A Personal Loan is a loan that can be utilized by an individual to satisfy any personal need. You can use it to cover your higher Education expenses, Wedding, Travel and Vacation expenses, Medical expenditures, House renovation costs, etc. Moreover, a personal loan can be used to pay-off debts at a lower rate of interest than that of credit cards. Personal loans are also termed as the 'No Questions Asked Loans'. This is because the borrower can take a personal loan for any purpose and use it the way he/she desires.
One needs to ensure that he/she fulfills the required eligibility criteria so as to get a personal loan from the corresponding bank. Enlisted below are the required essentials:
- Minimum age limit is 21 years
- Maximum age limit is 60 years
- Employment preferred is either salaried individuals or self-employed professionals or non-professionals.
- The corresponding individual must be employed/ in business for at least 2 years or at least should have a 1-year duration employment with the current employer or business as such.
- The minimum income should be around 4000- 20000 INR
- The maximum loan amount that can be availed from the corresponding Organization is around 50 lakhs
Listed below are some of the factors that make Personal Loans different from other types of loan:
- Ease Of Availability: Personal loans come without any prior security deposit and are quite easy to avail. They are also offered at reasonable rates of interest and with minimum documentation required.
- Direct Bank Dealing: Availing a personal loan does not require the involvement of any middle agent. This reduces any possible delays or commission in the corresponding process, thus providing complete transparency to the bank dealings.
- Minimum Paperwork Required: As already stated, the personal loan requires very fewer documentation standards. This reduces a whole lot of potential paperwork and there is no requirement of any mortgaging involved in it.
- Universal Loan: the Personal loan is one type of loan which does not require any specific or mandatory statement as the reason for availing it. That is you can use this loan for all types of purposes without being accountable for the kind of work you are using the loan amount for.
- Tenure And Special Availability: The personal loan can range from around 12 lakhs to 50 lacs and the tenure period varies from 12 months to 60 months. You can easily avail this loan without requiring any specific credit card based approval systems.
Know The FICO Score:
This score almost always determines the rate of interest one is eligible for. Get to know your corresponding FICO score and determine the rate of interest at which your personal loan will be made available to you.
Cross-check Your Credit Reports:
Any fault or significant error in the credit reports often leads to a lower FICO score; ultimately increasing the rate of interest for payback of the personal loan. Hence, cross-check it accordingly for any substantial errors, which can lead to a lower FICO score, and subsequently rectify it.
Know The Interest Rates:
Interest rates basically fall into two categories: Fixed and Variable. Get to know which type of interest rate suits your personal loan requirement better and proceed accordingly for best results.
Keep Your Documents Ready:
Though the personal loan does not demand much documentation, there are some financial institutions and banks which require a minimal documentation for credibility factors. Hence, keep all your documents ready in case of any demand of the same from the issuing authority.
Offline Method: All you need to do is to contact the corresponding financial institution or Bank to avail the application document for the personal loan. Fill out the necessary details and submit it to the authorized person for further processing of the same.
Online Method: Fill out the application form online and submit it to the corresponding vendor. Follow the details given for further processing of your application accordingly.
Personal loans are availed by a majority of people for their personal needs, business or higher education spending. Personal loans have created quite a significant impact on the daily lives of people all around the globe. With lower rates of interest, the personal loan has become the go-to thing for those people who need money on an urgent basis. While it would be great if everyone had enough money to fund all of the life’s expenses without worry, it’s a fact that it is not the case every time. Sometimes people do need to borrow a little to keep moving forward, and that’s when a personal loan can be a good solution!!