With the increasing needs of consumers, personal loans are presently getting increased attention and continuing to manifest growth at an enhanced rate. Many individuals visit lending institutions to avail personal loans and fulfil their personal and financial needs.
Nowadays, several reputed financial institutions enable their customers to apply for personal loans online. This lessens the excess time and effort of borrowers that they would have otherwise used in a conventional loan application. Keep reading to know how to apply for this credit facility without visiting the lending institution physically.
Steps to Apply for a Personal Loan Online
While availing a personal loan, you have to first ensure that you fulfil the eligibility criteria and submit the necessary documents successfully. Since several financial institutions provide online banking facilities, it becomes easy for you to avail a loan online without visiting physically. Mentioned below is a simple step-by-step process by which you can apply for a personal loan online:
Step 1: Visit the official website of your preferred financial institution.
Step 2: Navigate to the loan application section.
Step 3: Fill out your personal loan application form online with your personal and professional information.
Step 4: Select the loan amount you are willing to obtain for accomplishing your requirements.
Step 5: Choose your preferred loan tenure.
Step 6: Upload the necessary documents accordingly.
Upon completion of all these steps, your personal loan application will be submitted successfully. As soon as the lending institution approves your loan request, the amount will be credited to your bank account within 24 hours.
Eligibility Criteria for Personal Loan
Although the eligibility criteria for personal loans vary from lender to lender, there are some common criteria that you should fulfil:
- The applicant should be an Indian citizen.
- The borrower can be salaried and associated with a public, private, and MNC or can be self-employed.
- A borrower should have at least 2 to 3 years of working experience.
- Age of the applicant should be between 21 years and 67 years.
- Applicant needs to have a net monthly income of Rs. 15,000 at least.
- The borrower should maintain a healthy credit score of 750 or above.
After fulfilling the eligibility criteria successfully, you need to gather the necessary documents and upload them on the lender’s website.
Documents Required While Applying for a Personal Loan
The documents required at the time of applying for a personal loan are discussed below:
- Identity Proof (comprise PAN card, Aadhaar card, driving licence, passport)
- Address Proof (include Aadhaar card, voter ID card, and electricity bill)
- Income Proof (Bank account statement and salary slips of last 3 months)
However, before you apply for a personal loan online, there are important factors which you need to consider.
Things to Consider While Applying for a Personal Loan
Besides tackling financial crises, personal loans are a preferred source of funding for young borrowers. Its prompt and quick accessibility alongside no end-use restriction has made it a perfect borrowing option for young individuals.
However, many borrowers do not properly adhere to the key aspects which can make their credit reasonable. Thus, apart from knowing the ways to apply for a personal loan, you need to understand the factors that ensure a smooth borrowing experience:
- Evaluate Your Necessities And Choose Loan Amount Sensibly
While planning to avail a personal loan, you should assess your actual needs and make a list of them accordingly. After this, you can decide their loan amount depending on your requirements. Often, borrowers over-borrow the loan amount owing to their no end-use restriction feature. Consequently, this causes a severe financial burden on the borrower.
Furthermore, when it comes to personal loans, you should not ignore the idea of evaluating the amount of money you need to pay throughout the repayment tenure. This is why, by determining your repayment potential as well as overall expenses, you can opt for a personal loan which may fulfil your dreams and requirements without stressing your finances.
- Verify Credit Score
Secondly, the CIBIL or credit score signifies the repayment capacity, creditworthiness, as well as overall financial status of a borrower. Generally, a credit score ranges between 300 and 900, where if your score is higher, the chances of getting your loan approved increases. In addition, having a healthy credit score gives you the scope to negotiate with your lender to get attractive interest rates.
Furthermore, while you apply for a personal loan, the CIBIL score is vital for personal lending since the sanctioned amount depends on it. This is why you should focus on retaining a healthy credit score to ensure fast credit approval at reasonable terms and rates.
- Compare Rates of Interest
While applying for a personal loan, one of the main factors you need to consider is the rates of interest. Interested borrowers need to conduct detailed research and compare the prevailing lending rates offered by various financial institutions. This is among the most crucial components that play a vital role in deciding the Equated Monthly Instalment (EMI) of the loan amount.
Hence, in order to get reasonable EMIs, you should compare the interest rates in the market and select the one that suits you the best and match your repayment capacities. If necessary, you can use the personal loan EMI calculator from the website of your lending institution to get better and prompt results.
Besides asking for competitive rates of interest, you should be aware of the factors stated below, which influence the interest rates on personal loans and the borrowing process:
- Age
- Income
- Employer’s Status
- Credit Score
- Debt-to-Income Ratio
- Repayment History
- Relationship with Lender
- Check Repayment Options
It is sensible to clear out the present financial liabilities before availing another loan. This comprises EMIs and monthly expenses. Precisely, with flexible repayment tenure, you can manage your finances effortlessly. Generally, most reputed financial institutions provide flexible repayment tenure of up to 6 years. In addition, you will benefit from quick and minimal documentation to get fast loan disbursal.
- Consider Additional Charges
While availing an unsecured personal loan, you should check the hidden charges attached to it. This includes processing charges, penalties, prepayment charges, foreclosure fees, and so on. This aspect entirely depends on your lending institution. Since such charges may escalate the borrowing cost considerably, you need to acquire a disclosure in advance in order to escape from the additional burdens while availing this credit facility.
Having a clear idea about the above subject may help you apply for personal loans online and considerably speed up the loan application procedure. This facilitates the reduction of the problems present in traditional borrowing processes. Here, you do not have to bear the hassle of visiting the financial institution’s branch office to apply for the loan. However, while availing this credit facility remember that its terms and conditions vary from one lender to another. So go through them thoroughly and make prudent decisions.