FAQ
Frequently Asked Questions
Everything you need to know about the product and billing.
What is a Personal Loan?
A personal loan is an unsecured loan offered to individuals to meet
their lifestyle or financial needs. It is also known as an “any-purpose loan,”
as it can be used for a wide range of expenses.
What is the purpose of taking a personal loan?
As a lifestyle loan, a personal loan can be used for almost any type of
expense, ranging from major purchases like appliances to luxury vacations. This
flexibility is why it is also referred to as an “any-purpose loan.”
What are the prevailing interest rates for personal loans?
Personal loan interest rates currently range from 9% to 12%, depending
on the bank and the applicant’s profile.
What is the minimum and maximum amount for a personal loan?
The loan amount varies from bank to bank. However, it typically ranges
from BDT 50,000 to BDT 2,000,000.
What is the usual tenure of a personal loan?
The tenure typically ranges from 12 to 60 months, depending on the bank.
In some cases, shorter or longer repayment periods may be offered on a
case-by-case basis.
How can I get a personal loan easily?
You can apply for a personal loan by logging in to FinCoach, selecting
your preferred bank or branch, and clicking “Apply.” You will then be
redirected to the bank’s application form. Complete the form, upload the
required documents, and submit your application. The bank will contact you
through your FinCoach account, and if everything is in order, your loan will be
approved and you will be notified promptly.
What is the eligibility for a personal loan?
To be eligible for a personal loan, you typically need a stable and
regular source of income, whether from salaried employment, business, or
self-employment. Additionally, factors such as your lifestyle, spending
patterns, employment duration, and employer profile may also influence your
eligibility.
What are the key documents required when applying for a personal loan?
The required documents
may vary from bank to bank based on their credit criteria. However, the most
commonly requested documents include:
- National ID (NID) and/or other identity
proof
- Recent passport-sized photographs
- Salary certificate for salaried
individuals; trade license and other business-related documents for
self-employed applicants
- Proof of income (e.g., pay slips, bank
statements, latest tax returns, or company financials for business owners)
- Additional income proof, such as rental
agreements (if applicable)
- Address proof (e.g., utility bill copy)
- Two references (one personal and one
professional)
How is the maximum loan amount decided?
The maximum loan
amount is determined based on your total income and how much you can
comfortably save each month after meeting all existing financial obligations. A
key factor in this assessment is the Debt Burden Ratio (DBR), which represents
the percentage of your monthly income used to repay debts.
For example, if you
earn BDT 100 per month and your total monthly loan installments (including the
proposed loan EMI) amount to BDT 50, your DBR is 50%.
Typically, banks
ensure that your DBR—including the proposed loan EMI—does not exceed 50% to 60%
when deciding the maximum loan amount.
Can I apply for a personal loan jointly with my spouse?
Yes, you can apply for a personal loan either individually or jointly
with your spouse or other family members. Applying with a co-borrower can
increase your combined income, which may improve your loan eligibility.
However, if any co-borrower has a weak credit history, it may negatively impact
the overall application.
How do I decide which bank or financial institution to choose for a personal loan?
You can easily make this decision using the FinCoach platform. FinCoach
provides transparent and reliable information on various banks and their loan
products, allowing you to compare them based on criteria such as loan amount,
interest rate, tenure, processing fees, and other charges. This simplified
comparison helps you choose the option that best suits your needs.
How do banks decide the maximum personal loan amount I can get?
Banks determine the maximum loan amount based on your disposable income
and your ability to comfortably repay the monthly installments (EMIs). Your
existing financial obligations and overall repayment capacity are key factors
in this assessment.
How can I get the lowest interest rates on a personal loan?
You can log in to FinCoach to compare interest rates, fees, and other
charges across different banks. This unbiased comparison helps you identify the
most competitive options and apply through the platform with ease.
Are there any extra charges when applying for a personal loan?
No, FinCoach does not charge any fees for processing your loan
application. The service is completely free of charge.
Are personal loan interest rates fixed or floating?
Personal loan interest
rates are generally fixed. However, banks may include a clause in the loan
agreement allowing them to change the rate at their discretion under certain
conditions.
How is a personal loan disbursed?
Once your loan is approved, you will be notified through FinCoach. You
will then need to complete the required documentation provided by the bank.
After the formalities are completed, the loan amount is either disbursed via an
account payee cheque/draft or directly credited to your savings account
electronically.
How long does it take for a personal loan to be disbursed?
The disbursement time varies from bank to bank, but it typically takes
around one week for the loan to be processed and disbursed.
What is the difference between part payment, pre-payment, and pre-settlement? Are there any related charges?
- Part Payment:
Part payment refers to paying a portion of the outstanding loan amount before it is due. This reduces the principal balance and may lower future EMIs or shorten the loan tenure. - Pre-payment:
Pre-payment occurs when you repay a part of your loan before the scheduled EMI due dates. The amount paid can be partial or, in some cases, close to the total outstanding balance. Banks usually charge a pre-payment fee ranging from 1% to 2% of the outstanding loan amount, depending on their policies. - Pre-settlement:
Pre-settlement means fully repaying the entire outstanding loan amount before the end of the loan tenure. Similar to pre-payment, banks may charge a pre-settlement fee, typically between 1% and 2% of the outstanding amount, though this varies by bank.
What are late payment fees or charges?
Late payment fees are additional charges applied by the bank if you fail
to pay your EMI on the due date. Typically, banks charge a penalty of around 2%
on the overdue EMI amount, calculated for the number of days the payment
remains unpaid.
