No matter how strong your finances are, sometimes you might just need a little bit of financial assistance to tide over your emergency fund requirements. A personal loan can come in very handy during such kinds of situations.
One of the major advantages of a personal loan is that you don’t have to pledge any asset as collateral. Another benefit is that there are absolutely no restrictions on the usage of the funds, meaning that you can use the loan as you please.
Nowadays, both public sector banks and private banks offer personal loans at attractive terms and conditions.
That said, if you’re planning on availing a personal loan shortly, here are 5 simple suggestions that you can incorporate to effectively complete the loan process.
1. Increase Your Credit Score
All financial institutions, whether it is a bank or an NBFC, take your credit score into account when analysing your eligibility for a personal loan. This is precisely why it is important to make sure that you possess a high credit score. Generally, a credit score of over 700 puts you in a favourable position to get a loan. That’s not all. If you have a high credit score, you might even be eligible for low personal loan interest rates as well.
If you’re unsure of what your credit score is, you can do a quick credit check online for free. And if you find that your score is somewhat less than ideal, consider taking remedial measures to increase it before applying for a personal loan. Doing so can lead to a smooth and hassle-free personal loan process.
2. Ensure That You Satisfy the Eligibility Criteria
Every financial institution has certain eligibility criteria that you, as the borrower, would have to satisfy to apply for a credit facility. And depending on the lender with whom you apply, these criteria may vary. Some institutions may have stringent requirements, whereas others might be more relaxed. IDFC personal loans are a great example of credit facilities with relaxed eligibility requirements.
So, before you go ahead with your loan application, always remember to check your personal loan eligibility set by the lender. Apply for the loan only if you satisfy the requirements. This will make sure that the process goes on smoothly and in a hassle-free manner. On the other hand, if you don’t satisfy the criteria, it might be best to refrain from applying since your application might get rejected.
3. Make Sure You’re Capable of Repaying the Loan
Your repayment capacity is also a major factor that financial institutions consider when verifying your loan application. Possessing a high repayment capacity can tip the scales in your favour and can increase the chances of your loan application being approved.
Consider reducing your debt-to-income ratio by paying off some of your existing debt obligations. Doing so should free up your income, which you can use to show that you have adequate capacity to repay the loan.
Also, it might be a good idea to disclose all your other sources of income in addition to your salary. For instance, if you have any fixed deposits or other investments with monthly payouts, disclosing them along with your salary income should help prove your repayment capacity to the lender.
4. Check Out Different Lenders
As you know by now, there’s absolutely no dearth of financial institutions offering personal loans in India. However, not all of them issue loans with the same terms and conditions. For instance, some lenders might quote low personal loan interest rates, whereas others might quote a higher rate. Similarly, the processing time and other features of the loan may also vary for different lenders.
If you’re keen on ensuring that the personal loan application process is completed effectively and efficiently, choosing the right lender is key. And the best way to do that would be to do a detailed comparison of the personal loans offered by various lenders. This can help give you some much-needed clarity on which lender you should choose to proceed with.
5. Keep All the Documents Ready
With the personal loan process going completely online, borrowers are finding it very easy to apply for the facility. However, that doesn’t mean that there are no chances of your application getting rejected. For instance, your loan could get roadblocked if you don’t provide all of the necessary documentation needed to process your application.
That said, there’s a simple way to ensure that you smoothly and effectively complete the application process. All that you need to do is check the list of documents needed to apply for a personal loan and get them ready and on hand before starting the application process. This way, you can not only complete the process without any delays but also make sure that you upload all of the documents.
Conclusion
The next time you apply for such a credit facility, keep these 5 tips in mind. Diligently following them can go a long way in helping you complete the personal loan application process effectively and efficiently. If you require funds urgently to satisfy your emergency requirements, a personal loan might just be what you need. Thanks to a completely digital application process, you can quickly apply for the credit facility in no time. In addition to this, you get to enjoy the benefit of highly attractive personal loan interest rates as well.
