Personal loans are one of the best ways to address a multitude of financial requirements. Being unsecured, the procedure to apply for a personal loan does not entail any collateral and the processing time is quicker. Resultantly, almost 77% of the Indian population rely on personal loans to manage their finances, according to a NIRA survey.
With this significant rise, prospective borrowers must be acquainted with the personal loan application procedure to avoid any hassle.
How to apply for a personal loan online?
Individuals can apply for personal loans online through a few simple steps. Find them below:
Step 1: Visit the preferred lender’s website
Step 2: Find the personal loan section and click on apply now
Step 3: Fill in relevant personal, financial and occupational details
Step 4: Enter the loan amount and repayment tenor in the next step
Step 5: Submit the required documents to the representative, who will contact the applicant once the loan application is submitted.
Upon following the above-mentioned steps, the lender will assess the creditworthiness of that individual and disburse the loan amount within a specified time.
Anticipated borrowers can also proceed with their application via a personal loan app extended by several financial institutions.
How to apply for personal loans offline?
Apart from the online process, individuals can apply for a personal loan offline by following these below-mentioned steps:
Step 1: Visit the nearest branch of the preferred lender and procure the application form for a small personal loan
Step 2: Fill in the application form with the relevant details
Step 3: Provide required documents specific to the lender.
The lender will then conduct a thorough verification of the documents and determine the applicant’s eligibility. Upon analyzing one’s eligibility, the lending institution will disburse the personal loan amount.
To obtain a personal loan, individuals must know how to increase their chances of getting a personal loan. Besides, one should also be aware of the eligibility criteria of this financial product to avoid facing rejection.
Personal loan eligibility
Qualifying to obtain a personal loan becomes comparatively easy if one meets the following eligibility parameters and is well informed about the things to avoid while taking personal loans:
- Age should be between 20 to 60 years
- Must have a CIBIL score of 750+
- Should be salaried with a reputed public or private limited company or an MNC, and self-employed individuals must prove their business vintage.
Meeting or exceeding the eligibility parameters ascertains a high-value loan quantum with a low personal loan interest rate. Moreover, certain financial institutions like Bajaj Finserv extend pre-approved offers to applicants meeting the eligibility. These offers are available to current customers over various financial products like business loans, personal loans, etc. Individuals can check their pre-approved offer in seconds by providing their name and contact details.
Besides meeting the eligibility parameters, one must submit the required documents to expedite this process.
Documents required for a personal loan
Applicants must know the essential documents required while applying for a personal loan online to obtain instant approval on their loan application:
- KYC documents
- Employee ID card for salaried individuals and business documents for self-employed individuals
- Income proof (salary slip and business financial documents)
- Bank account statement
A point to remember here is that eligibility criteria and requirements of documents alter from one lender to another. Hence, if there are any financier-specific requirements, one needs to meet them to qualify for a credit.
Besides these, one can keep in mind a few more pointers to make an informed decision.
Things to consider before taking a personal loan
Consider the below-mentioned pointers before applying for a personal loan:
- Maintain a high credit score
CIBIL score or credit score is one of the primary eligibility parameters that lenders consider before lending. A high credit score of 750 and more implies impressive debt management and results in loan application approval. For instance, an applicant with a credit score of 800 will receive a better interest rate than an individual with a credit score of 300.
- Evaluate repayment capacity
Every year, a considerable proportion of borrowers default in repaying their loan amount. To avoid repayment default, borrowers must estimate their monthly installments in advance. An online personal loan calculator, in this regard, can be helpful.
- Assess accompanying costs
Lenders levy various costs when approving a loan application. They can range from processing fees and prepayment fees to late payment fees. One must consider the different expenses that a lender charges to estimate the overall affordability of the loan.
Individuals wanting to apply for a personal loan must ensure to check the lender-specific eligibility criteria for a hassle-free application procedure. These pointers, along with various others, would help individuals make an informed decision before applying for this financial product.
