Indian credit landscape has seen a strong propensity of individuals towards availing personal loans. This credit option is considered a one-stop solution to all financial requirements as borrowers can enjoy unmatched flexibility with a personal loan in terms of repayment terms and usage.
Among several other credit options, personal loan is the most effective because it allows borrowers to access considerable loan amounts and fulfil all their financial needs without undergoing any lengthy documentation process over a flexible tenure.
Benefits of Availing a Personal Loan
A personal loan is preferred over other credit options as it bestows borrowers with the following lucrative benefits.
1. Simple eligibility criteria and documentation
Individuals can qualify for a personal loan catering to the following personal loan eligibility criteria.
● Applicants must be an Indian.
● He or she must be between 21 years to 67 years.
● Applicants must have a steady source of income.
● Individuals must have a CIBIL score of 750 or above.
Having a stable income status and healthy CIBIL score reflects borrowers' robust potential capacity, thereby enabling them to get quick loan approval. In addition, maintaining a healthy CIBIL score will helps borrowers in getting substantial loan principal at affordable interest rates.
Individuals can access high-value loan amounts by submitting a few basic documents like proof of identity, address proof, income proof etc.
2. Collateral-free
One of the notable reasons behind the popularity of personal loans is that the credit option is collateral-free. Borrowers do not have to pledge their assets as collateral and undergo a lengthy documentation process, thereby reducing the loan processing time. Furthermore, a personal loan is ideal for those who do not want to risk their assets or do not have any collateral to pledge.
3. Different personal loan type
On observing borrowers' varied financial requirements, lenders now offer several customized offerings. Each loan type is designed to cater to the borrower's end use. It is considered the best credit option as it helps borrowers sail through various financial requirements, be it a medical emergency or while making a big-ticket purchase.
In addition, individuals can avail of personal loans for wedding, education, debt consolidation, business expansion, travel etc.
4. Ease of application
Due to robust digitisation in financial sectors along with the need to keep up with the pace of increased demand for this credit option, lenders have started bestowing borrowers with instant approval and disbursals.
In order to receive faster approval for a loan application, borrowers must be well-versed in the application process. Here are the steps that will guide borrowers to apply for a personal loan online.
Step 1: Visit the official website of the preferred lender. Head to choose a personal loan from the product page.
Step 2: Fill out the application form with the required personal and professional information.
Step 3: Borrowers must enter the desired loan amount and choose suitable loan tenure.
Step 4: Attach documents and submit the application form.
On verification, borrowers will receive the sanctioned loan amount in their mandated account. One can also opt for an offline application process.
5. Flexible repayment tenure
Lenders extend different repayment options for the convenience of borrowers. Borrowers can opt for extended loan terms to avoid the burden of hefty EMI payments. In addition, a long tenure will help borrowers repay loan amounts on time.
In case the sanctioned amount does not suffice borrower's financial requirements, they can conveniently opt for a balance top-up facility.
Factors to Consider While Opting for a Personal Loan
A personal loan can prove rewarding only if borrowers keep a check on the following factors.
1. Compare interest rate
Different lenders extend different offerings. Borrowers must research and compare different options before choosing a lender. It will help them analyse better and opt for an option that extends competitive interest rates. Borrowers must always look for lenders offering nominal interest rates as it will help lower the cost of borrowing to a large extent.
2. Maintain a healthy CIBIL score
Lenders scrutinise the credit score to ascertain the borrower's creditworthiness. The credit history stated on the credit report gives lenders an idea regarding a borrower's past financial behaviour. Hence, borrowers must keep a healthy credit score of 750 and above.
3. Look for additional charges
Additional charges like processing fees, prepayment penalties, cheque bounce charges, late payment fees etc., contribute to the loan expenditure. Therefore, these charges must be included when borrowers plan their repayment, helping them avoid the last-minute monetary burden.
4. Opt for the right loan amount
Borrowers should apply for the loan amount they actually need depending on their financial requirements. It will help them avoid over-borrowing. Borrowers must opt for an amount that they can afford to repay on time. In this context, they can use a personal loan EMI calculator.
Using this calculator, borrowers can try various combinations of the loan amount, tenure and interest rate to arrive at an affordable proposition.
5. Evaluate repayment capability
Before opting for a loan amount, borrowers must plan a feasible repayment schedule based on their monthly income status and other financial liabilities. It will help them dodge defaulting on loan repayment.
In addition, borrowers must avoid falling into fake schemes and offers that claim to charge lower interest rates on sanctioned loan amounts, as it can turn out to be highly expensive in the long run.
A personal loan can be moulded to reconcile with the financial needs of the borrowers; hence has become one of the most sought-after credit options at present. It keeps borrowers free from facing monetary burdens, helping them manage all financial obligations efficiently.
This article is generated and published by FPJ focus team. You can get in touch with them on fpjfocus@fpj.co.in
