How to take Personal Loan?

In this article, we will give you a guide on how to take personal loan. You need to know the following things before applying for a personal loan: your credit score, your monthly income and your debt-to-income ratio. Once you have these details, you can start the application process.

Take Personal Loan

Personal loan is an unsecured short to medium term loan, which requires no collateral / security for payments. They are normally disbursed with limited to no paperwork within a few hours to a few days. The versatile end-use of personal loans is an significant aspect. This unsecured loan can also be used to meet a number of needs, ranging from medical treatment costs to expected expenditures such as renovation of houses, marriage, etc.

Personal loan benefits

Besides being the most dependable way to raise funds for your immediate needs, the use of a personal loan provides other advantages:

After your request has been accepted, the funds will be credited to your account within 3 seconds.

We owe you the right to choose the term for the loan. You will seek a loan between 12 and 60 months.

Our online services allow you to monitor the status of your application and obtain any support you want 24×7.

Minimum necessary records.

The rate of interest is fixed and remains the same throughout the loan period.

You do not need to have any protection or collateral.

The benefits shall apply to selected customers after online verification and acceptance of the final offer

Different forms of Indian personal loans

Your loan can be used for any reason as long as it is legal. Nevertheless, there are other lenders who supply specific loan products for the reason specified in the loan application by the borrower. Depending on use, these are the different forms of personal loans that can be used in India:

Personal loan for marriage:

As the name suggests, a loan given particularly to cover the expenses of marriage is a marriage loan.

Home Renovation Loan:

A home refurbishment loan would cover the costs of restoring or refurbishing your house.

Holiday loan:

A holiday loan is planned for holidays. You can use a holiday loan and pay the expenses later through easy EMIs.

Pensioners’ Personal Loan:

A loan directly given to pensioners is referred to as a pension loan.

Festival Loan:

Many lenders offer a personal loan for festivals only. When you want a loan to plan a concert, you can apply for a concert loan.

Until applying for one, do not forget to review the eligibility conditions for the various types of personal loans.

Where will your chances of a personal loan be improved?

Credit Clean-up: One of the main variables that borrowers take into consideration is the credit score. It is easier to secure a personal loan with a good credit score. When your score is poor, you need to review your records to see if any errors occur. Simple errors can often have an adverse effect on your scores and you have to report them to CIBIL if you notice any.

Re equalization of your income and debts:

When you apply for your personal loans, lenders request proof of income to determine your debt-to – income ratio. Try selling financial assets such as stocks or receiving more in part-time jobs to increase your annual profits. It raises your debt-to – income ratio and increases the chances of earning a bonus.

Include co-signors

When you find it difficult to obtain a personal loan on your own, you can seek it by adding a co-signer or guarantor. You have to have a strong credit score for the person you pick. Their primary goal is to ensure that you repay the loan. And, if you can not do so, you are still liable to pay the loan yourself. Choosing a person with a credit score of more than 750 increases your chances of getting a personal loan.

Limit your borrowing:

It can be risky to ask for more money than you need to achieve your financial objectives. Make sure you find out how much you need and apply for this particular amount only.

Find the right lender:

Each lender has its own credit scores and income criteria. Select a lender whose eligibility requirements you meet and apply accordingly when looking for personal loans. The problem with applying for several loans is that every one checks your credit score and your credit score falls, albeit marginally, when you have completed your credit report.

Pre-payment and part of personal loan settlement

A personal loan is issued for a defined period of time. This time is known as the term for repayment of loans. After a loan has been taken, you are expected to repay the debt through EMIs by the end of the loan repayment tenure. However, after a loan has been made available, it is called a pre-payment or foreclosure if you decide to pay out your debt before the end of the repayment period.

Pre-payment types:

Two forms of pre-payment are available. These are – full advance payment and partial prepayment or just partial payment.

Half Payment Full Payment:

If you pay the entire outstanding loan sum before the end of the loan repayment tenure, it is referred to as full pre-payment.

Benefits of complete advance payment:

You can prevent heavy interest payments on your loan amount.

When you have the funds to completely pay off the mortgage, you can even get rid of the mortgage.

You will also stop charging prepaid interest if you take the loan from a lender that does not charge any interest on prepaid loan payments.

Total Pre-Payment Disadvantages:

If your lender pays an advance payment penalty for the loan, you will have to pay a substantial sum of money before the loan has been paid.

Test other similar considerations before you lose a loan. Depositing a personal loan means you will pay a large amount of money concurrently. Perhaps this is not always the best option.

 Pre-payment part:

If you pay a portion of the outstanding loan balance before the completion of the loan repayment period, the portion is referred to as pre-payment.

Prepaid member advantages:

You can opt to repay a portion of your unpaid loan if you have money readily available.

Part of the cost of your loan reduces the remaining capital balance, which decreases the successful EMI rate.

The net interest you pay would also dramatically decrease.

Pre-payment portion disadvantages:

If you don’t pay the part early enough, your savings won’t be able to maximize.

If your lender charges a partial payment fee for personal loans, a substantial sum of money may have to be spent on the same.

What to do after a personal loan has been closed?

When you paid for your personal loan (whether redemption or foreclosure) recently, you may have the impression that your loan obligation is over. That’s not the case, though. There are other things you can do after your personal loan has been paid for.

The No-Dues Certificate or NDC

Your lender must issue the No-Dues Certificate or NDC as soon as you pay off your debt. It is one of the most important documents you will receive right after you pay off your loan. It is also a good decision to keep this paper for a long time. This certificate validates your reimbursement. You can’t prove that you paid your debts without this document. When you look forward to a new loan in the immediate future, you will need this document to show that your previous loan has been paid out. This document is generally issued on the spot by your lender if you pay the final amount in hard cash. If you pay by check, NEFT, or any other means, the lender shall emit the NDC, either send it to your registered address or ask you to collect it from the lender’s branch office.

The account statement or SoA

The account statement or SoA, along with the NDC, will allow you to show that your debts have been paid off entirely and paid in due time. It is an optional document often given by certain borrowers. If this document is issued by your lender, you will find it. You can always look for some kind of anomalies in the credit score, however. You can use the SoA to make the required adjustments if you notice anything wrong.

Collection of unused checks:

You can also collect some test leaves which have not been used. The No Dues Certificate set and the unused check leaves normally marks the end of the loan closing process.

Once the loan is closed review your credit score:

This is just a suggestion. After the closing process ends, the credit score is not necessary to review. Nonetheless, you can review the score to make sure there are no variations in the score. If you have any chance of using another loan within 1 to 2 years after the loan is closed, it is highly advisable that you check the credit results immediately after the loan is closed.