Applying For Personal Loan Online? Here’s What You Need to Know
The easy availability of personal loans is undoubtedly a benefit. You can use a personal loan to meet all kinds of shortfalls.
Perhaps you need to carry out urgent renovations at home. But you do not have the money for it.
Should you put off the expense and risk of further deterioration to your home?
A personal loan could help you fund renovation costs. Besides, it is simple to get a personal loan – apply online through the lender’s website.
But Before You Apply For a Personal Loan, There Are Things You Need to Know:
- What is a Personal Loan?
A personal loan is often a collateral-free loan that you can use for different purposes.
You can use the funds to renovate your home, pay for medical expenses or higher education, finance a holiday or a car, and so on.
Thus, it differs from a home loan or a car loan, for example, which can only be used to buy a house or a car.
It is relatively easy to approach a lender for a personal loan. Apply online on the websites of non-banking financial companies (NBFCs) like Bajaj Finserv.
The online application often speeds up the loan approval and disbursement process as well.
- How Does One Find the Best Personal Loan Interest Rates?
The interest on a personal loan is a fee that you pay for borrowing money from the lender.
It is calculated annually on the provided loan amount. In general, personal loan interest rates vary from lender to lender.
To find the best rates, you must go through websites of different lenders.
Don’t just limit yourself to traditional lenders like banks. With lenders like Bajaj Finserv, you can get a personal loan at a low rate of interest.
- How Important is One’s Credit Score?
A lender will give you a personal loan only if you can repay it. How do they assess your ability to repay the debt?
They will look at your payslips and bank statements. They will also take into consideration your credit score.
Many lenders check your CIBIL score, which ranges between 300 and 900.
If your score is 750 or higher, they will be more than willing to offer you a loan. But having a low score will reduce your chances of loan approval.
Before you apply for a personal loan, it would make sense to check up on your CIBIL score.
If your score falls below 700, work on improving it before applying for a loan.
Work towards it by clearing your outstanding dues and making credit repayments on time.
- What Are The Personal Loan Eligibility Criteria?
Different lenders have different kinds of eligibility criteria. For instance, lenders will check your current income level as well as your other debt obligations.
Your age, current occupation, and place of work will also affect the extent of the loan being offered to you.
You can read up about the eligibility criteria on the websites of different lenders. Check whether you meet the requirements.
- What Other Things Should One Keep in Mind?
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- Processing Fee: The lender charges this fee when processing your personal loan application. It generally covers administrative charges and resource costs.
- Equated Monthly Installment (EMI): This is the amount you will repay every month throughout the loan duration. Use a personal loan EMI calculator and assess whether the EMI amount is affordable for you.
- Tenor: Personal loans usually have tenors of one to five years. A higher tenor reduces EMI but increases your interest outgo.
Summing Up
Having the necessary information about personal loans in place can help you find the right offer.
If you have a big-ticket expense on cards, a loan may be a better option than credit card debt.
That’s because personal loans charge a lower rate of interest than credit cards.
As you make regular EMI payments, your credit score will slowly improve as well.
Besides, these general-purpose loans can be used for any reason. You may opt for one during an emergency for quick cash or use the money to consolidate debts.
However, do your bit of research before applying for a loan. Apply online to save on time and legwork.
In some cases, you might be eligible for a pre-approved offer. For instance, an NBFC like Bajaj Finserv brings you pre-approved offers on personal loans and more.
This simplifies and speeds up the process of applying for a loan. Just share a few necessary details to check out your pre-approved offer.
Category: Loans
