Are you a salaried individual in need of money? Do you want to renovate your home, but the money constraint made you abandon it? Does an unexpected medical bill force you to neutralize all your savings? All of us have faced such dilemmas in our lives when the options before us are limited. But not any longer.
Personal loan from financial institutions are becoming popular among people who are in need of instant cash.
What is the significance of personal loans?
A personal loan is a money borrowed by an individual for any personal requirement. It can be for a variety of purposes like buying a gadget, new car, education, medical bills, etc. All financial institutions offer personal loans to customers depending upon the applicant’s need and eligibility criteria. Some of the features of personal loans are:
- A personal loan amount can be utilized for any reason from debt consolidation travel expenses.
- Mostly the personal loans are unsecured in nature without putting any security.
- The repayment tenure is between twelve months to sixty months.
- The interest rates charged vary among the lenders and depend upon factors like the borrower’s creditworthiness, age, and income stability.
A personal loan can be availed by both the self-employed personal as well as the employed individuals provided they meet the eligibility criteria. Personal loans are unsecured, making them popular among the young working class that does not have a credit history or security asset.
What is an instant personal loan app?
Apart from Banks and NBFCs, an applicant today have another option available to secure personal loans. These are online personal loan apps or digital companies that offer personal loans through an online platform. An applicant can download a personal loan app on his mobile from the Google play store for free.
What is the benefit of availing of loans from personal loan apps?
The personal loan apps offer significant benefits over banks and NBFCs to customers, that includes:
- Loans offered are for multiple purposes.
- There is no need to place any asset as security to get the loan.
- The borrower can select repayment tenure as per his/her convenience.
- The interest rates are highly competitive.
- Easy repayment policy for the customers
- Doorstep documents collection facility available for customers
- Digital documentation ensures paperless work.
- The instant personal; loan apps have relaxed regulations in comparison.
- The loan verification and disbursal process are fast, and the customers are regularly updated.
- Line of credit offered to customers ensure the customer pays interest only on the loan amount withdrawn and not the entire amount.
How to get a personal loan at the lowest interest rates?
Since personal loans are unsecured most people believe, interest rates charged are on the higher side. However, if you follow specific tips, you can negotiate a better deal in getting a personal loan.
- Compare interest rates among lenders
Before applying for a personal loan from any specific company, an applicant must do research and find the company offering the lowest charges on the loan amount, including interest rates, processing fees, etc. This way, an applicant can select the best offer available.
- Good credit score
One thing that determines the interest rate to be charged on the loan amount is the borrower’s credit score. A credit score indicates the creditworthiness of an applicant. It is a numerical value that ranges from 300 to 900. Usually, a credit score of 750 and more is considered acceptable, while 800 or above can help an applicant to get a rebate of .5% to 1% on the interest rate. Hence it is advisable for an applicant to maintain a good credit score by not defaulting on the previous loan installments.
- Stable job and income
An applicant with a stable job in a good company is a preferable candidate for a lender. A regular job indicates good income and less likelihood of default by the borrower on loan sanctioned. An individual with a good job and stable income can negotiate a better deal with a lender.
To get a personal loan minimum income for a salaried individual Rs. 12000, while it is Rs.15000 for a self-employed person.
What is the procedure to apply for a personal loan?
An applicant must follow the three simple steps to apply for a personal loan:
- Step 1 – Properly fill the loan eligibility form that requires the following details about the applicant:
- Full name of the applicant(as per PAN)
- The E-mail address and mobile number of the applicant(verified)
- Current residence address (Aadhar card, ration card, utility bills, passport)
- Proof of employment or self-employment
- Company’s name were employed or business information
- Monthly income(bank statement of last six months)
- Step 2 – Select the loan amount and tenure.
Once the eligibility form is filled, an applicant should select the loan amount, calculate and fix the instalment, and the repayment tenure for repayment. Now KYC details are to be given. Upload all the necessary documents and bank details for verification. You should also fill the NACH form, which leads to the auto-deduction of EMIs.
- Step 3 – Once all the documents along with the loan form are filled and submitted, the records are verified, and the loan is approved for eligible candidates within three or four working days, and the money is transferred to the applicant’s account.
Gone are the days when people line up before banks to get loans. The new-age customers are restless and need the money instantly to lead their life. The personal loans made available through instant personal loan apps are a blessing in times of need for the young generation. The best thing about the digital platforms offering personal loans is that the entire loan procedure is less cumbersome and customer friendly.
A customer can simply load the instant personal loan app on his/her mobile and start the loan process by selecting the best loan option. These digital platforms follow a liberal approach in sanctioning the loans, making them popular among young professionals.