The consumer credit market of India has registered an 8.5% year-on-year growth in December 2020, according to a recent report. Another data published by a market survey company further testifies the contribution of small loans in this growth. This particular financial product is likely to register a 10% growth during FY 2020-25.
The popularity of this particular credit has increased exponentially, owing to its customer-friendly benefits. Nevertheless, before applying for one, borrowers should know more about it and undertake a knowledgeable decision.
What is a small personal loan?
As its name suggests, it is a financial product explicitly curated to meet personal expenses. Since there is no restriction on the usage of funds, borrowers can meet an array of monetary requirements, including the following –
- Debt consolidation
- Managing travelling expenses
- Funding a wedding
- Meeting educational expenses
- Home renovation
These are some common examples, but the list can include any financial requirement that an individual may have. Besides, one can now quickly apply for a personal loan online without any hassle.
How to apply for a small personal loan online?
Here is a step-by-step guide on how to apply for a personal loan –
Step 1: Visit the official website of the lender.
Step 2: Fill the application form with relevant details like personal and financial.
Step 3: Following the approval, submit the necessary documents. Borrowers can upload them online or may submit them physically to a company representative.
Step 4: After final verification and approval, individuals will receive their loan amount within 24 hours.
This is a general online application process for a personal loan. However, it may differ from lender to lender. Along with a convenient online application method, the other benefits of a personal loan play a pivotal role in amplifying its popularity. Following are some prominent ones –
Collateral-free: Since it is an unsecured mode of credit, it does not require submission of any guarantee to get the funds.
Quick disbursal: The leading lenders provide doorstep document collection service and quick document verification that further shortens the loan application process, and borrowers can receive their funds without delay. They can easily borrow money online.
Easy documentation: The list of documents required to avail of this financial product is minimal. Borrowers can easily access it by submitting their KYC details and income proof.
Repayment flexibility: The repayment flexibility further helps borrowers to settle their outstanding dues within time.
Additionally, reputed lenders like Bajaj Finserv offer a 60-month repayment tenor, and borrowers have the freedom to choose their term as per their convenience. One can get a loan of up to Rs.25 lakh at attractive terms.
Further, the availability of pre-approved offers helps streamline the loan application process and saves time. These are available on financial products like personal loans, business loans, credit cards, etc. Borrowers can check their pre-approved offer by submitting their contact details.
Nevertheless, before applying for this credit, it is essential to make a note of the personal loan eligibility criteria. Here are the details –
- Age: 23-55 years
- Credit score: 750+
- Employment type: Both salaried and self-employed
- Monthly income: Depends on the requirements of a lender
Apart from these, a lender may also have other specific requirements. In that case, one needs to meet them alongside the above-mentioned parameter. Along with that, borrowers can make a list of the things to know before taking a personal loan.
Alongside evaluating the eligibility criteria, one needs to consider the following pointers that can affect a personal loan application –
- Focusing on maintaining and improving the credit score.
- Comparing the interest rate of various lenders to find the most competitive ones.
- Assessing the additional charges of a loan to lower the total cost of borrowing.
- Reading the fine print of the loan to learn about it in detail.
Personal loans are a convenient borrowing option for individuals who are seeking quick and substantial financial assistance. The borrower-friendly benefits of this financial product further amplify its popularity.