#layman #loans #privatefinance
Hey everybody welcome back to layman loans in this video we’re gonna see whether you will have a need to take a private finance in your life so first of all let’s see what is the private finance and then we’ll see the pros and cons of getting a private finance fundamentally what is a private finance if an individual lender it can be an individual or a company not
Exactly a bank or an pfc but technically a private company or a private lender tries to lend you a loan against your property or in an unsecured way as a personal loan then that is called as a private finance what kind of metrics they ask in order to secure private finance firstly they’ll see whether your monthly turnover is above say minimum five lakhs or ideally
10 lakhs or more and they will give you an ultra short term loan of say five lakhs or 10 lakhs and ask you to repay the entire loan within about three to four months or maximum one year so a private finance loan usually doesn’t go more than one year at all usually it is a three month loan or a four month loan maximum six months loan at the max of one year low so
It’s going to be a very short term loan and the tenure and the emi amount would be pretty high because as the tenure decreases the emi amount increases in a private finance they will even ask you to pay a bi-weekly emi that is every 15 days you will have to pay one emi so in a month you will be actually asked to pay two emis also and the entire loan will be over
Within like four months time so in eight installments paid in four months time entire loan will be closed but you know the rate of interest will be crazy high it can vary anywhere between 40 percent to even 100 to 120 percent it is even required to go for such a finance our strong recommendation is never a private finance is not at all advisable purely for the
Fact that it is a very very high interest low if you see from a five private financial point of view they are actually taking a high risk on you you will actually end up going to a private finance only if you are not qualified to get a loan through any banking institutions that’s a bank or an nbfc only then you will even look for a private finance but the kind
Of risk involved for the private financial to lend your loan itself is very high because of which they charge a very high premium in the interest rate and they will really charge an exorbitant amount of 30 to 40 or even 100 interest on the amount they are given so as you keep leaving this loan for longer period assume you are not able to pay back the entire loan
Within four months and it goes to six months or one year or two years technically you will end up paying three times the amount what you have taken within the period of one or two years time all right so it is going to take off all the hardened money from you and it is definitely not at all documented uh people will say only during very press times very desperate
Times you can go for a private finance for a short term rotation but from our point of view it is never recommended there are so many proper secure channels of loans available through multiple banks and nbfcs which are coming under the radar of rbi and it is directly controlled by the rba rules so always go for loans which are rbi governed only then you will be
Able to make use of the benefits and even the process of getting back the loan will be completely regulated from the rba if it is going to be a private finance then possibly assume you fail to pay one emi they can literally come to your home and ask you to pay the amount or if not they can just assume they have pa financed your vehicle or finance your home they
Can literally take the asset within one or two months time there is literally no specific tenure they need to wait so if a bank needs to take back a property then there is a huge process involved which is a complete governing process it’s all rba regulated so for instance there’s a home loan and you did not pay one emi they will only send you a reminder message
That you have failed to pay one emi and they’ll start calling you by the end of the month that you have to make the emi so second month also you have not paid then possibly they’ll send you a mail and the request letter that you have to pay an email and they’ll send you people to remind you to make the payment by third month if you fail to pay they will send you
Something called as a loan recall notice where they’ll ask you to pay the entire outstanding loan or pay back their emis which you have missed either of these two you have to comply if not you will have to settle the entire law and the last stage if you have missed all three emis only then after 60 days they will literally go for taking the property in a legal
Manner and you can of course take legal immunity as well and try to extend this process and through court proceedings you can get more time to settle with the bank as well all these happens only in a secured loan which you’re getting from a banking company whether it’s a bank or an nbfc if it’s one of your private finance technically they give you loans against
Your checks and check is a financial instrument which is used to promise a better that you’re going to pay a certain amount which is written in the check and if you do not honor a check so assume you gave a check and it bounces it is a criminal violation and all these private finances will ask for multiple checks can be anywhere between eight to twelve checks and
If they keep bouncing your checks little you can be arrested so it is definitely not recommended to ever go for private finance you will never ever recommend any layman subscribers or any person who is seeing this video to ever go for a private finance i hope this information is invaluable and useful to you all and if you’re looking for any forms of secured loans
From banks or in bfcs for your needs you can always feel free to reach us in the google form given in the description and the comments below we’ll be more than happy to help you looking forward to connect with you all in the next video thank you you
Transcribed from video
How to get a private finance | What is private finance | layman loans By Layman Loans
