The advantages of a personal loan are numerous. Customers today are embracing this credit solution to meet their planned and unexpected financial needs. In fact, there has been a 20% growth in the utilisation of personal loans, amounting to a total of ₹40 lakh crores as of February 2023.
With the advent of digital lending, there has been a paradigm shift in how India borrows. With lenders offering easy access to personal loans, many opt for these instant loans to meet diverse objectives. Read on to learn more about why these loans stand out.
Benefits of a Personal Loan
Simple Eligibility Criteria
Qualifying for an instant personal loan is easy due to its simple qualification benchmarks. This allows you to get the required funding without any delays. At Fibe, you only need to meet these simple terms to get instant funds:
You must be a salaried individual with a minimum salary of ₹15,000 in non-metro cities and ₹18,000 in metro cities
You must be between 21 and 55 years
You must be a resident of India
Once you meet these basic requirements, you can easily qualify for a low-interest personal loan. Do note that most lenders have city-specific income requirements.
Minimal Paperwork
Basic KYC documents help to verify your details when you opt for a cash loan. If you are an existing customer with a given lender, you may even enjoy a paperless application process. Here are some common documents to submit when availing a personal loan:
PAN card/Aadhaar card/Passport as ID Proof
Valid proof of income, such as bank statements and salary slips for the last 6 months
Passport/Aadhaar card/Utility bills/Rental agreement as proof of address
Usually, top lenders process loan applications within 24 hours. Some new-age lenders like Fibe can process and approve your application in just 2 minutes. Among the various benefits of a personal loan, this one ensures that you get instant cash in situations like medical emergencies or urgent home repairs.
What’s more, disbursal is quick and you get the cash directly in your account without any delays. Such personal loan advantages are only possible as these loans do not require you to pledge any asset as collateral.
Flexible Repayment Terms
Lenders often allow you to enjoy some amount of flexibility when it comes to tenure. You can select the repayment term of your choice to ensure that EMIs don’t make a dent in your pocket.
For instance, Fibe allows you to choose a tenure between 3 to 36 months. This allows you to choose convenient and affordable repayment options.
No End-use Restrictions
A restriction-free sanction is one of the major advantages of a personal loan. Unlike other options, you can use it to fund any obligations hassle-free.
Here are a few different financial requirements you can meet:
Consolidate existing debts
Fund a wedding
Pay for educational expenses
Cover the cost of any big or small trip
Relocate to a new place
Renovate your home
Buy electronic gadgets
Fund small business expenses
Manage miscellaneous unforeseen expenses
Being aware of these personal loan benefits allows you to make confident borrowing decisions. However, to enjoy all these advantages of a personal loan, know that lenders usually approve your loan based on your creditworthiness. If your credit score is low and you have made several credit enquiries in the previous months, you may need to wait before opting for a loan.
Take some time to work on your credit score and then apply to get affordable financing. It is also advisable to apply for a personal loan with a trusted lender. One such smart lending option is a Fibe Personal Loan, through which you can get up to ₹5 lakhs within minutes.
At Fibe, we don’t rely on the traditional credit score to assess your repayment ability. Instead, we use an alternate scoring mechanism to check your creditworthiness before approving your personal loan application. So, a low or no credit score is no barrier to your ability to get credit! Download our Personal Loan App or register on our website to get started.
FAQs on the Advantages of a Personal Loan
Is it a good idea to take a personal loan?
A personal loan has many advantages, as it can help you finance unexpected needs or even fulfil your planned goals. You can use your loan for consolidating debts, renovating your home, paying your hospital bills and much more.
What is the maximum limit of a personal loan I can get?
The maximum personal loan limit can vary from one financial institution to another. At Fibe, you can get a personal loan of up to ₹5 lakhs within 2 minutes directly in your bank account.
Which loan is the best for personal use?
Opting for a personal loan is ideal as it has no end-use restrictions and doesn’t require collateral.
Is there any security required for a personal loan?
Personal loans are unsecured forms of credit, meaning you do not have to pledge assets as collateral or security to get the required funds.
The days of organisations benefiting from a straightforward retirement plan or all-inclusive health insurance have long passed. Millennials, particularly Gen Z, are demanding more extensive, inventive, and distinctive fringe benefits. Besides benefits like work-from-home alternatives and flexible paid time off policies, financial wellness programs are quickly gaining popularity. Here is a brief explanation of financial wellness programs.
Most employees state that they need assistance conserving money for a secure future. Employers now have started offering various financial wellness programs to cater to employees’ specific needs. Human resource is the most valuable resource. By lending access to financial awareness and wellness via such programs, an organisation not only amps up employee productivity and retention but also enhances the bottom line.
A financial wellness program must first educate the staff so that the employees can choose which financial wellness benefits are essential for them. They will be better able to manage their finances strategically as a result. Employees are just as concerned about their physical and mental well-being as their finances. And they believe that maintaining a balance between both aspects is crucial for a prosperous future.
But what exactly are the benefits of a financial wellness program? Let’s find out how a well-designed financial wellness program can help any organisation succeed in the procurement of its objectives:
Not only will the employees benefit from having a thorough and customised financial wellness program, but you as the company will also reap some benefits.
Advantages of a Financial Wellness Program
1. Enhanced staff productivity: A financial program must provide budget coaching, debt management plans and student loan assistance. A direct benefit of this would be improved employee output. Additionally, this will lessen people’s financial troubles. Employees who participate in financial wellness programs spend less time worrying about debt and other issues.
2. Enhanced Employee Satisfaction: When employees have access to financial programs, they report higher levels of professional satisfaction. Programs that enable employees to meet their personal and familial financial objectives, building an emergency fund, investing in an investment plan and other things are all part of it.
Employee engagement is higher when they are prepared for unforeseen financial problems. They don’t have to worry about their finances in the long run, which is why.
3. Increased employee retention: By implementing a financial wellness program, an organisation is more likely to provide benefits to its staff that will help them feel secure in their job and prospects. Inclusion of group insurance, vacation perks, low-interest home loans, retirement benefits, etc., helps organisations foster a long-term relationship, amiable work culture and employee loyalty, ultimately leading to greater retention and lesser attrition rates.
4. Strong Employee Recruitment: Job-hopping is a typical trend among workers today due to the high level of competition. To reduce this, employers must offer all the incentives and perks necessary to retain top talent.
Employees have a strong sense of stability because of benefits like health insurance and wellness programs included in the job application. HR managers must make aware prospective employees of the same for a successful recruitment plan and create a good brand image. The millennials feel appreciated in a company that gives preference to their needs and makes efforts for the same. Increasing the likelihood that someone will join your organisation.
5. Reduced absenteeism: The cost of living has significantly increased due to inflation rates. Employees struggle to make ends meet despite having well-paying jobs. Employees rarely have a carefully thought-out financial strategy for their expenditures, which is why they face month-end crunch or inability to face bigger expenses. Financial stress and worry lead to many physical and mental issues that may deprive the employees of their usual vigour, leading to increased absenteeism.
At other times, employees may choose to take on side occupations to have some extra cash. This may impact their ability to perform their primary duties, increasing the number of absentees in the company. This could be a serious issue for the business.
However, HR managers may help employees out of this scenario by teaching them about financial wellness. These lessons will enable employees to create an effective budget for themselves that will, in the long term, enable them to stay out of debt. Consequently, the likelihood of seeking another employment is reduced, leading to reduced absenteeism.
A well-designed financial wellness program can work wonders for organisational success. So make sure to invest time in one.
The Bottom Line
HR managers must implement a program that promotes financial wellness within the company. We’ve already discussed some potential advantages and benefits that could result from it. Such a program’s structure can take time and work to develop. Additionally, this can serve as a superb example for others of the company’s exceptional corporate culture and a positive attitude among the staff.
Having assisted over 4 million employees in sailing through their financial woes and other related management issues, Fibe is your one-stop solution and trusted financial wellness partner. If your organisation wants to set up a financial wellness initiative catering to employee well-being and finances, head to Fibe for a hassle-free experience.
A credit score is one of the first measures a lender considers when you’re applying for a loan in India. It’s this information helps the banks and lending institutions evaluate any individual’s creditworthiness and repayment ability while applying for a loan. So, does it mean that people without credit scores aren’t eligible for a loan? Not at all. A borrower can get an instant loan without credit score or a low credit score. Let’s have a look at how to get loan without credit score.
What is a Credit Score?
The Credit Information Bureau (India) Limited is the credit bureau that maintains records of companies and individuals’ credit-related activities, including credit cards and loans in India, specifying their credit score.
A credit score is a three-digit numeric summary of an individual’s credit history that reflects his credit profile. It is solely based on past credit behaviour such as borrowing and repayment habits, as shared by banks and lenders with credit regularly.
A person’s past behaviour is taken as an indicator of their future actions, and hence the credit Score showcases a consumer’s creditworthiness. A high credit score enables cheaper and instant loan approval, while a low indicates vice versa. The credit score ranges from 300 – 900 depending upon various factors like the repayment history, credit card utilisation, the number of times applied for a loan and loans for different purposes of the individual.
Generally, a score between 300 and 699 is considered a bad or low credit score. Banks are unlikely to lend loans to such people, and even if they do, the interest is 0.5%-2% higher. And if the score falls below 700 (mainly due to defaults made in paying off the previous loans), the banks might refuse to offer any loan. For example, when a person applies for a credit card or loan, one of the critical factors lenders check is the person’s credit profile, as depicted by the credit score. Banks usually offer loans to individuals falling within the 750-900. But Fibe can lend you an Instant Personal Loan with a low credit score.
How to Get a Personal Loan without credit/ Credit Score?
Applying for a loan without credit score is quite tricky, but Fibe makes your work easy by providing loans to individuals even without a credit or credit score.
Primarily, personal loans are collateral-free and do not require security. But this is only significant if you have a good or high credit score. Moreover, if you don’t have a credit score, you will have to offer security on a personal loan. Despite that, you can pledge any of your valuable assets as collateral on a loan to Fibe. This will make it easier for you to avail of a loan from the lender of your choice.
2. Prove your Creditworthiness
A lender always looks for a creditworthy borrower to approve a loan application. Therefore, if you have a stable source of income, you can easily apply for a personal loan from Fibe. You can even apply if you have a low credit score or no credit score displaying your salary slip or bank statements as proof of your income. In addition, this will prove your ability to repay the loan amount on time.
3. Get a Guarantor/ co-applicant for the Loan
Likewise, you can apply for a personal loan with a co-applicant or a guarantor but make sure that the guarantor has a steady income. If your co-applicant is a family member, you should inform them beforehand regarding your intentions to avail yourself of a personal loan to avoid confusion.
Then the co-applicant needs to fulfil the KYC process with Fibe’s easy-to-use app. They will then check the bank statements and credit history. Then you’re most likely to get your loan application approved if the co-applicant meets the criteria.
4. Apply for a Lower Loan Amount
It’s best to avoid applying for a higher loan amount if you have a low credit score or don’t have one. This is because the lender may either doubt your creditworthiness or charge high interest. But Fibe charges low-interest rates on such loans. This ultimately increases your chances of getting the loan approved.
5. Ask for a NA or NH on your Credit Report from your lender
No History (NH) or History not Available (NA) or on your credit report marks the absence of any previous credit activity and credit in the last 36 months. In such cases, you can avail help from Fibe consultants. They may consider your situation and offer a personal loan at a reasonable interest rate.
6. Bonus Tip: Do it The Fibe way
Fibe makes things easier for you. You will no longer have to wander from bank to bank since it’s challenging to get an instant loan approval without a credit score online in India. We aim to be one of the most user-friendly instant loan apps in India. These are the five documents you need to avail an instant loan online with Fibe:
Selfie
PAN card
Address ID proof
Aadhar card
Bank statement
Individuals can apply for an Instant Loan without credit score at Fibe. You can also explore more Money Management, Investment, Instant Personal Loans, And Financial Wellness Ideas on Fibe for all your needs.
Download the Fibe app or log in to our website to become a part of the #OneSmallStep experience.
Adds multiple senior leadership positions over the last 6 months
Aims to deepen the financial ecosystem for young and aspirational Indians through its platform
Pune, India, 29th August 2022: India’s largest consumer lending fintech, EarlySalary, has closed its series D funding round of $110 million led by TPG’s The Rise Fund and Norwest Venture Partners. Existing investor Piramal Capital & Housing Finance Limited also participated in the round. This is EarlySalary’s largest fundraise to date, following the company’s last financing round in 2019. The company had raised $34 million in previous rounds from Eight Roads, Chiratae Ventures, Piramal Capital & Housing Finance Limited and angel investors. The latest investment will enable Fibe to grow its business significantly in the next 24 months. The series D round of $110 million includes a secondary sale. Unitus Capital acted as the exclusive advisor for the transaction.
Founded in Pune in 2015, Fibe provides accessible financial lending solutions of up to Rs. 5 lakhs to working professionals. The company expanded into the affordability segment and introduced Buy Now Pay Later (BNPL) services to its customer segment with a clear focus on education, health and consumer product financing. Over the course of its journey, Fibe expanded its services to over 150 cities and aims to continue growing its customer base.
Fibe’s core purpose is to provide a financial ecosystem for young and aspirational individuals. 80% of Indians use banking services, however, almost 50% of the Indian population doesn’t have access to credit due to various reasons. The focus of Fibe is to provide a safe and reliable credit platform to the underserved population, primarily in Tier 3 and 4 cities, at affordable rates.
Fibe’s comprehensive suite of products includes personal loans payable in EMIs over multiple tenures. The company will continue to expand its BNPL segment and build out an extensive network of partners across the healthcare and edtech segments.
To create a superior customer and product experience, the company will continue to focus on enhancing its tech and analytics frameworks while delivering a high degree of transparency, risk management and customer centricity to achieve its growth plan. In the last six months, Fibe has added key executives across risk, sales, treasury and other functions to strengthen its management team.
The company has rapidly expanded its presence from 18 cities to over 150 cities and increased its customer base to 12 million app downloads with approximately 1 million customers. It has grown 7x over the last two years and emerged as a market leader in providing financial assistance to young middle-income individuals across the country. The business continues to be profitable over the pandemic and expects to grow manifold in the future.
Commenting on this funding, Akshay Mehrotra, Co-founder and CEO said, “We believe in a customer-first approach to providing credit to young middle-income Indians and we are thankful for the trust millions of Indians have put in us. As our customers’ aspirations and credit needs grow, we will focus to continue to retain their trust and grow with them. The funding will not only help us in expanding our cash business but also build an array of capabilities to efficiently serve a larger segment of customers. We are confident in our ability to keep innovating and achieving 10x large growth in our customer base.”
Ashish Goyal, Co-Founder and CFO said, “Fibe’s core purpose is to enable financial services access to its core segments. This capital raise enables us to grow and meet our customer aspirations. We believe that we will be able to add significant value to the fintech ecosystem. This capital raise from two of the most marquee investors is also a validation of our core principles of building a business that is customer-focused, profitable and driving meaningful gains in financial inclusion.”
Akshay Tanna, Partner at TPG said, “Through its innovative platform, Fibe delivers a critical financial service to the growing, yet underserved, middle-income segment in India. By providing modest, short-duration loans at competitive rates, Fibe is improving the financial health of its customer base and empowering them to finance things like upskilling courses, healthcare needs, personal emergencies, and short-term cash flow mismatches. Akshay and Ashish have built a world-class team and a market-leading product that is poised to continue to meet the needs of India’s rising middle class and we are delighted to be a part of its next chapter of growth.”
Financial inclusion is a core focus of The Rise Funds’ multi-sector global impact investing strategy. The Rise Funds have invested in several financial technology companies that are building a more inclusive financial system around the world including Varo in the US, Duxiaoman in China, and Airtel Money in Africa.
Niren Shah, MD at Norwest Venture Partners said “We are delighted to partner with Akshay and Ashish at Fibe, who have built one of India’s leading, profitable and scalable consumer fintech platforms. Digital lending is emerging as one of the fastest-growing fintech segments in India and we believe that Fibe is well-positioned to serve the credit needs of millions of underserved but aspirational Indians. Fibe’s strong growth has been driven by a world-class technology, analytics and governance platform, which has resulted in exceptional credit underwriting and asset quality.”
With the recent digital guidelines by RBI, Fibe believes that the ecosystem is also enabling an innovative and constructive environment to grow its digital footprint and digital way of banking. Fibe aims to expand operations across verticals and targets to reach millions of customers. It aims to build a significant presence in the impact categories of providing cash loans to young Indians, salary advances to corporate employees and an ecosystem to provide avenues like BNPL to its customers.
About The Rise Funds The Rise Funds are a core pillar of TPG Rise, TPG’s global impact investing platform. Founded in 2016 by TPG in partnership with Bono and Jeff Skoll, The Rise Funds invest behind impact entrepreneurs and growth-stage, high potential, mission-driven companies that are focused on achieving the United Nations’ Sustainable Development Goals. The Rise Funds deliver capabilities and expertise across a wide variety of sectors and countries at scale, focusing on opportunities in climate and conservation, education, food and agriculture, financial inclusion, healthcare, and impact services. With approximately $15 billion in assets across The Rise Funds, TPG Rise Climate, and the Evercare Health Fund, the TPG Rise platform is the world’s largest private markets impact investing platform committed to achieving measurable, positive social and environmental outcomes alongside competitive financial returns. For more information, visit therisefund.com or @therisefund on Instagram.
About Norwest Venture Partners Norwest Venture Partners is a global, multi-stage investment firm that manages approximately $ 12.5 billion in assets and has funded more than 650 companies in the last six decades. Norwest Venture Partners is focused on early to mid-stage venture capital and growth equity investments across a wide range of sectors including Fintech, Insurance, Consumer-tech, B2B, SaaS, Healthcare, Logistics, etc. Some of the prominent investments in India include Swiggy, OfBusiness, Kotak Mahindra Bank, Five Star, NSE, Vastu Housing, IndusInd Bank, SK Finance, Mintifi, Xpressbees, Amagi, Thyrocare, Duroflex, MENSA, etc. Norwest has offices in Palo Alto, San Francisco, India, and Israel. For more information, visit www.nvp.com.
About Fibe (Formerly EarlySalary) Fibe is India’s leading consumer lending app focused on young, aspirational and tech-savvy Indian consumers. It is building a financial ecosystem that enables the mid-income group to fulfil their aspirations. It has launched a host of financial products like Cash Loans, long-term Personal Loans and Buy Now Pay Later plans. It offers a 100% digital loan application process that takes just seconds to complete. Fibe has grown multifold over the last 2 years and emerged as a market leader in providing financial assistance to young middle-income group in India. The company has already disbursed nearly 2.8 million loans worth Rs. 7,500 crores.
With fintech advancements, the lending sector in India has progressed by leaps and bounds. Today, consumers no longer have to stand in queues to get loans, as almost all financial undertakings can be completed online. While this ease of access is admirable, loans are still the same financial responsibility they always were. As such, it is well worth it to understand the instrument fully, and this means knowing the loan terms associated with it. While a majority of the exposure to these loan terms will be through promotional content, you are likely to encounter the entire glossary when reading through the loan documents.
What’s more, the latest RBI regulatory framework mandates lenders to issue borrowers a Key Fact Statement, which is a document containing vital loan information. Naturally, this statement will contain pertinent loan terms, and understanding what they denote is key to borrowing smartly. Here is a brief overview of the important loan terms to look out for when availing funds.
Credit score
Of the many finance terminology definitions to know, credit score is likely among the more important ones. Simply put, your credit score is a 3-digit score assigned to you by a credit agency. The CIBIL score is a popular credit score that lenders consult when assessing your creditworthiness. Generally, there is a minimum credit score for loan approval when borrowing funds, with most lenders requiring a score of at least 650.
APR
This loan terminology is an acronym for annual percentage rate, and the APR dictates the true cost of borrowing for a year. The APR is almost always higher than the interest rate offer advertised for a term loan. This is because it accounts for the interest payable, as well the other costs listed in the loan agreement.
Collateral
The collateral simply denotes the asset pledged in order to avail the loan. In many cases, the lender will not approve a sanction or go through with loan disbursement unless you pledge an asset that you own. These instruments are called secured loans and the value of the asset often impacts the principal amount of the loan.
Credit appraisal
This finance terminology refers to the assessment process conducted by a lender before approving a sanction. This involves checking the applicant’s credit score, fixed obligation to income ratio, income stability, and if the applicant has a history of being a loan defaulter. Credit appraisal is a key part of the process and lenders won’t approve applications without doing their due diligence.
Deferment
In the context of borrowing and lending funds, deferment refers to the provision where lenders allow you to pause payments for a set period. This is based on the agreement between borrower and lender, and mostly comes into play only in instances of financial hardship. Deferment terms will be listed in the loan agreement.
e-NACH
This is simply the digital upgrade of the NACH, which is a provision offered to you by lenders to automate EMI payments. The e-NACH provision is a framework that exists completely online. With an e-NACH mandate, you can authorise recurring payments from your account for a wide range of services.
EMI
This term is an acronym that stands for equated monthly instalment. In a loan agreement, it denotes the monthly amount due during the entire loan repayment process. When planning your loans, always check the EMI amount and ensure that it fits in your budget. Any discrepancies in the EMI details must be addressed immediately.
Lender
This term refers to the financial institution or credit lender in question. As per the latest RBI regulations, authorised lenders may be referred to as Regulated Entities (REs) or Lending Service Providers (LSPs), based on their categorisation.
Guarantor
A guarantor is an individual who agrees to share the financial responsibility of repaying the loan if the primary borrower fails to hold up their end. Guarantors are often required when the primary borrower requires a large sum of money but doesn’t have a strong enough profile to back the requirement.
Lien
This is a common loan terminology that you will come across when availing secured loans. Simply put, lien means the lender’s legal claim on your assets until you have completely repaid your debt. When availing a Instant loan of any kind, take note of this term and any clauses associated with it.
Default
Default in any credit agreement means the act of non-payment. It is on one of the important credit terms to know as lenders have varying default penalties applicable. As such, knowing the meaning helps ensure that you have a better idea of the terms and conditions applicable.
Term
The term simply refers to the loan period or the tenure of the loan. It is the loan repayment window applicable and will be clearly listed on the loan agreement. You should note the term of the loan before approving or authorising disbursal as it does impact the cost of borrowing.
Loan agreement
This is a document shared to applicants by the lenders once the credit appraisal process is complete. This document formalises the loan and has all the vital information of the loan. You will have to approve the loan agreement, and will now also receive a Key Fact Statement that contains loan information.
Origination
This is sometimes listed as the origination fee or processing fees, and it means the cost applicable on your loan. These fees are charged by lenders for providing credit services and are sometimes expressed as a percentage rather than a flat amount. Keep an eye on these charges as they can be quite high.
Prepayment
Prepayment is the act of paying a portion of the outstanding loan or the entire outstanding amount ahead of the tenure. In all loan agreements, you should look for the prepayment terms and fees applicable as foreclosure of loans can save you a lot of money.
Fixed/Floating interest rate
Floating or fixed interest rate primarily refers to the interest rate applicable on the loan. The floating variant means that the interest rate may change based on market movements, whereas the fixed interest rate is locked in from day one. It is important to know the meaning of both to borrow efficiently.
Principal
The principal is the loan amount. This amount is also referred to as the sanction and will denote the full amount approved by the lender. There may be certain charges and fees applicable on the loan, which get deducted from the principal amount. Also, during loan repayment, the principal amount reduces with each payment you make.
While this isn’t an exhaustive list of the terms you may encounter when availing loans, understanding these important loan terms is vital. It can give you a leg up in negotiations with your lender, and help you make better borrowing decisions. However, if you come across other terms and have doubts about your loan or the offer made to you, get them cleared right away.
Most lenders will have dedicated support teams and relationship managers who can offer you needed insight. To ensure that you have a hassle-free experience, pick your lender wisely. One smart option is Fibe with whom you enjoy a completely digital, transparent and simplified experience.
Highlight: Apart from financial safety, the thing that job seekers nowadays consider is employee benefits. Providing these benefits plans might help the organisation attract great talents. Read to find some awesome perks a company can offer its employees to bring them back to offices after lockdown, and how Fibe can help.
Employees are, no doubt, an organisation’s most valuable asset. But organisations often fail to recognise that salaries are more a threshold than an effective measure to keep the employees happy and engaged. Back to work perks and incentives remain a great opportunity for companies to utilize the untapped potential and take advantage of the talent pool.
The post-covid times, especially, have reinvigorated the appeal of these non-monetary benefits as a great way to bring employees back to office after lockdown and push them to work full-time from there. Many companies, including Google, Deliveroo, DailyPay etc., are opting for the carrot over the stick and offering special return-to-work perks.
5 Perks to Include in the Updated Compensation Plan
Figuring out how to welcome employees back to the office after lockdown? Here are some of the most popular work back to work perks to consider:
Paid time-off: Proactive companies provide open vacation or Paid time-offs for their employees. The employees can take as much vacation time as they need. In return, they have to meet the deadlines and produce high-quality work. These kind of back to work benefits will actually motivate employees to not only return, but give their best shot in the work they do.
A study shows that long-term happiness is achieved from good experiences, not material things. An open vacation policy boosts employees’ productivity and efficiency. The only catch is that employees should meet deadlines and produce results. Companies adopting these policies notice a win-win ownership mindset in the employees. These employees think for themselves and the growth of the company.
Offer a Flexible Schedule: Logging more hours into the employee’s work schedule does not guarantee higher productivity. Organisations should act proactively and give them a chance to explore their most productive times of the day. A traditional workweek is outdated in 2022 and it’s high time employers realize this, especially if they’re looking to introduce return to office perks.
Having a hybrid work model and giving employees the flexibility to work for some days in a week from wherever they feel comfortable – whether office or home – can help organisations bring more workers to their desks post-pandemic.
Allowing employees to have time outside of the office improves their mental health. A study showed an increment of 12% in employees’ productivity levels who possess mental well-being. A better option is reducing the working days to 4 per week. Clearly, return to work benefits like these improve outcomes not just for the employee, but also for the organization as a whole.
App-based Wellness Programs: Proactive companies are adopting app-based wellness programs for their employees. These apps give employees a space to choose numerous wellness packages related to mental health, financial wellness, life coaching, exercises etc. 88% of workers consider that health and wellness programs give employers a competitive edge when it comes to company culture – for both current and prospective employees.
Online wellness programs are a great idea for back to work benefits allowing employees to take these classes at home or from their desks without fearing health risks. Plus, there is something for everyone to choose and benefit from and this will significantly attract more employees back to office after lockdown.
Rest and Relaxation Perks: Adding return to office perks beyond work desks and PCs, such as cafeterias, gyms, shopping complexes, creches etc., can help employees maintain work-life balance and encourage them to return to offices. Employees can be given free memberships or coupons for these utilities. These changes would help improve the mental well-being of employees and encourage a healthy lifestyle. Happy employees are the most productive ones. What could be a better perk than this?
Celebration Perks: Have you heard about Google organising the return-to-work celebration? The concept is interesting. This could be a great opportunity for the employees to build relationships with the new and existing employees.
These kinds of return to office perks come with many benefits. First, it might boost the level of excitement in an employee to return to work. Second, it might leave them curious about the purpose of the celebration. The celebration could be related to the company’s success or some new offers. The more employees are aware of the benefits of returning to office, the more motivated they will be.
Celebrating birthdays and individual successes, meetups, organising weekend parties, fun activities or interaction sessions could be a ritual to keep the workplace brimming with life and a second home for employees.
Provision of Food: Free meals may work as an employee-retention magnet and give a big boost to their productivity. A Harvard Business Review study stated, “employees typically consume one or several meals plus snacks during work hours,” emphasising the importance of their food.
The company can pay for some of the employees’ meals, offer them food discounts or provide longer meal breaks. Organising occasional lunch and dinner meets can also yield better results.
Bringing people back to office after lockdown won’t be easy in a situation where Covid-19 has not fully vanished. Companies need to build their work engagement policies, work compensation plans, and return to work benefits from scratch to meet employees’ needs in the new normal. As organisations look forward to their employees returning to offices or working on a balanced hybrid work model, new negotiations between the employees and employers on the benefits of returning to the office are bound to change the dynamics and hierarchy of back-to-work benefits.
Fibe offers employee financial wellness programs in tandem with organisations and a catalogue of financial services such as instant loans, salary advances and much more. It helps employees set their finances on track while they work their way to success.
Highlight: An engaged workforce can work 10x better than a skilled but demotivated workforce. The managers need to organise certain activities to engage employees and make them feel responsible for their work.
The key to running a successful organisation is knowing how to improve employee engagement. As an HR, you should understand the level of passion and dedication an employee has towards their work. This would make it easier to bring out the best in them which ultimately would benefit the organisation.
What Is Employee Engagement?
It is a human resource concept that measures employees’ enthusiasm and dedication towards their work and the organisation. In simple terms, when talking about employee engagement, it analyses the team members who are actually participating and the ones just putting up with tasks.
But how to measure employee engagement? For this, the following metrics can be helpful:
Take surveys and feedback on employee satisfaction
Employee Net Promoter Score (eNPS) can provide insights into employee loyalty
Compute the retention rate data based on past and present employee records
Review the attendance records
Calculate the promotion rate by dividing the number of promoted employees by the total number of employees
You can also have 1 on 1 meeting in complete confidentiality to get accurate data
Conduct peer review, exit polls or install suggestion boxes
Why Is Employee Engagement Important?
Some employers think satisfying employees with perks and salaries would be enough to run a successful business. But the truth is far away from this notion – engaging employees in the workplace is just as important.
As a matter of fact, 80% of the employees feel disengaged or less engaged at work, as per a Gallup report. Here are some of the reasons why companies should focus on employee engagement:
It plays a major role in productivity with the organisation’s infrastructure
It acts as a management strategy to yield improved business outcomes for customers or clients
It builds better communications as every member takes the initiative to deliver the best results
It reduces conflicts and builds trust in the company’s leadership and among the employees
It creates a positive environment in the business and reduces the number of leaves an employee takes throughout the year
It reduces burnout among employees, which can negatively impact their mental health
It also decreases the number of absentees in the company, which is a leading cause of delayed deliveries and pushing deadlines
It also increases customer or client retention as better engaged employees are highly involved, increasing their profit for the business
All these factors highlight the significance of developing effective strategies for engaging employees.
How To Engage Employees in The Workplace
Given the importance of having an engaged workforce, you must implement some good strategies that can help you achieve that. Here are some of these:
Know Your Employees Better
Communication is an essential step to engage employees as it would make them feel recognised and appreciated. Here is what you can do:
Talk to them and understand them as individuals
Learn about their background, goals and achievements
Say hello to the employees and inquire about their families or hobbies
Provide Employees with Tools to Achieve their Goals
Another effective way to engage employees is to train them according to their assigned roles. This can help them gain confidence and understand what they’re doing at work and why it is important. If they aren’t trained well, there is a chance they’ll find their work overwhelming which can lead to reduced productivity.
Tell the Employees About the Company’s Progress
As much as HR needs to know about the employees’ progress, employees also need to know about their organisation’s progress. Knowing about the company’s profits and struggles could be a natural motivator to engage employees, as well as a catalyst to work harder. Discussing what works and what doesn’t with your employees can help them come up with ideas that help them, and the organisation, outshine.
Give Them Opportunities to Prove Themselves
HR personnel should remember that the team working in an organisation has cleared a series of interviews and checks based on their credibility. Assign them tasks through which they can show off their skills and talent. This would substantially engage employees, encourage them and make them feel responsible for the specific project.
Recognise Them for Their Hard Work
The key to solid employee engagement and boosting employees’ confidence is giving them the recognition they deserve. Giving them a few compliments in front of the team would motivate them to give positive results in the next project. If HR praised one employee in front of a team, others may try to work hard to receive the same encouragement.
Let Them Lead
Every manager must let go and let their team lead at a point in their life. This is important for them to feel passionate about their work and know that the company has faith in them. Allow them to show their skills and drive the presentation without interference from the higher authority. This goes a long way in boosting employee engagement and morale.
The above-mentioned strategies for engaging employees will impact your organisation positively, provided they’re done correctly. No doubt, employee engagement is crucial to the success of any business. This engagement may take the form of non-monetary factors, work culture and environment or financial wellness programs.
Through effective employee engagement activities, managers can make employees feel that they are a crucial part of the team. In addition to recognising their talent and giving them opportunities to shine. Listen to their feedback and questions, engage in their conversations, be a mentor for them and create a work environment free of fear.
However, if an employee faces financial trouble, there is so much an employer can do to help them. This is where the Fibe Instant Personal Loan can help you help them. They can get up to ₹5 lakhs at an affordable interest rate and for a tenure of up to 36 months. Download our Personal Loan App to enjoy a streamlined application and void lengthy paperwork.
FAQs on Employee Engagement
What are the 5 C’s of employee engagement?
The 5 Cs of employee engagement are as follows:
Care
Connect
Coach
Contribute
Congratulate
How to engage your employees?
Here are some effective strategies HR can apply to increase employee engagement:
Provide positive reinforcement with feedback
Provide recognition with an incentive or positive encouragement
Open the floor for discussions and communication
Encourage ownership over tasks by designating project heads
Provide fair opportunities for growth and promotion
Build a respectful and positive work environment
Create opportunities for learning and growth
What are the best employee engagement activities?
Training programs, group discussions, casual luncheons and timely reviews are some of the best strategies to increase employee engagement.
When you take a loan or use a credit card, you probably look at the interest rate first. But have you ever noticed the term APR and wondered what it actually means? APR, or Annual Percentage Rate, goes beyond just the interest rate. It shows the true cost of borrowing, including the extra fees and charges you might not think about. In its simplest form, the annual percentage rate formula is: APR = [{(Fees + Total Interest) / Principal} / n] x 365 x 100, where ‘n’ is your tenure in days.
Here, we’ll break down APR in the simplest way possible. What it is, what goes into it, how the APR calculation formula works, what counts as a good APR and what the RBI \ says about it. Read on to know more!
QUICK STAT
Since 1 October 2024, every regulated lender in India must disclose an all-inclusive APR in a standardised Key Fact Statement before you sign a retail or MSME term loan agreement. The rule comes from RBI circular RBI/2024-25/18 dated 15 April 2024, which also replaced the earlier APR provisions in the 2022 digital lending guidelines. Source: RBI, Key Facts Statement (KFS) for Loans and Advances, 15 April 2024
What is Annual Percentage Rate (APR)?
APR is not just the interest rate on your loan. It’s the full picture of what you’ll pay yearly to borrow money. It includes the interest plus all other loan-related fees like processing, verification and maintenance charges.
Under RBI’s harmonised Key Fact Statement rules, APR is defined as the all-inclusive annual cost of credit to you as the borrower. It covers interest along with credit and operating costs the lender recovers from you, but it leaves out penalty charges such as late fees or EMI bounce charges. Those are contingent, which means you only pay them if something goes wrong.
What’s Included in the APR?
This is where most borrowers get caught out. Two loans with an identical interest rate can carry very different APRs, and the reason sits in this list. Here’s what your lender must fold into the calculation:
Interest charged on the loan for the full tenure
Processing fees, whether a flat amount or a percentage of the loan
Documentation, verification and administrative charges
Credit and operating costs the lender recovers from you as part of the loan
Insurance premiums, but only where the cover is bundled into the loan itself
Statutory charges such as stamp duty, where the lender collects them upfront
And here’s what stays out of it:
Late payment and penal charges
EMI bounce or mandate rejection fees
Foreclosure or prepayment charges, unless the lender levies them at the start
Any charge that depends on you defaulting or changing the terms later
DID YOU KNOW?
Because penalty charges sit outside the APR, a loan with a low APR can still get expensive if you miss instalments. Read the penal charges row of your Key Fact Statement alongside the APR, not instead of it.
What is Annual Interest Rate and How is It Different from APR?
The annual interest rate is the yearly rate a lender charges on the money you borrow. That’s it. Nothing else is in there. It is one input into the APR, not the whole picture.
Your APR interest rate, on the other hand, is the annual interest rate plus every mandatory charge attached to the loan, expressed as a single yearly percentage. Two lenders can quote you exactly the same annual interest rate and still land on very different APRs, purely because one charges a 1% processing fee and the other charges 3% plus a documentation fee. That’s precisely why APR is the number worth comparing.
Key Points to Know About APR When Borrowing a Loan
Based on the annual percentage rate definition, take note of the following pointers about the APR for a loan you borrow:
It’s shown as a yearly percentage for easy understanding
It reflects the total cost of your loan, not just the interest
It includes all mandatory charges tied to your loan
It doesn’t include penalties for late payments or defaults
It helps you compare loan offers accurately
RBI Mandates Two Key Facts About APR
Below are the 2 things the RBI wants you to know about APR:
Annual Percentage Rate and Insurance
Insurance charges are considered when calculating a loan’s APR only when the insurance is linked to the loan. Assuming you are taking a home loan where the insurance component integrates into the loan, only then are lenders adding it when computing the APR. A standalone policy you buy separately doesn’t affect your loan’s APR.
Annual Percentage Rate for Loans with a Floating Interest Rate
When it comes to loans with rates that fluctuate based on market conditions, the APR will change too. In such cases, the RBI mandates that lenders disclose the APR in the Key Fact Statement using the rate applicable at the time of loan origination. When a revised APR applies, lenders need to share the updated figure with borrowers through further communication at the applicable time.
Types of APR
Here is a brief collection of some common types of APR rates in India:
Fixed APR: The interest remains fixed throughout the tenure of the loan
Variable APR: The interest rate can vary depending on the repo rate or market fluctuations
Credit Card APR: The interest charged over the outstanding amount or cash advance on a credit card
Purchase APR: The interest applicable on purchases or expenses made through a credit card
Cash Advance APR: Applicable if a cash withdrawal is made using a credit card
Balance Transfer APR: The interest applicable when an amount is transferred from one credit card to another
Nominal APR: Interest without extra fees and compounding. It applies to all types of loans
Effective APR: The interest applicable on all types of loans, including fees, additional costs, compounding and the cost of borrowing
Introductory APR
An introductory APR is a promotional rate, sometimes as low as 0%, that a card issuer or lender offers for a limited window. You’ll see it most often on new credit cards and balance transfer offers. The catch is what happens next: once the promotional window closes, the standard purchase or balance transfer APR applies to whatever balance is still outstanding. Check the exact end date before you commit, not after.
PRO TIP
If you’re using an introductory APR to clear a balance, work backwards from the offer end date and split the balance into equal instalments. Clearing it a month early costs you nothing. Clearing it a month late can wipe out the entire saving.
Penalty APR
A penalty APR is a higher rate that some card issuers apply once you breach the card terms, usually by missing payments. In India, issuers more commonly levy a flat late payment fee and continue charging the standard revolving rate rather than switching you to a separate penalty rate, so the practice varies by card. Your card’s Most Important Terms and Conditions document will tell you which approach your issuer follows.
Fixed APR vs Variable APR
Choosing between the two comes down to how much certainty you want in your monthly budget, and how long you’ll be repaying. Here’s how they compare:
Parameters
Fixed APR
Variable APR
How the rate behaves
Stays the same for the entire tenure
Moves with the repo rate or the lender’s benchmark
EMI predictability
Your EMI stays constant, so budgeting is simple
Your EMI or tenure can change mid-loan
Best suited for
Short tenures and borrowers who want certainty
Longer tenures when rates are expected to fall
Main risk to you
You miss out if market rates drop
Your cost rises if rates go up
Where you’ll see it
Most personal loans and consumer durable loans
Many home loans and longer-tenure secured loans
Disclosure rule
APR is stated once in the Key Fact Statement
A revised APR must be communicated whenever the rate resets
In practice, a fixed APR suits a 12-month or 24-month personal loan, where a rate cut wouldn’t have saved you much anyway. A variable APR makes more sense on a 20-year home loan, where even a small drop in the benchmark compounds into real savings over time.
Difference Between APR and APY
The APY rate is the annual percentage yield rate. It is primarily applicable to investments. Under current RBI disclosure norms you should get this information when you invest online, and it’s worth double-checking your Key Fact Statement so there are no misunderstandings.
Parameters
APR (Annual Percentage Rate)
APY (Annual Percentage Yield)
Definition
Interest applicable on the amount you borrow on credit
Interest you earn within a financial year as an investor
Compound interest
Does not add compound interest to the calculation
Adds compound interest to the calculation
What you want
Lower is better, because you’re paying it
Higher is better, because you’re earning it
Calculation
Includes additional fees like lending, processing and settlement charges
Does not consider any additional fees
Influenced by
Market conditions, your credit profile and the lender’s fee structure
Market conditions, compounding frequency and the tenure of your investment
Remember, both terms matter and you’ll come across them when applying online. However, the APR gives you a holistic view of the undertaking. This is why you must compare the APR for various loan offers to know which one suits your capabilities best. The APR helps you arrive at the real cost of borrowing credit.
APR Formula: How is Annual Percentage Rate Calculated?
You can calculate it using a free digital calculator or by doing it manually. All you need are the key values of the loan:
Principal amount
Loan tenure
Interest rate or total interest payable
Associated fees
To know the fees payable, check with your lender. Sometimes these charges are a percentage of your loan amount, while some lenders levy a flat charge. No matter the expression, you can simply input the values and get an accurate result.
The manual APR calculation formula is as follows:
APR = [{(Fees + Total Interest) / Principal} / n] x 365 x 100, where ‘n’ is the number of days, as per the tenure.
PRO TIP
The step people get wrong is the tenure. Convert months into days before you divide: multiply the number of months by 30.42, or simply use 365 days for a 12-month tenure and 730 for 24 months.
Example 1: A 24-Month Loan of Rs. 1,60,000
Consider a loan of Rs. 1,60,000 with total interest payable of Rs. 24,000, a tenure of 24 months and associated fees of Rs. 6,000.
Add the fees and the total interest payable, which comes to Rs. 30,000
Divide this by the loan amount: Rs. 30,000 / Rs. 1,60,000 = 0.1875
Divide that value by the tenure in days: 0.1875 / 730 = 0.0002568
Multiply by 365 and then by 100: (0.0002568 x 365) x 100 = an APR of 9.37%
Example 2: A 9-Month Loan of Rs. 80,000
Shorter tenures behave differently, and this is the example most borrowers need. Take a loan of Rs. 80,000 with total interest of Rs. 5,400, a processing fee of Rs. 1,600 and a tenure of 9 months, which works out to roughly 274 days.
Fees plus total interest: Rs. 1,600 + Rs. 5,400 = Rs. 7,000
Divide by the principal: Rs. 7,000 / Rs. 80,000 = 0.0875
Divide by the tenure in days: 0.0875 / 274 = 0.0003193
Multiply by 365 and then by 100: (0.0003193 x 365) x 100 = an APR of 11.66%
Here’s what’s worth noticing. If that same Rs. 7,000 total cost were spread over a 24-month tenure instead, the APR would drop to 4.38%. Nothing about the fee changed. Only the time you had to absorb it did. A one-time processing fee always bites harder on a short loan, which is why a 3-month or 6-month advance can carry a startlingly high APR even when the headline interest rate looks reasonable.
Why Your Lender’s APR May Differ From This Calculation
Use the formula above as a quick comparison tool, not as a substitute for the number your lender gives you. It annualises your total cost in a straight line, which works well for like-for-like comparisons but doesn’t account for the fact that you repay principal every month.
Regulated lenders compute the APR in the Key Fact Statement using an internal rate of return method, which factors in the timing of each instalment. For a reducing-balance loan, that figure will usually be higher than the simple calculation above. So when you’re comparing two offers, compare the APRs printed in their respective Key Fact Statements. That’s the apples-to-apples number.
What is a Good APR?
There’s no single number that qualifies as good, and any article that gives you one is oversimplifying. A good APR depends on the product you’re borrowing against, your credit profile and the tenure you pick. What’s competitive for an unsecured personal loan would be terrible for a home loan.
Here are indicative ranges to anchor your expectations:
A useful rule of thumb: if the APR sits within 1 to 2 percentage points of the quoted interest rate, the fees are modest. If the gap runs wider than that, go looking for what’s inflating it.
How Meghna Compared Two Personal Loan Offers on APR
Meghna, 31, works as a marketing executive in Pune and needed Rs. 2,00,000 for a home renovation over a 12-month tenure. She had two sanction letters on her desk.
Lender A quoted total interest of Rs. 20,000 and a processing fee of 1%, which came to Rs. 2,000, with no other charges. Total cost of borrowing: Rs. 22,000, giving an APR of 11%. Lender B quoted lower total interest of Rs. 18,400, but charged a 3% processing fee of Rs. 6,000 plus a Rs. 1,200 documentation charge. Total cost: Rs. 25,600, giving an APR of 12.8%.
Lender B looked cheaper on the interest rate. It cost Rs. 3,600 more. Meghna went with Lender A, and the only reason she spotted the difference was that she compared APRs instead of interest rates.
WATCH OUT
APR ranges published by digital lenders can be genuinely wide, sometimes spanning 17% to 45% depending on your profile and tenure. The rate you’re offered is the one in your Key Fact Statement, not the lowest number in the advertised range. Check it before you accept.
Before you sign, run through this quick checklist:
Find the APR in the Key Fact Statement, not the marketing page
Confirm whether the processing fee is a percentage or a flat amount
Check whether insurance has been bundled into the loan
Read the penal charges row, since those sit outside the APR
Compare APRs across lenders at the same tenure, otherwise the comparison is meaningless
Digital lending has made it quicker and easier to access funds. So pick a lender that’s transparent about what borrowing actually costs you. With Fibe’s Instant Personal Loans, your interest rate, processing fee and APR are all set out in the Key Fact Statement before you accept, so there are no surprises later. You can borrow up to Rs. 5 lakhs for travel, a wedding, education, shopping, home repairs or a medical emergency. Download our Instant Loan App or log in to our website to get started.
FAQs on APR Calculation and the Annual Percentage Rate Formula
1.What is the annual percentage rate formula?
The annual percentage rate formula is APR = [{(Fees + Total Interest) / Principal} / n] x 365 x 100, where ‘n’ is your tenure in days. You add the total interest and all mandatory fees, divide by the principal, divide by the tenure in days and then annualise the result by multiplying by 365 and 100.
2.What is the APR calculation formula for credit cards?
Credit cards use a daily periodic rate. Divide the APR by 365 to get the daily rate, then multiply by your average daily balance and the number of days in the billing cycle. On a 42% APR with an average daily balance of Rs. 30,000 over a 30-day cycle, the daily rate is 0.115% and the interest works out to roughly Rs. 1,036.
3.Is annual percentage rate the same as interest rate?
No. The interest rate is only the cost of the money you borrow. The APR is the interest rate plus every mandatory fee attached to the loan, expressed as one annual percentage. The APR is always equal to or higher than the interest rate, never lower.
4.Is APR better than interest rate?
For comparing offers, yes. The APR represents your full cost as a borrower because it folds in additional fees and charges alongside the interest rate. Knowing the APR tells you the final cost of borrowing rather than just the headline rate.
5.What percentage of APR is good for a personal loan?
Anywhere from 14% to 20% is competitive for an unsecured personal loan in India, though it depends on your credit profile and the lending climate. Rather than fixing on a figure, compare the APRs of several personal loans and choose the most affordable one you can comfortably repay.
6.Does APR matter on a personal loan?
Yes. Personal loans are unsecured, so processing and documentation fees make up a meaningful share of the cost. The APR captures those, which the interest rate alone does not.
7.What is the highest APR for a personal loan?
The APR on personal loans varies with the interest rate the lender offers and the other charges applicable to the loan. At the upper end it can reach around 45%, typically for short tenures or borrowers with a thin or weak credit history.
8.How do you convert APR to the interest rate?
Remove the other loan charges from the APR calculation and you arrive back at the interest rate. In practice, it’s simpler to read the interest rate directly from your Key Fact Statement or ask the lender.
9.How to estimate APR?
Use APR = [{(Fees + Total Interest) / Principal} / n] x 365 x 100, where ‘n’ is the number of days. Add the fees and total interest payable, divide by the loan amount, divide that by the tenure in days, then multiply by 365 and by 100.
10.How is APR calculated monthly?
Divide the APR by 12 to get your monthly periodic rate, then multiply that by your current outstanding balance. This is how card issuers and lenders arrive at the interest charged in a given month.
11.How does APR measure the true cost of a loan?
The APR measures the true cost because it accounts for the interest rate as well as the other charges tied to borrowing the amount, all expressed as a single annual percentage you can compare across lenders.
12.What is APR on a credit card?
It’s the interest applicable on a credit account, which you pay when there’s an overdue balance. Credit cards are outside the scope of the Key Fact Statement rules, so check the Most Important Terms and Conditions document for your card’s purchase, cash advance and balance transfer APRs.
13.I paid my card bill in full every month. Why am I still seeing an APR on my statement?
The APR is printed on your statement whether or not you’re being charged. Clearing the full statement balance by the due date means you use the grace period and pay no interest on purchases. Cash withdrawals are the exception, since they usually start accruing interest immediately with no grace period.
Learning how to apply for a home renovation loan can help if you plan to give your home a new makeover. Homes need renovation from time to time to stay sturdy and comfortable. However, the undertaking is expensive. This is where a personal loan for home renovation helps by providing the required funds.
You can apply for a personal loan for home renovation from your smartphone. Whether you want to repaint your house, redesign your kid’s room, redo your bathroom or kitchen, or replace your windows, doors, or tiles, you may give a brand-new look to your home using your home renovation loan.
Here are some essential points that you need to know before opting for a home renovation loan.
Process of Applying for a Home Renovation Loan
What’s more, you can get an instant loan online through a website or an app. Just log in to your selected lender’s website or download their app and start the application process. These are the simple steps to follow:
Step 1: Visit the lender’s website or download and install the app Step 2: Check the lender’s home renovation loan eligibility criteria Step 3: Create an account or register via your existing account Step 4: Fill up the online application form and enter your details, including your identity, address, employment and bank details Step 5: Provide your loan requirement details Step 6: Submit the application form
Once you submit the application form, you will get confirmation about whether or not you are eligible for a personal loan for home renovation. You also get an idea of the loan amount the lender will offer.
If you accept that loan offer, you must scan and upload a few documents to prove your identity, address and income. If everything goes smoothly, you will receive your loan amount disbursed directly into your bank account.
Benefits of Applying for a Home Renovation Loan Online
Online loans have become extremely popular among prospective borrowers due to the multiple benefits they offer.
1. 24/7 Availability
You can log on to your lender’s website or app 24/7, irrespective of their working hours. When you require an instant loan online, you can access it anytime and get the needed funds when you need them the most.
2. Convenience
You can apply for a loan online for anything you want in minutes. Whether you are at home or office, travelling or in the hospital for a medical emergency, you can submit your application within minutes and get funds instantly.
3. No Paperwork
NBCs have minimal documentation requirements, including your address, identity and income proof. However, you don’t need to visit the lender’s office to submit these documents. Fibe’s loan application process is paperless and you can complete it online hassle-free. Simply scan and upload the required documents and get a loan in seconds.
4. Faster Approval and Disbursal
A personal loan for home renovation does not require any collateral, guarantor or security. You can quickly accept the loan offer, select your repayment tenure and complete the remaining formalities online. Fibe uses a proprietary Al/ML-based algorithm that disburses loans in just 10 minutes.
5. Online Loan Tools
While applying for a personal loan, NBFCs offer several loan-related tools to make loan applications easier for you. Some of the most helpful tools include:
Credit Score Checker: Most NBFCs have a minimum credit score requirement that you must meet to avail of their personal loan. An online credit score checker tool helps you check your credit score for free. Based on the results, you can decide to apply for the loan, choose another lender, or take steps to improve it.
Personal Loan Eligibility Calculator: A personal loan eligibility calculator helps you confirm your loan eligibility. After entering your loan requirement, it displays the loan amount you are eligible for.
Personal Loan EMI Calculator: Most personal loans come with flexible repayment terms. They allow you to choose your loan term according to the EMI amount you are comfortable paying each month. Enter your loan amount and interest rate and select a loan tenure to know what EMI amount you have to pay for that loan term.
Depending on your monthly budget and repayment capacity, you can adjust the loan term until you find an EMI amount you can conveniently manage.
These are the major benefits of applying for an instant loan online. Getting Instant Personal Loans from lenders like Fibe offers a paperless procedure and fast loan processing. This loan comes without any restriction on end use, allowing you to utilise the funds to renovate your home.
Download the Personal Loan App here, or log in to our website and enjoy a quick application process!
FAQs on the Home Renovation Loan
Which loan is the best for home renovation?
Various financial institutions provide home renovation loans. You can also opt for a personal loan and use the funds to renovate your home. Since these loans come with attractive interest rates and no restriction on end-use, they can be a great option to finance your home renovation.
Also, the documents required for home renovation loans and the eligibility criteria are minimal. You can get a personal loan from lenders like Fibe, which offers loans of up to ₹5 lakhs instantly.
What is the difference between a home loan and a home renovation loan?
A home loan refers to a form of credit that you get to finance the purchase/construction of a new home or property. This loan comes with an agreed-upon rate of interest and repayment period. On the other hand, you can opt for a home renovation loan to modify, expand or upgrade your existing home.
Personal loans are the preferred choice when you want instant funds to cover your planned or urgent expenses. Most of these loans come with flexible repayment tenures that you can choose as per your convenience. Choosing an extended loan term reduces the EMI amount and makes repayment more manageable. However, managing it for such a long time becomes challenging for many. Therefore, here are a few top tips to help you manage a long-term personal loan efficiently.
1. Make a Budget
Making a budget is the best step to improve your financial situation and manage loans better. Managing a long-term loan without budgeting makes you confused and vulnerable. You don’t know where your money is going and how much you are spending unnecessarily. If you save less than you should, creating a budget would be the best answer.
To create a budget, categorise your expenses into groceries, bills, entertainment, etc. Broad and simple categories make calculations and monitoring easier. Once you identify your unnecessary expenses, try to keep tabs on them to make loan management easier.
2. Pay Your EMIs on Time
Paying your EMIs on time every month is an efficient way to avoid late payment penalties. Missing payments also reduce your credit score, which ultimately affects your creditworthiness. With better financial management, you can stay on top of your EMI payments and avoid these consequences. Once you create your budget, you will find EMI payments much easier to manage.
Make a financial plan and keep a portion of your income aside every month to pay your due EMIs. If you keep forgetting your EMI payments, consider activating the e-mandate to pay your EMIs from your bank account automatically. Another tip is to pay one early EMI as you receive your loan amount. Doing this will keep you ahead of your EMI payment plan and give you a buffer against a missed EMI.
3. Pay Extra Whenever Possible
Just like paying one early EMI, paying extra whenever you can also maintains a buffer for a missed payment. This critical strategy keeps you ahead of your repayment term and attracts additional perks from your lender. Paying extra will reduce the overall loan term of your repayment plan and help you clear your debt sooner. Paying your personal loan earlier will save you money by lowering your interest outgo. Besides that, paying debts faster than the loan term will increase your credit score. As a result, you improve your chances of instant loan approval in the future at reduced interest rates.
If you consider paying extra on your loan EMIs, ask about the pre-payment charges you need to pay to the lender. While many lenders allow borrowers to pay loans faster without pre-payment charges, others may charge hefty pre-payment charges. Since such charges negate the advantages of early loan repayment, enquire about them to build a lucrative strategy.
4. Consolidate Your Debt
If you are managing multiple loans, consolidating them would be an excellent way to simplify your debt management. When you do that, you take out a single, bigger loan to repay all your existing loans. Then, you make a single payment to one lender, rather than making multiple EMIs to several lenders each month with different loan terms, interest rates, and other requirements. Many people take long-term personal loans to consolidate their debt and pay their EMIs over several years.
Debt consolidation is particularly helpful if you pay high-interest rates on some loans. However, before taking a personal loan for debt consolidation, check your budget and ensure that you can pay its EMIs on time.
5. Maintain a High Credit Score
Closely monitor your credit score while managing your long-term personal loan. This 3-digit number plays a crucial role in your financial history, and lenders give it due importance while approving your loan application. Your credit also significantly impacts your loan amount, interest rate, and repayment term. It reflects your credit behavior and repayment history. Staying ahead of your loan EMIs helps you maintain a high credit score and improve your credibility for the future.
6. Use Automatic Payment System
If you keep forgetting your EMI payments, try setting up an automatic debit directly from your bank account. By doing that, you don’t need to remember to pay your EMIs each month. The EMI amount will be directly debited from your bank account and transferred to the lender. However, you need to ensure that you maintain a sufficient balance in your bank account before the due date. One helpful tip would be to set up the automatic debit a couple of days after your payday. There are high chances that you will have enough money in your bank account on that date.
7. Control Expenses and Save Money
When you create your budget, you will identify where you are spending your hard-earned money unnecessarily. Little expenses here and there quickly add up and disturb your budget. Reduce your movie dates and dine-outs, control those impulsive shopping urges, and switch off lights to save on utility bills. Money-saving tips like these help you save a little more, which you can put towards your EMI payments. Once you pay off your loan, you will have enough money at your disposal to fulfill the urges you controlled all these years.
Managing long-term personal loans becomes stress-free and pretty straightforward once you work out the tips provided above. Stay disciplined with your finances, set a budget, and pay your loan EMIs regularly to stay ahead of the curve. Once you become debt-free, you will breathe easier and enjoy the money you have on hand.
Are you looking for funds to cover your expenses? Apply for an instant loan for a loan term of up to 24 months and use the tips mentioned above to manage it like a pro.
