Personal loans will act like a true friend in times of an unforeseen situation of financial crunch. Whether you have to pay off for marriage expenses, home renovation or even sponsor travel plans, a personal loan is the best option. These loans are unsecured in nature that means you don’t have to pledge any securities to get them. Hence, personal loans in India come at a higher interest rate compared to home loans.
So it is advisable for the first-time personal loan borrowers to be careful while applying for a loan to receive better offers.
1) Keep a tab on your credit score:
A credit score is an essential parameter that lenders check while issuing personal loans to the applicants. Given that these are unsecured loans, banks will favour the applicants with a higher credit score. A higher credit score indicates the repaying capacity of the applicant. To improve your credit score, make sure you pay your bills on time and use your credit card as less as possible.
2) Pick your lender carefully:
Before applying for personal loans, it is important to conduct thorough research about the lending institutions. It is wise to pick the lender who offers you a lower rate of interest with better terms and conditions. You can shop around for the personal loan by applying online using an online aggregator. Know that interest rates differ widely from lender to lender, so explore your options.
3) Check your repayment capacity:
Banks usually ask for EMI payments during repayment of personal loans. You can calculate your monthly instalments capacity using an online Personal Loan EMI calculator to assess the right amount of EMI for your corresponding loan amount. Banks also conduct the repayment capacity valuation of the borrower at the time of yielding the loan. Hence, if you request for the right loan amount in the first instance, chances of your loan sanction becomes higher.
4) Eligibility:
Most banks require you to be employed for at least two years, and at least one year with the current employer. If you change your job often, the chances of your loan getting approved will be lesser. Also, your loan will not be accepted if you are serving a notice period. Banks also require a minimum income of Rs. 15,000 per month to consider you for a personal loan.
5) Proper documentation:
Lack of appropriate documentation can lead to rejection of your personal loan application. Documents required by banks include:
• Signed application form
• Residence proof (Passport, Driving License, Election ID card)
• Income proof (last 3 months salary slips, Form 16 or IT Returns)
• Identity proof (Aadhaar card, PAN Card, Voter ID, Driving License)
So it is advisable for the first-time personal loan borrowers to be careful while applying for a loan to receive better offers.
1) Keep a tab on your credit score:
A credit score is an essential parameter that lenders check while issuing personal loans to the applicants. Given that these are unsecured loans, banks will favour the applicants with a higher credit score. A higher credit score indicates the repaying capacity of the applicant. To improve your credit score, make sure you pay your bills on time and use your credit card as less as possible.
2) Pick your lender carefully:
Before applying for personal loans, it is important to conduct thorough research about the lending institutions. It is wise to pick the lender who offers you a lower rate of interest with better terms and conditions. You can shop around for the personal loan by applying online using an online aggregator. Know that interest rates differ widely from lender to lender, so explore your options.
3) Check your repayment capacity:
Banks usually ask for EMI payments during repayment of personal loans. You can calculate your monthly instalments capacity using an online Personal Loan EMI calculator to assess the right amount of EMI for your corresponding loan amount. Banks also conduct the repayment capacity valuation of the borrower at the time of yielding the loan. Hence, if you request for the right loan amount in the first instance, chances of your loan sanction becomes higher.
4) Eligibility:
Most banks require you to be employed for at least two years, and at least one year with the current employer. If you change your job often, the chances of your loan getting approved will be lesser. Also, your loan will not be accepted if you are serving a notice period. Banks also require a minimum income of Rs. 15,000 per month to consider you for a personal loan.
5) Proper documentation:
Lack of appropriate documentation can lead to rejection of your personal loan application. Documents required by banks include:
• Signed application form
• Residence proof (Passport, Driving License, Election ID card)
• Income proof (last 3 months salary slips, Form 16 or IT Returns)
• Identity proof (Aadhaar card, PAN Card, Voter ID, Driving License)
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