You work hard every day, but a major part of your monthly salary may go towards paying debts, bills, grocery, investments etc. At the end of the day, you may have some amount to spend on yourself or put in savings. Thus, you lead a comfortable life, however, when a financial crisis arrives, you do not know how to arrange the additional funds. The crisis can be anything, such a medical emergency, breakdown of car, important gadgets such as smartphone, computer etc shutting down.
It can be a planned event that could demand a huge amount of money as well, such as wedding, travel trip, home renovation, and others. In such situations, rather than liquidating assets, investments or savings, you can opt for a personal loan instead.
How to Get a Personal Loan in India?
It is pretty simple to apply for personal loans online. You can fill out the application form on the site, upload all the essential documents, and get approval within no time. No need to even make branch visits. There would be a list of top loan providers to compare and apply with, on the application website.
- You can get this loan from any leading bank or non-banking financial company.
- As a borrower, you can attain an amount between Rs. 1 lakhs and Rs.20 lakhs.
- Mostly people take the funds for marriage, medical emergency, travel, education, home repair, etc.
- The repayment tenure is between 1 year and 5 years.
- You will have to pay monthly EMI towards the loan.
How Do Personal Loans Help to Fight Financial Troubles?
When faced with cash-crunch, you may feel trapped and unable to arrange funds in time to resolve the outstanding issue. A personal loan can help you look eye-to-eye at economical tragedies. It is a form of unsecured loan, which means you do not have to provide collateral to the lending institute.
- This line of credit is primarily available for salaried individuals, though special schemes are available for professionals such as doctors, CAs, government officials etc.
- The applicant’s employment history, repayment capacity, income, credit score, age, etc will be considered to judge the eligibility for the loan.
- Compared to secured loans, personal loans do not necessitate you to submit security to the lending institution. The interest rates though a little more than secured loans, are very cheap when compared to credit card loan interest rates.
- Also, there is no specific end-purpose of the loan, thus be it any financial crisis, the funds can come to your rescue at the right time.
- Some lenders provide instant approval within a day. It takes as less as just 48 hours for the loan to get disbursed to your registered bank account.
Which Factors the Banks Will Consider Before Providing the Loan?
When looking at whether to provide a personal or not, banks do consider a few things, especially your credit score and debt to income ratio.
- In case you have a CIBIL score of less than 750, then it may be difficult to get approval for the funds. The financial institutions may find you then unreliable to manage debt and finances, and doubt your repayment ability.
- You must draw a monthly salary of at least Rs. 25 thousand. The amount should reflect in your bank account. Cash salary will not be counted.
- The lenders would also check your existing liabilities. If you have too many ongoing debts, it is possible that the application could get rejected. Try to maintain a healthy financial record and resolve outstanding debts as many as possible, to get the loan.
What are the Documents Required for a Personal Loan?
The banks and NBFCs can ask for a number of documents to check your personal loan eligibility. Here is a list of some of the documents needed for personal loans in India.
- Identity Proof (any of the following): , Aadhar Card, Passport, Voter ID Card, Employer issued ID Card, PAN Card, Life Insurance Premium Receipt, Electricity Bill, Ration Card, Driver’s License, Title deed/utility bill/ Mobile/Telephone Bill, municipal tax receipt etc.
- Age proof (any of the following): PAN Card, Passport, Voter ID, Birth Certificate, Ration Card, Aadhar Card, Secondary school certificate (Class 10), Life Insurance Premium Receipt
- Residence proof: Telephone Bills, Ownership and Title Deeds of Property, Electricity Bill, Ration Card, Government-issued Employee Residence Proof.
- Form 16 or proof of Income Tax Returns
- Audited balance sheet and profit and loss account of the last three years, which is certified by a Chartered Accountant
- Signed application form with passport sized photographs
- Photo ID
- Salary slips of last three months
- Bank statement of last six months
- Income tax returns and computation of income of last three years
By adhering to the facts about a personal loan, you can apply for one when in need of funds. As it is easy to understand now, a personal loan is the ideal solution for any financial problem, thus do not hesitate to consider this option, when necessary.
