An Ultimate Guide to select a Personal Loan5 min read
A Personal Loan is a convenient financial resource you can turn into when a financial need arises. It also provides certain perks to enjoy while availing as it is unsecured and doesn’t need any collateral to pitch for you. It is easy to qualify loan with certain lenders sanctioning the same within 24hrs. It is almost an emergency financial resource.
Though the common grounds to avail personal loans are Medical Emergencies, personal events, for credit card bills and many short term expenditure, it doesn’t have any constraints on spend and is completely upto you on how you utilize the fund. Even though it is unsecured, there is a need to fulfill certain check points of documentation you need to provide and certain lenders also help their customers Apply online.
- Age must be between 21 and 65 years.
- Applicant must be either salaried or self employed.
- Atleast an year of work experience.
- For salaried employees, minimum salary of 15k/month.
- Basic KYC Documents – PAN Card, Aadhar Card/Voter ID etc.
- Income Documents – Last 3 months Salary Slip, ITR for last 3 years, Recent Bank Statement.
A background check to avail the right Personal Loan
1. Compare Interest Rates
Since, Personal Loan is an Unsecured loan, the interest rates are pretty high compared to other secured loan products ranging from 12% to 18% per annum. It is an important factor to consider while availing the same to avoid high interest repayments.
2. Note the Loan Tenure
Loan Tenure is the repayment period of the loan and varies from bank to bank and you always hold the right to select the duration you require to take a Personal Loan. More the tenure, more the interest and always prefer to match the tenure period to match your income and repayment capacity.
3. Check Loan Amount
Total Loan amount you are eligible to be sanctioned varies bank to bank depending upon the bank or lender’s internal policies. Have a check on the amount of loan you get before you take one by visiting Lenders website.
4. Note additional expenses you incur
Banks levy certain charges and penalties to sanctioning loans and in case of EMI late payments in the form of Processing Charges and Late payment penalties. Verify the charges before proceeding to Apply Online.
5. Check your EMI
Before availing a loan, check the EMI amount you need to pay every month using EMI Calculator and have a fair idea of the repayment amount you need to make and do not burden yourself with more amount than you can pay back.
6. Important – Read the Terms and conditions
There are consequences in case you default on EMIs such as effect on your Credit Score and continuous due calls from the lender as it may affect your mental ability to concentrate on your work. In case, you are unable to pay EMI for a certain month, there is an option to talk it out with the lender who will help you get through the time. This is where you loan terms matter the most and study them before taking a Personal Loan.
Personal loans have the ability to get you out the mess and also the push to a mess incase you don’t make on-time payments and it the decision left to you to understand the commitment you are getting into before entering into one.