Now it is going to be difficult for those taking personal loans to take multiple loans. RBI has implemented a new rule, which is going to bring a big change in both taking and giving loans. According to this rule, now lenders will have to update the loan information in the credit bureau within 15 days instead of 1 month.
This will enable lenders to get accurate information about defaults and payment records quickly. This will help in better assessment of borrower’s risk and curbing those taking multiple loans.
Multiple loans will be banned!
These instructions issued in August 2024 have been implemented from January 1, 2025. The Reserve Bank believes that this will help lenders in risk management. Till now, due to different EMI payment dates, reporting once a month could cause a delay of 40 days in the payment record. But now with updating every 15 days, this delay will end and lenders will get information in real time. Overall, now the delay in EMI reporting will be reduced and the correct information about payment-default will be available quickly.
This rule will also curb the habit of taking multiple loans
New loan takers get more loans from many places which is more than their capacity to repay. Banks themselves had suggested updating the records more frequently, so that correct information of the loan takers can be available.
Now if a person takes multiple loans and his EMI is due on different dates, then his financial activities will be visible in the credit bureau system within 15 days. This will give lenders accurate and fresh data about the financial condition of the borrowers.
‘Evergreening’ will be stopped!
Lenders believe that this change will also stop activities like ‘evergreening’. In this, borrowers take a new loan when they are unable to repay the old loan, due to which their real situation remains hidden. By reducing the reporting time, credit bureaus and lenders will get more reliable data and the lending system will be strengthened. This new rule of RBI will make the lending system more transparent and strong and it will be interesting to see what effect this has on the loan takers.
Benefits of Personal Loan
Availing a personal loan has become a unique facility in today’s busy life. Its main advantage is that it can be availed without any guarantee. The specialty of a personal loan is that it can be used for a variety of needs, such as emergency medical expenses, education, marriage, home repairs or other personal needs.
Personal loans are easy to get. Most banks and financial institutions offer online application facility, which saves time and simplifies the documentation process. Apart from this, the loan amount is also transferred to your account within a few days, which helps in meeting your needs quickly.
Negative aspects of Personal Loan
When there is an urgent need of money, most people rush towards personal loan because it is easily available. The biggest negative point of personal loan is that its interest is very high. The tenure of personal loan is very short, and if the payment is not made on time due to any reason, the bank takes advantage of the helplessness. Taking a personal loan without proper planning can lead to financial crisis. Not only this, if you do not pay the EMI on time, it can also spoil your credit score.
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