Have you dreamt of going on a world tour, or getting a destination wedding, but every time you think about these desires, you are brought back to the harsh reality, a place where your finances are unstable like a boat in the wild ocean. Personal loans act like a magic mantra that can work at your disposal fulfilling all your fantasies and dreams.
A personal loan is usually a kind of unsecured loan, which is required by most applicants to fulfill their current financial needs like financing needs like education, a vacation, medical emergencies or a wedding etc. These loans are also known as an unsecured loan, which is sanctioned based on the applicant’s credit history and his/her ability to repay the borrowings with his personal income. These loans are highly advantageous with its easy installment payback period and lower interest rates, compared to credit cards that you might die returning.
How to Secure a Personal Loan?
- The necessity of Collateral?
Some Indian banks offer personal loans as both secured and unsecured loans. The applicant is required to put a mandatory security or collateral like property or any asset against the loan as a security. Naturally, it promotes lender security, where the borrower is also able to enjoy lower interest rate. However, most personal loans are sanctioned for a short span of time and a taken through unsecured modules. I recommend candidates to check with their financer whether or not they provide secured personal loans, as it comes with multiple advantages, which reduce your burden.
- Place where you can apply for Personal Loan
Banks and Credit Unions are the common and secure ways of applying for a personal loan. In case you are confused about selecting the best scheme or the best bank and just don’t have enough experience with the financial world, you search through Google, or contact all the popular banks in your regions and discuss your needs with them. Personal Loan requires the applicant to submit minimal documents which take less 2 weeks to sanction depending on the lending amount. You can take up to INR 50,000 to 15, 00,000 worth loan, whose repayment period ranges between 12 – 60 months.
- Select the right EMI
EMI (Equated Monthly Installment) is basically the monthly installment that is paid by the applicant to the bank for the certain time till the full repayment of the loan, which includes both interest rate and principal amount. Note that higher EMI have shorter repayment period and lower interest rate, because of its short duration, but higher EMI’s can also put a burden on the applicant. So before signing your loan document make sure to select an EMI rate, that doesn’t mess with financial stability as well as doesn’t induce a higher interest rate out of you. You can select the perfect EMI according to your personal income using a Personal Loan EMI Calculator online.
- Maintain a Solid Credit Score
Credit Score is a formula used by banks, to check the repayment capacity of potential loan applicants while sanctioning a loan. A good credit score range between 300 – 850 points. A Higher credit score represents higher repayment capacity. You can check credit score using multiple apps online. A good credit score can significantly help you in getting any type of loan faster without any complications. Almost every bank in the country uses this method to check applicant creditability and financial liabilities, so make sure to maintain a decent credit score, if you want to shine in the eyes of your financer.
- Loan Benefits
Multiple financial institutes in the country like Axis Bank etc are known for luring potential loan applicants by offering them additional facilities on their loan. Axis Bank also has EMI calculating feature, where they sit with their borrower and help them choose the best EMI structure for them based on their personal income, to increase their repayment potential until the end of the loan tenure. Some banks also offer flexible repayment facilities, in which they extend the EMI tenure or allow borrowers to make an advance payment of the whole amount. These flexible options tend to make these loans one of the most secure options, where banks act as an understanding Institute to the needs of their customers.