BIG changes for personal loans: RBI announces new guidelines
The Reserve Bank of India (RBI) has implemented new restrictions on personal loans, impacting borrowers across the country. This article details the changes and their potential effects.
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Personal Loans
Many Indians rely on loans for various needs, including housing, education, employment, and vehicles. Personal loans are particularly popular for covering expenses like medical emergencies. Numerous private banks and financial institutions offer these loans, often with attractive interest rates and EMIs.
Personal Loans
RBI Restrictions
The RBI has introduced new restrictions on personal loans, requiring lenders to report borrowers' credit scores and records every 15 days. These rules, effective from January 1, will subject personal loan applications to stricter scrutiny. This will make it difficult for borrowers to take out multiple loans without repaying existing ones.
Personal Loan Interest Rates
Credit Score Verification
Experts suggest the RBI's move aims to improve credit risk assessment and curb unnecessary borrowing. The stringent regulations are expected to significantly reduce personal loan circulation this year. Frequent credit score checks will enable lenders to better assess borrowers' repayment capacity.
Impact on People
Impact on Common People
These restrictions, announced in August and effective from January 1, are seen as a setback for low and middle-income individuals who heavily rely on personal loans for festival expenses and medical emergencies.
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