- July 6, 2020
- Posted by: Ganeshcbani
- Category: Blog
Personal loan is a short- to medium-term unsecured loan that requires no collateral / security to be paid out. They are usually paid out in a few hours or a few days with minimal or no paper work. The flexible end usage of the personal loan is a key feature. This uninsured loan can therefore be used to satisfy a range of needs from emergencies to planned expenses such as housing renovations, wedding, etc.
Eligibility to Apply Personal Loan
|Age||21 – 58 years||21 – 68 years|
|Minimum Income||Rs. 25,000 per month||Rs. 3 lakh per year (gross)|
|Employment stability||Total experience- Minimum 2 years||Minimum 3 years in current business|
|Experience in the current organization- Minimum 1 year|
A personal loan is given to individuals and not companies, as the name suggests. Most banks and NBFCs (Non-Banking Financial Companies) offer personal loans to both employees and independents. The criteria for eligibility for a personal loan vary slightly according to the type of applicant. The following are some of the main eligibility criteria for personal loans that need to be considered.
Personal loan characteristics and benefits
- Borrow, if not more, to Rs.60 lakh.
Choose a loan term of up to 5 years and repay your loan in clear installments.
- Send your application via online or offline channels.
- Minimum documentation and paperwork required.
- There are no limits on how to use the loan number.
- Affordable interest rates on personal loans ranging from 10% p.a. And 24% p.a. And 24%
- Helps in debt restructuring.
- Fast approval.
- Loan offers pre-approved.
Various forms of personal loans
For any reason, you can use your loan as long as it is legal. Many lenders however provide specific loan products for the reason indicated in the loan application by the borrower. Below are the various forms of personal loans that can be used in India on the basis of their use:
Personal wedding loan
As the name suggests, a loan that is particularly given to cover the expense of a wedding is a wedding loan.
Personal home renovation loan
The cost of restoring or renovating your house is borne by a home renovation loan.
Private holiday loan
A holiday loan is planned especially for holidays. You can use a loan for your holiday and pay the costs in easy EMIs at a later date.
Private Pensioner Loan
A loan given directly to pensioners is known as a pension loan.
Personal loan for festivals
Some lenders offer a personal loan only for festivals. You should apply for a festival loan if you want to make a loan for a festival.
How do you improve your chances of a personal loan?
The credit score is a big factor that investors take into account. It is easier to get a personal loan with a good credit score. If your score is poor, you have to review your reports for errors. Often simple errors will adversely affect your scores and you have to report them to CIBIL if you notice any of them .
Reloading your earnings and debts
when applying for personal loans , borrowers request proof of their income to assess the debt-to – income ratio. Try selling financial assets such as stocks or making more in part-time to increase your annual profits. This would increase your debt-to-earnings ratio and raise your chances of getting a loan.
Consider co-signors /guarantor
If you find it difficult to secure your own personal loan, you can apply for it by adding a co-signer or guarantor to it. The guarantor you select will have a decent credit score. Their main purpose is to ensure that you repay the loan. You would however still be liable to repay the loan themselves if you can not. If you pick someone with a loan score of more than 750 you can dramatically increase your chances of getting a personal loan.
Limit your borrowing
You can risk asking for more money than you would need to meet your financial goals. Make sure you determine how much you need and only apply for that number.
Choose the right lender
Every lender has its own credit scores and income requirements. Select a lender whose eligibility criteria you meet and apply accordingly in the hunt for personal loans. The problem is that each of them reviews your credit score and, each time you draw your full credit report, your credit score falls, although slightly.