A personal loan can serve as a companion for those who need instant funds and do not have any assets to pledge. Due to their faster processing, such types of loans have higher demand among salaried individuals. Research says that people predominantly use personal loans for marriage, vacation, business travel, education of kids, and so on. Despite their hassle-free nature, there might be instances where there will be a delay or rejection of personal loan applications. Such situations can be easily avoided if one is completely aware of the loan application process and the prerequisites.
Four easy ways to avail Personal Loan
Understanding your requirement & getting pre-qualified
The essential part of any instant personal loan online application is to have a thorough understanding of your fund requirements. You might not want to overvalue or undervalue the same and get into a hassle. Hence you should gauge the purpose, determine the loan amount, plan your repayment phase, and so on. The next step is to be pre-qualified for the loan approval process. You can use an online personal loan eligibility checker, i.e. online loan calculator to know about the loan amount, monthly EMIs, the tenure, and interest rates. Using such information, you can understand your financial chances for the approval of the instant personal loan application.
Tracking your credit score
As mentioned in the last paragraph, getting pre-qualified for the loan process will make things easier for you. One of the essential criteria of any loan process is knowing your credit score. Banks & NBFCs use the credit score to see the credit history of the borrower. The credit score can be anywhere between 300 – 900. It is usually higher for them who have availed loans & credit cards but have made their payments on time. The financial institutions quickly approve loans for individuals with credit scores of more than 700. Thereby, one must have better credit scores to avail of newer loans.
Approaching lenders
Now that you have completed the steps, you have to browse for various options available in the market. There are a considerable number of lending institutions in the market that can provide personal loans at competitive rates. You need to rank the lenders based on their CRISIL rating, years in business, rates & tenure offered, charges associated with the personal loan, reviews by their customers, and so on. In today’s fast-paced world, you do not need to visit every bank/NBFC and use their online eligibility calculator for every information. Hence you can conclude by having a comparative study between all the lenders. You also need to see your convenience and ease of use while gauging any lending institution.
Documentation
As mentioned in the beginning, the personal loan application process is swifter than other types of loans. However, you need to submit appropriate documents for a hassle-free loan application. The documents required for a personal loan are an application form, proof of identity documents, proof of address documents, salary slips for the last three months (for salaried), bank statements, IT returns or form 16 and proof of income / financial statements (for self-employed)
Conclusion
In the era of digitization & faster credits, it is easier to avail loans, but you should be careful about choosing the lending institution and planning your repayment phase. Selecting the lender is very important as this affects your financial condition by charging more during the repayment phase. You also need a financial partner who understands your requirements and guides you accordingly. Such a gesture will make a better association between you and the lending institution.
