Personal loan is described as an unsecured credit provided by financial institution which is totally based on criteria like your employment history, repayment capacity, income level, profession and credit history. It is also called as consumer loan which is basically a multipurpose loan you can use to meet your any kind of requirement. There is no need to pledge ay asset as security to avail a personal loan. You can use it wherever you want you can use it to bear some unexpected medical expense or can do re ovation of your house with the amount.
Common requirements of a Personal Loan
It is basically vary from bank to bank but the general criteria include your age, occupation and income capacity to pay back the loan and place of residence.
1. There should be good credit history and credit score of the loan applicant to apply for a personal loan.
2. Good income source is also the most important factor to consider in applying for a personal loan whether you are a salaried person, businessman or a professional.
Documents to apply for a Personal Loan
PAN Card. Identity proof (Aadhaar Card, Driving licence, Passport, Voter ID, etc.) Signature Proof (Passport, PAN card, etc.) Address proof (Passport copy, Aadhaar card, driving licence, utility bill – gas or electricity bill, Voter ID, ration card, rent agreement, etc.) Latest 3 months Bank Statement (where salary/income is credited). Salary slips for last 3 months.
Eligibility
The eligibility is different for salaried person or businessman as each lender has different eligibility requirements. Before applying first check your eligibility. A person who wants to apply for a personal loan must be between the ages of 21 to 65 years and net minimum monthly income required varies from Rs 15000 to 30000. A minimum one year work experience is needed to avail the loan in his current job and total of at least 2 years experience in all. These are the conditions which can be different at different lenders. Your credit score will also be get checked a High credit score will help you in getting personal loan at lower interest rates.
Repayment of loan
Several banks are offering pre approved loans based on your creditworthiness which will definitely looking lucrative to you. Just don’t accept the offer because it is preapproved and requires minimal documentation First make sure what is your need of personal loan and check its necessity in your life. Check the Emi you will pay after getting the loan will affect your monthly expense. After considering all the factors choose the amount you want to apply for a personal loan.
Interest rate
Personal loans are usually offered at higher rate of interest as compared to other loans. As higher the rate the Emi will increase. Just compare the interest rates offered by different lenders and settle for a lower rate of interest. If you will go for a longer period of duration for loan repayment your Emi will be lower but interest repayment will be higher.
If you fail to repay your personal loans on time it will have a negative effect on your credit score and will lower the future prospects of borrowing so make sure that you avail loan only if you are able to repay it on time
