to learn how high rates affect your borrowing and what causes an increase in rates.

How High Interest Rates Affect Borrowers?

• In India, the Reserve Bank of India (RBI) levies an interest charge, known as the repo rate, on the funds that commercial banks borrow.
• With an increase in the repo rates, interest rates levied by the lenders also rise, increasing the borrowing cost of your loan.
• Conversely, a decrease in the repo rates can result in your loan EMI also going down.
• If you have chosen a floating rate, any change in the repo rate will affect your rate too.
• On the other hand, if you have chosen a fixed rate, the EMI will remain the same throughout the tenure.
• If you choose floating interest rates, you must check if there’s a cap on the maximum increase in these rates and your EMI amount.

Also Read: Why Personal Loan Interest Rate is High?

Factors that Lead to an Increase in Personal Loan Interest Rates

Here are some of the factors that could increase the interest rates offered to you:

Monthly Income

• Lenders check whether you have a stable monthly income or not before approving your application 
• With this information, they assess if you’ll be able to repay the loan comfortably
• In addition to deciding whether to approve your application, they consider your income to decide the interest rate as well
• If they believe that repaying the loan with your income may be difficult, they may charge a higher interest rate to compensate for their risk 
• On the other hand, if your income is on the higher end and can support timely repayment, they may offer lower rates due to the reduced risk

Nature of Employment 

• In addition to your monthly income, lenders also consider your employment status
• For this, they evaluate:

1. Whether you are a salaried employee or a self-employed individual
2. Your work experience (employment history) in your current organisation
3. The reputation of the organisation you’re currently working in
4. The age of the business you’re currently operating
5. Whether your business has stable or seasonal income

• With this information, lenders decide if your employment is stable enough to support your loan repayment 
• If it is, they may offer you loans at lower rates since the risk of default is low and vice versa.

Credit Score

• When you apply, the lending institution checks this score to assess your repayment capacity
• A lower credit score indicates that you are either inexperienced or have had a poor track record when it comes to credit
• Lenders may charge a higher rate if you apply with a lower score to compensate for their risk
• If it is on the higher side, it shows that you have a stable financial profile and are a responsible borrower
• This leads to a reduction in the risk for the lender and they may offer loans at lower rates

Age 

• Lenders take this factor into account to gauge your repayment ability 
• For younger individuals who have just entered the job market, lenders may assume that you don’t have enough employment history and don’t have experience with credit 
• In addition to that, if you’re close to retirement, your income flow may be disrupted 
• In these cases, the risk of default can be higher, leading to lenders offering a higher rate. 

Relationship with the Bank

• Lenders may charge a lower interest rate if you’re an existing or a past customer with an account in good standing
• In case you are, they may view you as a trustworthy borrower, who is less likely to default
• Based on this positive relationship, they may offer you a lower rate and vice-versa 

Availability of Collateral

• If you opt for unsecured loans, the lender may charge a higher rate for the increased risk
• If you’re pledging collateral, lenders may offer you a comparatively lower rate
• The asset you pledge as security strengthens your application and lowers the lender’s risk
• If you fail to pay your loan on time, the lender can legally recover the amount through your collateral
• Some assets you can offer as collateral include:

1. Gold 
2. Real estate
3. Investments
4. Vehicles
5. Inventory
6. Accounts receivable

Existing Liabilities

• Your existing financial liabilities also influence the interest rates. These liabilities include:
  • Loans
  • Credit cards
  • Monthly payments
• If you have a lot of expenses, lenders may assume that repayment may be challenging and you may default in the future
• To compensate for this risk, they apply a higher interest rate on your loan

Choosing a personal loan lender that offers competitive rates is a great way to keep your borrowing cost low. Fibe offers  Instant cash Loans of up to ₹5 lakhs at rates starting at 2% per month with tenure options of up to 36 months. You also don’t have to worry about hidden costs or pay any foreclosure charges that can drive up your borrowing cost. Download our Personal Loan App or apply directly through our website with minimal requirements.

FAQs on What Rising Personal Loan Rates Mean For Borrowers

Are interest rates for loans going up?

The answer to the question, ‘Will personal loan interest rates rise?’ depends on various factors, such as:

• Changes in the repo rates
• Your financial profile
• Rules and policies of the lending institution

What happens to borrowers when interest rates rise?

In such a scenario, the interest you pay on the loan will also increase. This can result in increased overall borrowing costs. However, the change in rates will affect your borrowing if you have floating rates and not if you have fixed rates.

Understanding the benefits, features and function of a personal loan vs a line of credit is crucial. Although these borrowing options sound quite similar to each other, they have some major differences. By knowing what they offer and how they differ, you can choose the best option to meet your needs.

Read on to learn what these options mean and how they differ.

Understanding Personal Loans

This is a type of credit where you receive the amount approved by the financial institution in a lump sum. These loans come with no restriction on end use, meaning you can cover a number of expenses, such as:

• Down payments 
• Payment of your children’s school fees
• Medical bills
• Renovation of your home
• Your child’s wedding

Lenders approve your application for these loans based on your:

• Income and employment
• Age and residence
• Credit history and score
• Credit utilisation ratio
• Debt-to-income ratio

Here are some benefits of a personal loan:

• No restriction on end-use
• No collateral requirements
• Funds are disbursed in a lump sum
• Interest rates and EMIs remain fixed throughout the tenure

With its myriad of benefits, personal loan also have some limitations, such as:

• Interest rates and other charges can be higher than other forms of credit 
• Interest owed is calculated on the total loan amount, even if you don’t use all of it

Understanding a Line of Credit

This option works similarly to credit cards, where you receive a fixed limit that you can withdraw funds from and use for specific purposes only. The lender will charge interest on the amount you use and the repayment can be in fixed instalments, interest-only, or any other option as agreed. 

Some line of credit options you can apply for include: 

• Personal line of credit
• Business line of credit
• Home equity line of credit (HELOC)

Here are some pros of a line of credit:

• You can withdraw the funds whenever needed
• Interest is applicable only on the amount that you use
• You can make repayments in various ways

Some limitations of a line of credit include:

• You need a high credit score to apply
• The interest rates are not fixed, which makes planning the repayment difficult
• This credit option can lead to overspending

Difference Between a Line of Credit and a Loan

Refer to this table to know how both these credit options differ:

Personal Loan Vs Line of Credit
	Personal Loan	Line of Credit
Disbursal of funds	The full sanction is disbursed to an account of your choosing	You can withdraw funds up to the approved limit as and when required
Purpose	Funding comes with no restriction on end use, which means you can use the amount for your various needs	You can only use the funds only for the specific purpose that you apply for, like a student line of credit or a business line of credit
Charges	Fees and charges include:Interest rateApplication feesLate payment chargesPrepayment charges	Fees and charges include:Interest rateAnnual feesLate payment chargesOverdraft fees
Interest calculation	Interest accrues on the total loan amount from the day you receive it	Interest accrues only on the amount that you utilise, not the entire limit
Repayment tenure	Generally, goes up to 60 months but can be higher depending on the lender	Depends on your usage and other factors, including the financial institution you choose
Type of interest rate	A loan can have fixed as well as variable interest rates	A line of credit can have only variable interest rates

Armed with this information, choosing the right option is a lot easier. If you decide that a personal loan is more suitable, consider getting an Instant cash Loan from Fibe. You can get up to ₹5 lakhs at competitive rates and flexible tenure. 

The process is also simple as you need only submit basic documents online and can get access to funds in a matter of minutes. Download our Instant Loan App or apply directly through our website. 

FAQs on Personal Loan vs Line of Credit

Is a credit line the same as a personal loan?

No, here’s how these credit options differ:

• Through a personal loan, you receive the amount in a lump sum and you can address numerous expenses 
• In a line of credit, you get a limit from which you can withdraw whenever needed only for the purpose you apply for, like a student or business line of credit 

What is the difference between a loan and a line of credit?

Here’s how a personal loan and a credit line differ:

• You receive a loan in a lump sum, whereas a credit line comes with ongoing access
• You can use a personal loan for various expenses, while you can only use a credit line for specific purposes
• Personal loans can have fixed or variable rates, while credit lines come with variable rates
• The interest is calculated on the full amount for a loan, while interest for a line of credit is based only on the amount that you withdraw.