Financial institutions provide loans for specific needs such as car loan to fund for your requirement of four-wheeler, a home loan for your requirement of a dream home, business loan to cater to your requirements of the business, education loan to fund for the higher education. Then there is a personal loan which is termed as a multipurpose loan, whose usage can’t be limited to only one specific need. Personal loans have gained wide popularity in recent years, and now it can also be availed online, from the comfort of your home or office.
The fund availed from a personal loan can be utilized for business expansion, for consolidating credit card debts, planning a dream wedding, to explore a new domestic or international destination, to meet the emergency medical situation and more. However, as per experts, it wouldn’t be wise to invest the amount availed by personal loan for any investment purpose. A personal loan is an unsecured loan and does not require any collateral to be put up as security. It provides the flexibility to consumers, to repay the loan amount, according to their convenience between 12 months to 60 months.
The digital era has made availability of personal loans online quite simpler and hassle-free for the consumers, eliminating the frequent to and fro to the bank branches. These days every bank and financial institution lending loans have come up with an online application of personal loans on their respective websites. There are aggregator sites as well, to assist you in comparing the interest rates of different Banks and NBFC’s under one umbrella and then decide on the lender to go ahead with.
Once you have finalized the lender, you can simply fill the application form, with all details and upload the scanned copy of the required documents. The lender will evaluate your application of the personal loan and perform a credit inquiry. After the thorough scanning of your credit history is done and all documents are in place, the lender disburses the amount within 3-4 working days.
Before applying for a personal loan, you will have to do a thorough analysis of the few factors. Let us discuss those in detail below:
What is the eligibility criteria for the loan?
Each loan provider has eligibility criteria to apply for a personal loan. The loan seeker will have to fulfill those eligibility criteria to avail of the loan amount.
What are the documents required to apply for personal loan?
The list of the required documents needed to apply for the loan amount is listed on the respective website of lenders. You can go through them in detail and then take the process ahead. Online application of loan requires only the scanned copies of the documents, to be uploaded on the website.
Time taken to get the loan application approved.
Different lenders have different timelines, to approve the loan application of the applicant. If all the required documents will be in place and the credit history of the applicant is good, the lender will not take much time to disburse the amount.
What is the minimum and maximum loan amount?
You will have to find out with the respective lenders how much is the minimum and maximum loan amount that you can avail. Along with the loan amount, you will also have to take into consideration the additional charges such as processing fees, pre-payment, part payment, and foreclosure charges.
Next comes the factors which you will have to take into consideration, on an individual level before applying for the personal loan.
Your CIBIL score– A credit score is your report card on how well you deal with your financial prospects. It is a three-digit number ranging from 300-900, which determines your creditworthiness. The record of credit history of individuals is maintained by the credit information companies approved by RBI. If your credit score is above 800, your application for personal loan can be approved very shortly.
Income Source – Personal loans are unsecured loans, hence it is approved by financial institutions at higher rates of interest. It takes into consideration the job/business stability, which should be more than 2 years. It plays an important role in the sanction of your loan amount.
Debt to Income Ratio – If you wish to seek a personal loan to meet your additional requirement of funds, you will have to review your existing financial situation, of any ongoing loan or any other debt. It becomes difficult to qualify for a loan if a major portion of loan amount is being paid off as debts of the existing loan. You will have to settle your previous dues before applying for a new one.
IndusInd Bank personal loans are available at attractive interest rates of 11% p.a which you can avail to meet your temporary shortage of funds. The eligibility criteria to apply for a personal loan at IndusInd Bank are:
- You should be 21 years of age or above at the time of application.
- Your minimum monthly income should be more than Rs 25,000.
- You should have completed minimum 2 years in employment and 1 year in the current organization.
- You should have completed a minimum 1 year of stay at the current residence if you are in a rented apartment.
All the information regarding interest rates, processing fees, loan disbursal time are available readily on the website for you to compute and take the decision. Today availing personal loans to counter your financial problem, will be the best bet, considering the exorbitant interest rates charged by traditional money lenders. It is a great approach, to tackle your temporary financial woes, without putting a heavy strain on your pocket.
The documentation process for personal loan is simple and the repayment structure is uniform. You will gain quick access to funds in a short span of time, if all the documents are in place and if you qualify for the loan amount. You can choose the tenure for repayment of the debt, according to your repayment capacity which will not put a hole in your pocket. Availing personal loans with just a few clicks can turn out to be a great option to get you out of the debt trap and combat your existing financial situation.