Since it comes with virtually no restrictions, a Personal Loan lets you finance a range of requirements. And today, with most banks and non-banking financial companies (NBFCs) offering unsecured Personal Loans, you do not need to worry about pledging your assets either.
But there are some things that you must keep in mind before you go about the process of availing a Personal Loan for the first time. Have you chosen your lender carefully? Are you aware of the Personal Loan eligibility criteria? What documents do you need to submit? And what is the best interest rate that you are likely to get?
Knowing the answers to these questions will not only reduce the chances of loan rejection, but also ensure you get good terms on your Personal Loan. Here is the simple checklist that you must follow if you are approaching a lender for a Personal Loan:
1. Start by checking your credit score
Your credit score indicates the financial health of your credit activity over the last 36 months. Banks and NBFCs use this to determine your creditworthiness. A credit score of 750 and above can help you get the best loan deals and low Personal Loan interest rates from top lenders. You can check your credit score on the CIBIL website before you start your loan application journey.
2. Review the eligibility criteria of your preferred lender
While looking for the best lender, it is essential you check the eligibility criteria that is specific to the one you prefer. Lenders tend to take different factors into consideration while evaluating your eligibility. Check the documents required for a Personal Loan to ensure that you have all the relevant paperwork. See what other parameters you need to qualify on such as age, nationality, income and others.
3. Try an eligibility calculator
To calculate your eligibility for a Personal Loan, you will need to consider the location that you reside in. This is because lenders have a minimum salary requirement that differs according to locations. For instance, the minimum salary requirement for a Personal Loan in Mumbai may be higher than that required in Surat, even if it is the same lender. To avoid the confusion and hassle, you can simply choose to calculate your eligibility with a few clicks using a Personal Loan eligibility calculator. Most lenders offer this on their website.
4. Consider your existing loans, if any
Take your existing debt into consideration before you apply for a loan. This includes credit card bills or other types of loans too. This is because lenders check your existing debt status to evaluate your profile and determine whether you will be capable of timely repayment despite your need to pay off other debts at the same time. It may be a good idea to repay any existing debt that you may have before you apply for a new loan.
5. Plan your repayment in advance
Use an EMI calculator to forecast your finances after availing the loan. This can help you plan your repayment in advance and choose the ideal tenor for your financial status. In doing this, you can ensure that the loan repayment is an easy process and that you are availing an amount that you are capable to repay to the lender.
To make your application process even simpler, you can check your pre-approved offers to know the amount you are eligible for and avail money instantly. Lenders like Bajaj Finserv offer Personal Loans of up to Rs.25 lakh at attractive interest rates. The loan amount is disbursed within 24 hours and you can avail the Flexi Loan facility that allows you to borrow as you need, and prepay at no additional cost.
Conduct a thorough research and understand the terms of repayment. Choose a lender that helps you meet your specific needs with a Personal Loan that works for you.