Everyone wants to enjoy life. A person dreams of having a grand wedding, going on foreign trips, renovating their house into a grand one and more. But everything comes with a price tag. This only proves to be a hurdle on the path of your dreams. These days personal loans have become an easy option for fulfilling one’s dreams. It does not require collateral, and hence, it is an unsecured loan. The entire personal loan process has been made very easy and convenient. This can also be applied online. To see the process of how to apply for a loan, read further.
Simple steps for a personal loan
1. Eligibility criteria to be fulfilled
- To apply for a loan, 21 years is the minimum age. At the time of the closure of the loan, one must be, at most, 65 years.
- Indian citizenship and residency are needed.
- Required documents are to be kept ready. You must make sure that the documents are relevant and genuine.
- The application form must be rightly filled out and signed.
2. Calculate the EMI
EMI must be calculated. To select the best personal loan bank, you must calculate your EMI. It depends on the tenure, interest rate and the original loan amount. These days you can easily find online EMI calculators.
3. Required documents must be checked and kept ready
- A passport-size photo is required. You need to make sure that the image is recent.
- Application forms must be correctly filled out for a smooth personal loan process.
- Age proof needs to be provided. It can be a PAN card, passport, or certificate from a statutory authority.
- Identity proof is needed. It can be a voter card, driver’s license, PAN card, or passport.
- Address proof is required. You can choose from documents like an electric bill, telephone bill, passport, ration card, driver’s license, passbook, bank statement, or rental agreement.
- The past 3 months’ salary slips are needed. One can also provide the last 6 month’s bank passbook or statement.
- Form 16 is needed.
- Income tax returns are required.
- A check for the processing fee is also needed.
4. Filling out the application form
There is an application form that needs to be filled in. It requires financial details, employment details, personal details like age, address, etc., place of work if a person is salaried, or company details if a person is self-employed. These forms are available offline as well as online.
The process of filling up the form online is as follows:
- You need to choose the best personal loan bank for yourself. Then, visit the online application page.
- You must select a suitable option: salaried or self-employed.
- You will be directed to an application form.
- The phone number needs to be entered rightly.
- An OTP of 6 digits will be sent on the phone that needs to be entered.
- You need to fill in the personal details and then enter the next page.
- Employment details are needed to be filled in as instructed.
- The next step will ask for bank details.
- Few scanned documents are required in this process; in the next step, those documents are to be carefully uploaded.
5. Tenure and loan amounts are to be selected
It is vital to enter the desired amount while filling up the application form. Institutions offer loans based on certain factors. They check financial information, personal details and documents provided, and any outstanding debts. Then, they offer tenure for repayment and interest rate for a personal loan. The interest rate can vary, depending on what purpose you are taking the loan for. Researching and selecting the best personal loan bank is wise to ensure good service.
6. Submission of documents and approval of the application form
- The type of document that is needed can vary between different financial institutions.
- The lender requires these documents to determine a person’s loan eligibility.
- The lenders verify all the documents and only then approve the loan.
- The amount is later disbursed in 3-5 business days.
What is a credit score? Why is it important?
A credit score shows a person’s creditworthiness. It is a 3-digit number. When applying for a credit card or loan, this is the first check of the personal loan process. It is the indicator of whether a person is going to be a defaulter. You must maintain your credit score. You need to pay off all credit card bills on time, check credit reports correctly, and keep credit utilisation below 30%. A credit score that is above 750 is considered to be healthy. The lenders merely offer loans to them.
You get various benefits for having a good credit score. You are offered lower interest rates. You can also get better terms on credit products. It improves the chances of a loan or credit card application being approved. You get the benefit of a high credit limit. You can also become eligible for pre-approved loan offers.
The personal loan process has been made very easy these days. You can easily apply for a loan online. With various tools like EMI calculators, it is easy for borrowers to plan their loans properly. If you need to apply for a personal loan, then the 6 simple points mentioned above need to be followed. If you are looking for a loan option, then Piramal Finance is a good personal loan/financing option. They have great blogs concerning the personal loan process.