A financial emergency can occur at any time, and a personal loan can really help an individual get out of a sticky situation. But when applying for a personal loan, one should ensure that they do not send in their application to multiple banks.
This should be avoided primarily because it can lead to the rejection of the personal loan application.
What is a personal loan?
A personal loan, popularly also referred to as an ‘unsecured loan’ can be opted for in case of an emergency situation. A personal loan is given without any security, thus banks do not ask for collateral when one applies for this type of a loan, instead they sanction the loan amount depending on the credit score and history of the loan applicant.
The rate of the interest in case of a personal loan is generally higher in comparison to other types of loans. This is primarily because it is an unsecured loan.
Why should one avoid multiple personal loan applications?
As a personal loan in India is an unsecured loan, banks generally make a thorough inspection of the CIBIL score of the applicant. If the CIBIl history and score show multiple applications of a personal loan made to different banks, the lender will assume that the loan applicant is credit hungry or has been previously rejected by other banks. This will definitely lower his loan eligibility and his application may be rejected.
Thus, one should first find out detailed information about the personal loans offered by various banks. This would include the rate of interest they offer, loan duration and overhead charges. Once this information is collected, make a fair comparison between the banks and choose one bank that you want to send in the application to.
If that bank rejects the application then you may consider submitting a personal loan application to a different bank.
In case you are applying for a personal loan via the ‘direct sales’ passage of various banks, make sure to inform them to avoid applying to various banks at the same time.
There are times when an individual does not have a great credit score, because of the lack of a credit card or he has not taken any other loan before. Even so, banks consider the application of the individual and sanction personal loan in India. But in this case, if the individual applies for the loan in multiple banks there are high chances that he will be rejected.
Thus, one should be careful when applying for a personal loan. It is important to consider all the factors before sending in the application.
This should be avoided primarily because it can lead to the rejection of the personal loan application.
What is a personal loan?
A personal loan, popularly also referred to as an ‘unsecured loan’ can be opted for in case of an emergency situation. A personal loan is given without any security, thus banks do not ask for collateral when one applies for this type of a loan, instead they sanction the loan amount depending on the credit score and history of the loan applicant.
The rate of the interest in case of a personal loan is generally higher in comparison to other types of loans. This is primarily because it is an unsecured loan.
Why should one avoid multiple personal loan applications?
As a personal loan in India is an unsecured loan, banks generally make a thorough inspection of the CIBIL score of the applicant. If the CIBIl history and score show multiple applications of a personal loan made to different banks, the lender will assume that the loan applicant is credit hungry or has been previously rejected by other banks. This will definitely lower his loan eligibility and his application may be rejected.
Thus, one should first find out detailed information about the personal loans offered by various banks. This would include the rate of interest they offer, loan duration and overhead charges. Once this information is collected, make a fair comparison between the banks and choose one bank that you want to send in the application to.
If that bank rejects the application then you may consider submitting a personal loan application to a different bank.
In case you are applying for a personal loan via the ‘direct sales’ passage of various banks, make sure to inform them to avoid applying to various banks at the same time.
There are times when an individual does not have a great credit score, because of the lack of a credit card or he has not taken any other loan before. Even so, banks consider the application of the individual and sanction personal loan in India. But in this case, if the individual applies for the loan in multiple banks there are high chances that he will be rejected.
Thus, one should be careful when applying for a personal loan. It is important to consider all the factors before sending in the application.
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