Personal loans are categorized under unsecured loans which means you do not have to pay any collateral to the bank for availing one. The process of applying for a personal loan is the easiest as all the applicant needs is a set of required documents, a good CIBIL score, a stabilized financial health and a salary account.
WHAT ARE THE POSSIBLE USES OF LENDING A PERSONAL LOAN?
Personal loans can be availed for several reasons listed below-
- Immediate Medical emergencies
- Higher education
- Multiple Debt consolidations
- Travel trips or vacations
- Home renovations
- Any other personal reason or a financial emergency
HOW DOES A PERSONAL LOAN WORK?
The working of personal loan includes-
- Once you submit a personal loan application to a lender with all the required documents, the lender evaluates and approves it.
- The loan amount is then transferred into your bank account.
- You will be required to repay the lender via EMIs for the period of the loan term after you have received the loan amount.
BASIC INFORMATION ABOUT PERSONAL LOAN
|Interest Rate||8.95% Onwards Per Annum|
|Maximum Personal Loan||Up to INR 50 Lakhs|
|Loan Tenure||Up to 5 Years|
|Processing Fee||0% to 3% including GST|
ELIGIBILITY TO AVAIL A PERSONAL LOAN
- The applicant should be aged from 22 to 58 years.
- The monthly income of the individual should be at least INR 15000 per month for a salaried individual and INR 25000 per month for a self-employed individual.
- The applicant should be in the same job for the previous six months.
- The applicant should have at least one year of work experience.
- A good CIBIL score, which is usually above 750, is also very essential to avail of a personal loan.
DOCUMENTS REQUIRED TO AVAIL A PERSONAL LOAN
- Proof of identity- Passport/ Voter i’d / Pan card/ Driving license
- Proof of residence- Aadhar Card
- Income proof and salary slips- last 6 months bank statements
- Employment certificate for one continuous year
PERSONAL LOAN EMI CALCULATOR
The applicant can use the personal loan EMI Calculator to assess the EMI and compare EMIs at different interest rates and loan tenures.
All you need to do is fill out the loan application, which includes the loan amount, interest rate, term, and processing fee, and click on “Calculate” to calculate your EMI (Equated Monthly Installment).
HOW TO INCREASE YOUR OPPORTUNITY TO GET A PERSONAL LOAN?
Your credit score is one of the most significant factors that lenders check before lending a personal loan. A high credit score makes it easier to obtain a personal loan. If you’ve had a poor score, you should review your reports to determine if there are any mistakes. Simple inaccuracies can harm your results, and you must report them to CIBIL if you discover any.
Getting your income and debts in order:
When you apply for a personal loan, lenders will ask for proof of income to determine your debt-to-income ratio. To boost your annual income, consider selling liquid assets like stocks or taking on part-time work. As a result, your debt-to-income ratio will rise, and your chances of getting a loan.
Consider Adding a Co-signer or Guarantor:
If you’re working on getting a personal loan on your own, you can apply for one with the help of a co-signer or guarantor to increase personal loan eligibility . A strong credit score is necessary for the individual you choose as a guarantor. Their major purpose is to ensure that you will pay back the loan. They will, however, be accountable for paying it back if you are unable to do so. Selecting someone with a credit score of over 750 can stand a greater chance of obtaining a personal loan.
Borrow Only What You Need:
Requesting more money than you need to fulfill your financial goals can be risky. Make sure you estimate how much you’ll need and just apply for that amount.