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9 Reasons to Choose a Personal Loan in India

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Whenever someone needs funds to cover a big-ticket expense, they look towards a personal loan for financial support. However, have you ever wondered what makes personal loans the favourite funding option among borrowers? Let’s look at a few reasons to choose a personal loan in India.

  • Easy to Apply: Compared to other loan types that require several lender visits, personal loans are easy to apply from the comfort of a laptop or smartphone. Most lenders support 100% online loan applications these days.
  • Reasonable Interest Rates: Lenders determine each applicant’s personal loan interest rates reasonably according to their income, DTI ratio, credit score, and other parameters.
  • Simple Eligibility Criterion: Personal loans have easy eligibility criteria, including the applicant’s age, income, DTI ratio, employment, credit score, and other easy-to-fulfill conditions.
  • Minimal Documentation: NBFCs sanction personal loans at minimal documentation requirements. They require identity, income, and residence proofs to verify the applicant’s credentials and approve loans within minutes.
  • Collateral-Free Loans: Personal loans are unsecured loans that applicants may avail of without any guarantor, security, or collateral.
  • Flexible Repayment: Flexible repayment means applicants may select their loan term from a few months to multiple years with EMIs suitable to their monthly budget.
  • Fast Approval: Online loan procedure, no collateral involved, and paperless documentation are a few reasons why lenders can now approve loans within minutes.
  • Quick Disbursal: Once approved, many lenders disburse the loan amount directly into the applicant’s bank account within 24 hours.

These reasons make personal loan offers the most hunted finance options in India.

Must Read: Know How the personal loan EMI calculator can help you to manage your Big expenses

Crucial Factors that Lenders Consider While Evaluating Loan Applications

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NBFCs have made personal loans easily accessible these days with online application procedures. Many have easy eligibility criteria, minimal documentation requirements, and flexible repayment terms to keep things easy for the borrowers. However, they look at several crucial factors while evaluating loan applications, including the following:

  • Age: The applicants should be in their prime earning years at the time of personal loan application, preferably not at the beginning or end of their career.
  • Income: Lenders want to ensure sufficient monthly earnings to support timely EMI repayments.
  • Employment: An applicant who changes job frequently is a high-risk borrower for the lender. So, they prefer borrowers with a steady job, regular income, and enough work experience.
  • Credit Score: A credit score indicates an applicant’s repayment history and past credit behaviour. Most lenders expect a credit rating of at least 700-750. Applicants with a high credit score often get a high loan amount with a lower personal loan interest rate.
  • Financial Obligations: Even if the income is high, the borrowers may miss payments if they have several other expenses to cover each month. Lenders usually prefer applicants with a debt-to-income ratio of less than 30-40%.
  • Savings: Circumstances may change, and the borrowers may find themselves unable to pay the EMIs. Incidents like job loss, death, or divorce may cause a financial crunch, forcing the borrower to default on a loan. Therefore, lenders want to ensure enough savings to support EMI payments during challenging times.

These are a few crucial factors lenders check while evaluating a personal loan application. Look at them carefully and improve your eligibility while keeping these points in mind.

Additional Read: पर्सनल लोन पर जल्दी से मंजूरी पाने के लिए 5 आसान टिप्स!

Should You Apply for a Personal Loan if You are a Salaried Individual?

Personal loans are ideal for any urgent financing. Salaried individuals looking for unsecured loans can quickly avail of these loans with minimal documentation. Getting an instant personal loan is even quicker than asking a friend for help. 

Established NBFCs offer personal loans for salaried individuals easily with flexible terms and quicker loan sanctions. The process of applying for a loan is online and completely paperless. A salaried individual can apply for a personal loan if they meet the eligibility requirements. Let’s check out the eligibility criteria to avail of an instant personal loan.

Personal Loan Eligibility Criteria for Salaried Individuals

  • Minimum salary:
    • 20,000 for applicants residing in non-metro cities 
    • 25,000 for applicants residing in metro cities
  • Age between 21 and 60 years
  • Credit score above 750
  • Should have work experience of at least 1 year
  • Should have worked in the current company for at least 6 months

How can salaried applicants apply for a personal loan?

  • Visit the personal loan finance company website or mobile app.
  • Register using the OTP verification.
  • Fill in the online application form.
  • Upload scanned documents required to apply for a personal loan.
  • Apply.

The lender will contact you to take the loan process forward.

If you plan to take a personal loan, it is imperative to check the maximum loan amount you can get using the personal loan eligibility calculator. This will help you understand if the loan finances suit your requirements. Apart from this, it’s important to carefully calculate your loan EMI using a loan EMI calculator to plan your repayment. Failing to do so can make the personal loan finance company mark you as a risky borrower. Avail of personal loans up to Rs 25 lakhs* at the lowest interest rates.

Additional Read: 10 Questions to Consider When You Get a Personal Loan in Hyderabad

5 Useful Tips to Get Instant Personal Loan Approval

A personal loan is the best source of finance in times of need. Whether it is a medical emergency or you plan for home renovation, higher education, or foreign vacation, an instant loan approval goes a long way to provide you with funds when you need them the most. If you are looking for a personal loan to meet any planned or unplanned expense, these five useful tips will help you get instant personal loan approval.

  1. Compare Lenders

While comparing lenders, look at their personal loan requirements, loan amount, interest rates, repayment terms, processing fees, additional charges, customer service, and other factors. 

  1. Check Your Credit Score

When you apply for a personal loan, lenders look at your credit score to check your creditworthiness. Check your credit score before applying for a loan and ensure it fulfils the lender’s minimum requirement.

  1. Find the Best Interest Rates

Your personal loan interest rates make up most of your loan costs. The higher your credit score is, the lower will be your interest rate. So, compare interest rates and improve your eligibility to get the best interest rates on your loan. 

  1. Select the Right Repayment Tenure

Most personal loans come with flexible repayment terms. Use a personal loan EMI calculator to choose a repayment term with EMIs suitable to your monthly budget.

  1. Make a Repayment Plan

A personal loan helps you meet your expenses and gives you a chance to improve your credit score. Therefore, know your EMIs and make a repayment plan to get the most out of your loan. These are the five useful tips to help you get instant personal loan approval. However, before applying, ensure you fulfil the lender’s personal loan requirements and get the lowest personal loan interest rates.

Must Read: 5 Reasons Why To Choose a Personal Loan Over Another Type of Debt

Everything You Need to Know about Personal Loan Requirements

A personal loan can help you meet any financial expenses, whether a wedding, travel, debt consolidation, or home renovation. This is an unsecured form of credit that is gaining popularity due to its flexible features and ability to offset temporary crises or needs. Fullerton India has made the process simple so that you can get your loan approved within minutes.

Personal Loan Requirements

While planning to avail of a personal loan, the first thing that comes to our mind is the personal loan requirements. Following are the personal loan requirements which you need to keep a digital copy of while applying online for a loan –

  • Photo
  • Identity and age proof
  • Address Proof such as Electricity Bill, or Passport
  • Latest salaries slip as a Proof of Income
  • Bank statements

You will be required to upload these documents to complete your application for a loan.

Personal Loan Eligibility

You need to check some criteria to find out whether you are eligible for a personal loan. They are –

  • You may apply for a personal loan if you are an Indian citizen or resident aged 21 to 65 years. 
  • You are a self-employed or salaried individual earning more than Rs. 20000 per month. 
  • You cannot apply for a personal loan if you do not meet the above criteria.

Fullerton India provides personal loan interest rates that start from 11.99% for self-employed or salaried persons for a minimum tenure of 60 months. Depending upon our policies and based on your requirements, we decide the suitable loan rates applicable. You can then decide your monthly budget accordingly to pay your EMIs easily.

Must Read: Step by Step Guide to Get a Fullerton India Personal Loan

What to do if Your Personal Loan is Rejected

If you have been trying to avail of a personal loan but have been rejected by a financial institution, there are still some things that you can do. There are some steps that you can take in order to reapply for the loan and increase the chances of your loan getting approved.

A personal loan instant approval is difficult because a personal loan is an unsecured loan. There are several criteria that financial institutions use to check how eligible you are for a loan and what your ability to repay the loan is.

  • Why was the loan rejected?

The first step would be to inquire why the loan was rejected by taking the loan rejection letter from the financial institution that you applied to. Usually, this is given in about 30 days. From this, you can find out which factor caused the rejection, like an unsteady income, because you applied for a personal loan without documents, a low credit score, or a problem with the age limit.

  • What is your credit score?

For unsecured loans, credit scores are important criteria. Therefore, you need to work on increasing your credit score before reapplying for the loan for personal loan instant approval.

  • What is your debt to income ratio?

If your loan was rejected due to insufficient income, it might be necessary to look for loans available to people in different income brackets.

  • Did you get your documentation right?

While some places offer personal loans without documents, there may be certain criteria for a particular financial institution that you may have missed out on. Thus, checking your documents and their status before reapplying is integral.

  • What are your other options?

If you are having trouble meeting the criteria for a financial institution or specific lender, you may need to cast a wider net and look at options that may be in your favour.

Thus, the criteria for taking a loan are rather strict, but with a little research and effort, it may be possible to reapply for a loan and be successful in getting it approved.

Must Read: How To Select an Instant Personal Loan

Things you Should Know Before Choosing a Personal Loan

Urgent cash requirements are often unexpected and bring a fair share of problems with them. Therefore, it may be better to rely on a personal loan from a dependable financial institution in such circumstances. 

Personal loans offer several advantages, such as personal loan interest rates, which tend to be relatively lower than other kinds of loans that do not require collateral. However, before you take a personal loan, it may be helpful to keep in mind a few tips that can make the process smoother.

EMI 

While a zero percent EMI scheme seems like a dream, it may have certain caveats. Often the processing charges and other fees amount to more than expected and defeat the purpose of the zero per cent. This is why it is important to be wary of advanced EMI or 0% EMI options.

Choosing a lender

It may be tempting to apply for the first offer that comes to you through mail or SMS, but it would be prudent to choose only trusted financial institutions for your personal loan requirements. It is thus essential to research the various options available, perhaps speak to a few experts and then only make a deal.

Interest rates

The reducing balance method for personal loans interest rates is the most dependable, as flat interest rates bring their share of loopholes. However, make sure you also look at other extra charges you are being made to pay. Thus, even taking a personal loan requires research and awareness to ensure the best outcomes.

Must Read: 6 Situations When Fullerton India Personal Loan Can Be Your Life Saviour

How to Get a Personal Loan with a Low Credit Score?

Personal loans have become one of the most dominating loans in the country. Applicants have several needs, and they opt for personal loans to fulfil those dreams. Despite being a lifeline, getting a personal loan depends on various factors. Factors like a good credit score, employment status, monthly income etc., influence the personal loan interest rates. 

To get a personal loan, it is essential to maintain a healthy credit score as it defines your creditworthiness. However, it is not highly unlikely to get a loan if you have a poor credit score. Below is the table that will help you interpret the probability of getting a personal loan. 

Credit Score Chances of Getting Approved
Above 750Extremely High
700-749
High
650-699
Possible 
600-649
Low
Lower than 600
Extremely Low 

The credit score ranges on a scale of 300-900. A credit score above 750 is highly likely to avail of the benefits of a personal loan with low-interest rates. Even if the chances of getting a loan is low, if the CIBIL score is lower than 600, it is never zero. 

It is possible to get a personal loan with a low credit score. You can use salary slips as evidence that you will be capable of repaying the loan amount you asked for. However, this method of gaining the lender’s faith might cost you high interest rates. Following the tips and checking for lenders with lower interest rates, improving your credit scores will help you score the best personal loan interest rates.

Must Read: 5 Simple Tips to improve your Eligibility to get a Personal Loan

How can one Get an Instant Loan Online?

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Personal loans online have made it a quicker and hassle-free option to get instant loan sanctions for anyone looking for urgent money. These loans do not require any collateral, and hence they are credited almost instantly. Additionally, these loans require less paperwork as the process is digital.

The instant personal loan process your documents quickly and grant you the personal loan within 24 hours. Additionally, the loans availed through the instant loan apps get you the loan up to 25,000 on the go. Many lenders offer low-interest personal loans through their quick loan apps.

How Can One Get an Instant Loan Online?

  • Checking their eligibility through the lender’s website.
  • Calculate your monthly EMI instalments using the EMI calculator
  • By installing a personal loan app and filling out the application form
  • Uploading the necessary documents requested by the lender
  • Photo
  • ID proof
  • Address proof
  • Salary statement 
  • Bank statements
  • Click Submit

Talk to the customer care representative to discuss further information while the application goes through the verification process.

If sanctioned, the amount will be credited to you within 30 minutes of loan approval.

Lenders offers low interest personal loans that start at 11.99%. If eligible, one can avail of a personal loan up to ₹25 lakhs if a salaried employee. Additionally, one can opt for flexible repayment tenures until five years and choose their flexible monthly instalments using the Fullerton India EMI calculator. Install the Fullerton Insta Loan app today to avail exciting benefits.

Must Read: Get a Fullerton India contactless personal loan completely online

How Does a Personal Loan Help Settle Previous Debt?

Personal-Loans

People often have multiple channels of financing, including loans and debt. Handling all of them separately and making monthly payments to different channels can be an inconvenience. Undertaking a personal loan to settle other debts can be a much-needed relief for many. The steps to taking this loan are also exceedingly simple today, as long as you meet the eligibility requirements.

You can express what tenure, monthly EMI, and the loan amount you are looking for during your personal loan application. Clients base these desires on their income, expenditure, and repayment capacity. Accordingly, the lender will let you know whether your request needs tweaking, and the two parties can come to a common ground. 

Potential borrowers can use the EMI calculator to get a reasonable estimate of the loan and interest rates. Such calculators also help them financially plan and be prepared for the various payments they need to make. This further allows them to approximate how long it will take them to settle their debt, helping them decide the appropriate tenure for a better loan experience. 

Lenders offers personal loans at competitive interest rates and a flexible repayment period. Annually, personal loan interest rates are roughly 18%. On the contrary, credit card interests are 24-36%/year. Taking a personal loan makes the repayment of debt much more cost-effective. You can comfortably pay it off between the span of 6-60 months. After crossing the 6-month mark, you can foreclose the loan without prepayment penalties.

Must Read: How to manage a Financial Crisis During Coronavirus (COVID-19)

All You Need To Know About CIBIL Score For A Personal Loan

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A mobile device that displays an excellent credit score rests on top of an credit application document.

CIBIL Score for a personal loan application is important. Before you decide to apply for a loan, make sure that you know everything about CIBIL score.

What does CIBIL Score Indicate?

CIBIL Score indicates your repayment capacity and the risk involved for the lender while giving you loans or credit card facilities. The more loans you have taken and repaid successfully, better your CIBIL Score becomes; similarly if all your repayments are arrears, it tells lenders that this borrower has already taken several loans and not paid them on time- thus poses a higher risk to lenders as well .So, your CIBIL Score dips.

Here is the meaning of your CIBIL score:

  • CIBIL Score 0 – No history (NH) or no credit track record available for the borrower. You can apply for a credit card or take a personal loan to open your file with CIBIL.

  • CIBIL Score -1 – Credit History Not Available (NA) where borrowers track record is less than 6 months. CIBIL records a minimum of 6 months of credit activity to make your credit score.

  • CIBIL Score between 700-900 – This is considered to be a good CIBIL score. It shows a history of healthy management of credit.

  • CIBIL Score below 670 – A score below 670 is considered to be a bad credit score. It is advisable that you improve your credit score before applying for a loan in such a situation.

Note: The above are only indicative and not to be taken as official CIBIL guidelines. Check with your bank regarding their CIBIL eligibility criteria and personal loan eligibility criteria for personal loans before making a decision. 

Additional Read: Things you Should Know About CIBIL Score For a Personal Loan

Things to Check Before Availing a Personal Loan

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Quick personal loans are loans wherein the financial institution allows you to withdraw the requested loan amount immediately. It can have multiple benefits, but you should keep the type of loan and its associated rate of interest in mind before applying for one. You can apply for personal loan here: https://www.fullertonindia.com/personal-loan.aspx

Tenure

Another thing to keep in mind while thinking about taking a quick personal loan is tenure. Loans can have a fixed tenure or a variable tenure. If you have a longer tenure, that means you have to pay less money per month. However, you end up paying a lot more interest in all this way. If you have a shorter tenure, that amounts to higher monthly payments. This is true for the same loan amount.

Floating interest 

Opting for this option means that the interest rate will keep on changing throughout the loan. This change has a direct cause-and-effect relationship with the market and the index. If planning to take a loan wherein the interest rate is already a lot, you should consider floating interest. There are good chances of the interest rate going down in such a situation. 

Fixed interest

As the name suggests, in these kinds of loans, your interest rate remains fixed for the duration of the loan. This helps one to plan their finances better since they know and anticipate the loan price for its duration. 

Consider all the factors at play here before making a decision: your monthly income, your monthly expenses, the interest rates, any assets you own, and others. Using a personal loan interest calculator makes this process easier. 

Additional Read: 2 Scenarios When Instant Personal Loans Better Than Credit Card

Buy your Dream House to Help of Personal Loan

For countless people, buying their own house is a lifetime dream. This may be because of the pride of ownership or watching its value appreciated, amongst other things. Either way, it is a milestone and can be a turning point in the lives of many people.

So, you have a house. What else is there to do now except make it home? If you’re taking a personal loan (https://www.fullertonindia.com/personal-loan.aspx), here are a few ways you can put the money to good use for the same.

Basic kitchen appliances

The move into a new house can be hectic and tiring, but it isn’t possible to sustain yourself on takeout forever. It is, therefore, crucial to buy a good fridge, a stove or an induction system, a mixer, and enough utensils. Not only are these investments, but they will also be there with you as and when your family grows. 

A sitting arrangement 

A basic sofa set and a small center table are a must-have for any house. Such an arrangement in your living room gives you the feeling that yes, the house is indeed yours. It gives you space to simply exist with your loved ones, reveling in that enjoyment of their company. If you cannot afford a brand-new sofa set, there are multiple options to buy it second-hand or at an auction. 

A space to sleep

Having a good, comfortable sleeping space is one thing that can truly make your house feel like a home. Invest in a good-quality, sturdy bed frame, and a comfortable mattress. A good night’s sleep is crucial, and isn’t that also a way to celebrate your new home? 

Some basic furniture 

You’ll need to keep adding furniture to your home over the years, but when you’re starting, there’re a few things you should have. This includes a wardrobe, a dressing table, and even a study/work table. 

You should also make use of a personal loan calculator if doing the above. Buying a house is a financially important part of your life, and using one can help plan your finances better. 

Must Read: Reasons why to opt for Fullerton India Instant Personal Loan

3 Benefits of Personal Loans

Personal loans are a form of quick loan which can be used for any purpose such as paying for weddings, holidays or starting a business. Here are some benefits of applying for a personal loan: 

Rapid disbursal / Quick disbursal of funds

A lot of online vendors disburse loans within 24 hours of receiving a request. This rapid disbursal is ideal if you have an urgent need for funds, or if you’re facing an emergency. 

Must Read: What Are Short Term Personal Loans?

No collateral required 

Since personal loans are mostly unsecured, you do not need to pledge any of your assets. This helps in making personal loans accessible to everyone. 

Fewer documents needed / Hassle-free Documentation 

Applying for a personal loan online is a wholly paperless process – all documentation happens online. Here are the documents you may need, depending upon the financial institution you are applying from: 

  • Loan application: To provide details on the loan, such as the amount required and the purpose of the loan, amongst others.  
  • Identity proof: Any proof of identity that has been provided to you by the government.
  • Proof of address: This might overlap with identity proof, and it includes proof of home or the lease agreement. 
  • Employment proof: If you’re employed, lenders need this to verify your payback abilities.
  • Income tax returns. 

Using a personal loan calculator may be of assistance. It helps you estimate the sum of money you will need to pay in each EMI installation, which will no doubt help in planning your finances better.

What are some Unconventional Ways of Utilising Personal Loan?

A personal loan is easy to apply for and a quick approval financial tool that can be used for any purpose. With no restriction on usage, it can also be used for conventional reasons, which you might not be aware of. 

Conventional ways of utilising a personal loan

  1. Travel Planning: If you want to take a vacation to some exotic location, it may cost you a lot. To bear such expenses, exhausting your savings may be a bad idea, so this is where a personal loan for Travel comes into the picture. 
  2. Wedding: Weddings today are an exotic affair. From photography to a location to catering, everything can be taken care of with a quick personal loan online apply. 
  3. Sorting the Credit Dues: Credit cards are a popular paying option, but without a repayment plan, it may lead to piling debt. The interest charged on these dues is also very high. To ensure that your dues are sorted, a personal loan can help in consolidating your debt. 
  4. Finance Education: Whether it is your higher education or some good schooling for your kid, a personal loan will help take care of education without swallowing your savings. 
  5. Buy a new Gadget: Every day new TVs, laptops is launched, and it is important to stay updated with the latest trend. For this, it is also necessary to have loads of money to buy new gadgets. Well, a personal loan can take care of that too. 

Conclusion

A personal loan can take care of all situations in your life, where you need instant funds. However, you must manage your loan wisely by using the personal loan EMI calculator online. It will help you make the right choice of loan terms during a personal loan online apply.

Must Read: Loan Against securities Or Personal Loan: Which one Is Best?

Here’s How You Can Manage Personal Loan Repayments?

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At times, we have to take a personal loan to fulfil our capital needs. The popularity of personal loans comes from its easy accessibility due to its unsecured nature. You can avail it for a wide variety of financial requirements, and in most cases, there are no restrictions on the utilisation of money sanctioned against a personal loan. 

Today, you can fulfil your dreams quickly by availing a loan, but at the same time, it is essential to ensure that you are financially capable of handling it with your current lifestyle. Here are a few tips that will help you manage personal loan repayments.

  •    Planning a budget:

Before applying, make sure to work out on a budget. Use a personal loan calculator to know the monthly liabilities that you have to repay through EMIs. Make sure you will have enough cash flow to repay on time. 

  •    Plan your expenditure:

Have a clear idea about the expenses you need to cover through the loan amount or the investments you have to make through it before it reaches your bank account. Not having a plan can result in unwanted expenditure.

  •    Opt for prepayments:

Check out the terms of the loan before applying, and if possible, choose the one that allows prepayments. It will enable you to clear the debt before time and save a decent amount of money.

Conclusion:

A personal loan is attractive to people due to reduced paperwork and fast access to credit. However, it can hamper your budget if not managed properly. Make sure to use a personal loan calculator to understand your financial liabilities before applying for a loan.

Additional Read: How Can i pay my dental emergencies bill with personal loan?

5 Benefits of Personal Loans You Might Not Know

Personal loans are still looked at with suspicion as they are not very commonly used. But, they can be super-efficient in managing situations that demand smaller amounts of money without any collateral.

If you are looking for an emergency loan that can fulfill a larger purpose, an instant personal loan could work wonders. If you have a decent income and have a good credit score, you should be able to find a personal loan at a low-interest rate.

Benefits of Personal Loans:

Although it sounds counterproductive, avail personal loans can be a good idea in some situations. Do not pay attention to naysayers, and go ahead and make your life more comfortable with a personal loan. 

  • You can pay off high-interest debts like credit card loans and high-interest loans with a personal loan. Once you restructure your loan, you can pay the loan off in installments. The credit card loan is a revolving one, and the interest can be as high as 48-52% annually. You may feel that you are not able to pay the principal. At this juncture, it is a good idea to convert the amount into a personal loan and pay off the debt. This way, you will have a fixed amount to pay that will involve a part of the principal along with the interest quotient. It will help you actually reduce debt. It may be a good idea to club multiple loans like a medical expense, credit card bills, vacation.
  • Personal loans do not generally involve any collateral so that they could be relatively safer. Any default in payment will lead to a bad credit score but will not attach any property as in a secured loan. It is essential to take a loan that is comfortable to repay, and the EMI are well within your reach. Always aim to take only the amount that you need to keep interested from catapulting. It is not an excellent move to miss personal loan payments as the consequences can be severe, with collection agents haunting you. Your credit score will also nosedive. This will lead to you not getting loans at a reasonable rate any more for a long time.
  • Short term funds to do a course, take a vacation, or pay medical bills can be availed of with a personal loan. You can check out the EMI you need to pay with the help of the personal loan interest calculator. You can make planned expenditures at a low rate of interest than your credit card and save a lot of money in the long term. This way, you have a fixed tenure to pay off the loan in equated monthly installments. The repayment schedule is in control, and you are less likely to default.
  • Many of us forget to live in the present and think of the far off future. This makes the monotony of life very depressing. It is a good idea to avail of an instant personal loan to attain the small pleasures of a well-decorated home, the down payment to the right car, your child’s admission fee to a good school or even a dream vacation while you are still healthy enough to take that trekking holiday. The low-interest rates will be a small price to pay for the gratification you achieve.
  • Probably the essential thing that a personal loan does is build a credit score and history for you. If you have no credit history, it is a good idea for you to take a small personal loan and repay it within time. It takes credit to build a score. This good credit score will open up the possibility of higher loans for business, home loans, or education at a later date. It is an excellent way to add a new credit to your mix and improve your credit score. But, a word of caution, do not apply for a loan from too many lenders and ‘inquiries,’ may have a negative impact on your credit score, and the purpose will be foiled. Choose your lender with care. Your bank will be the best option, or you can look at online lenders who provide quick and low documentation personal loans.

The personal loan can be used for any purpose, unlike a secured loan, a mortgage, or a business loan. You can bank on an instant personal loan to tide you over the temporary financial crises that may occur at some point in your life. The only time you should avoid a loan is when you are not sure that you can repay the loan. Not repaying loans may damage your creditworthiness for years to come. Look for a loan that suits your purpose, is within your means to repay, and builds your credit score. You are on your way to excellent credit history.

Additional Read: Is using personal loan to invest in stock market a good idea?

Get a Personal Loan With Low Credit Score in India

While assessing your personal loan application, the lending institutions consider multiple factors before approving your loan. A credit score is one such important parameter that can either make or break your chances of availing a personal loan. 

According to experts, a credit score of more than 750 is considered optimal to secure a low-interest loan. However, sometimes our score falls due to non-timely payments. Various lenders refuse to give personal loans with such low ratings, and even if they do, high interest is charged.

But, the good news is that some non-banking financial institutions approve loans of people with a credit score of 600-700.

Many NBFC offers various types of loans according to the needs of the customers, such as two-wheeler loans, home loans, working capital loans, personal loans, etc. Personal loans are granted to both salaried and self-employed professionals for up to Rs.20,00,000 and Rs.30,00,000, respectively. Further, the interest rates start at 17% per annum.

Must Read: 5 Smart Tips to Increase your Personal Loan Eligibility

List of Documents Required to Get a Personal Loan in India

Getting a personal loan is easy, thanks to the numerous lending institutions, public and private, that have come forward to provide loans to their intended borrowers. The unsecured nature of the loan has encouraged an increasing number of people to apply for personal loans, be it for any reason, including:

  • making down payments for buying a property or a vehicle  
  • paying for home remodelling, higher education, vacation, an electronic gadget
  • meeting medical expenses 
  • repaying credit card debt 
  • and other expenses

Minimal documentation that borrowers must provide 

Though a personal loan can be used for many purposes, many people inquire about the personal loan eligibility criteria and the documents that must be submitted along with the loan application. Most lenders advocate minimal documentation while applying for personal loans. Though not much is required of intended borrowers, lenders often seek personal loan documents depending on the borrower’s nature of employment. The important documents that customers need to submit while making their loan application include:

  • Proof of identity: Lenders need identity proof documents like a scanned copy of the passport, a copy of your Voter ID Card or your driving license. The numbers on your Aadhaar Card and PAN Card need to be uploaded to enable the lending institutions to verify the identity of their intended borrowers. Customers seeking pre-approved loans can simply use their Aadhaar numbers for the e-KYC process. 
  • Proof of residence: A copy of your passport or Voter ID or Driving License or Aadhaar can serve as residential proof too. You cannot avail a loan without proving the authenticity and validity of your address. However, for those assenting to pre-approved loans, submitting this document may not be necessary as the lenders already have their records before offering this benefit to them. 
  • Office proof address: You may seek a personal loan to enhance your business prospects too. If your company has applied for the personal loan or you wish the amount to be credited to your current account, you must submit documents showing proof of your office address or the registered address of your business enterprise. 
  • Bank Statement (over the past three months): This is important as lenders wish to gauge your loan repayment ability. Your bank statement over the past three months contains details of the amount credited and debited over the period, thus, highlighting the regularity of cash inflow apart from showing the value of the estimated balance you have in your account. Those with a high frequency of cash transactions are more likely to get personal loans as opposed to those whose bank accounts are relatively dormant or if they struggle to maintain even the minimum balance in their savings or current accounts. 
  • Salary Slips (over the past three months): A salary slip is proof of your income and that you are receiving a salary at the end of each month. Getting paid every month is proof that the borrowers have the requisite finances to repay their loans. Instead of their salary slips, borrowers may submit their recent salary certificates with the latest copies of Form 16. 

The best part of applying for a personal loan is that you can apply for any loan amount depending on your requirement. However, credit score can have a determining effect on your loan interest rates, thus, necessitating borrowers to ensure a good credit history. The fact that you can easily repay your loan through equated monthly instalments (EMIs) over a period adds to the affordable nature of the loan.

Read More: Why you Should Apply for an Instant Personal Loan Online?

Remember These Steps When Applying for a Personal Loan!

You can use a personal loan to meet expenses ranging school fees, wedding dress, a holiday or stocks for your business. But, to get the loan approved, quickly and with minimum hassles, here are some of the steps you need to follow:

  1. Make sure you have all the documents – Lending institutes require you to submit all the documents listed on their website or application form. Generally, these are KYC documents along with age, income and address proof. You will also need photograph/s.
  2. It is important to fill the form correctly – There is no compromise on this step. If your application form is incomplete or does not have the correct information, it has a higher chance of rejection. Double-check your form before submitting or uploading online.
  3. Have a good credit score – Many people wrongly assume that a lower credit score is required for a personal loan. That is not true. Some lending institutions will need you to have a credit score of at least 750. Apart from the credit score, there are other personal loan eligibility criteria that you should meet to get the loan sanctioned.

The above are some of the general steps that you should remember when applying for a personal loan.

Must Read: Tips to Get a Personal Loan Without Income Proofs

How to Choose the Best Personal Loan According to Your Needs?

The best personal loan is the one which can fulfil your needs and is also not a burden on your monthly expenses. A personal loan is repayable every month. The amount of EMI depends on the amount of loan, and the tenure one will be selecting. You can check your eligibility for a personal loan by using a personal loan eligibility calculator.

Personal Loan

Availing the benefits of a personal loan can affect your finance for the tenure you are selecting. So, before applying for a personal loan, one must check with different lenders to get the best personal loan possible. Listed below are some factors one should consider before applying for a personal loan.

1. Rate of interest: The rate of interest is the most critical factor that will determine your monthly EMI’s and how much you will have to pay for a loan. So, it is advised to get the best rate possible.

2. Amount of loan and tenure: A personal loan varies from Rs. 10,000 to Rs. 75 lakhs depending upon your credit score and monthly income. You can select the period according to your ease from 12 months to 84 months.

3. Extra fee: Many lenders charge additional fees like processing fees, prepayment charges and many more. It varies from lenders to lenders depending on the scheme you will be choosing.

Conclusion:

To get the best personal loan, it is advised to compare different lenders to get the best deal possible. Review the above factors before applying for any personal loan.

Additional Read: How to Avail of a Personal Loan with Low CIBIL Score?

Debt Consolidation with a Personal Loan Online

Every loan is a liability. The more the loans you avail, the more is the liability on you to repay them. It is imperative that you pay-off these loans as soon as possible.

Debt Consolidation

It is a financial mechanism where you can pay-off all high-interest loans by availing a low-interest loan of long tenure. One of the best choices of credit for debt consolidation is a personal loan.

Personal loan as means for debt consolidation

Are you deliberating whether a personal loan online is the right choice for debt consolidation? Let us see some merits of this loan to validate your choice: 

Benefits of personal loan for debt consolidation

  • Reduction in EMI amount

When you pay a single EMI instead of multiple instalments, the amount of EMI is reduced. The interest rate of a personal loan is lower, especially when you have a good credit score.

  • Easy to manage 

A personal loan is always easy to maintain. You can easily keep track of all the EMIs and dictate your terms with the lenders.

  • Unsecured loan

A personal loan is an unsecured loan. You need not pledge any collateral. It makes the loan availing process hassle-free and straightforward.

  • Building a healthy credit score

When you have multiple loans, you inevitably fail to repay some of them on time. It damages your credit score. A single personal loan makes it easy to repay and build a strong credit score.

A personal loan is an excellent choice for debt consolidation at any time.

Additional Read: Why Applying For A Personal Loan Online Is A Better Choice?

What is Personal Loan & Its Advantages?

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A personal loan is an unsecured loan. It is offered based on important criteria such as income, credit history, employment history, ability to repay etc. A personal loan is termed as an unsecured loan as it isn’t secured against any asset. Hence personal loan interest rates are higher as compared to home or car loans.

Personal loans have become tremendously popular over the years. The entire unsecured loan category which includes personal loans as well as credit card loans, grew by more than 30% in the fourth quarter of 2018.  Usually, people apply personal loan for buying gadgets, travel, medical emergencies etc. Thanks to personal loans one doesn’t need to redeem one’s investments.

Personal loan is popular because:

  • Minimal documentation
  • Simple procedure and Quick approval
  • Regular income is enough to avail the loan
  • It can be applied multiple times depending on previous repayments
  • EMI repayment option
  • The borrower can use it for any purpose
  • It can be availed for the consolidation of debts

Personal loans charge interest rates beginning from 10% onward.

Additional Read: Reasons Why You Should Apply for a Personal Loan Online

Why You Should Get a Personal Loan Online!

The best part of taking a personal loan is that the loan amount can be sought for whatever purpose required. You may consider taking the loan for a marriage ceremony, paying for a vacation, higher studies, home renovation, house reconstruction or making a down payment for a new house. You may even take a personal loan to consolidate your debt by paying all your different loans and bills with just a single loan amount.

The internet allows people to apply for personal loans online though they may also choose to visit the lender’s branch to know more before filling up the loan application form. Being unsecured, personal loans come at high rates. However, that should not deter today’s generation that is looking for instant gratification by making purchases with the loan amount and repaying the amount over a period.

Must Read: 5 Easy Tips to Get Your Personal Loan Approved

Additional Read: Top Factors That Determine Your Mortgage Interest Rate