As we go through life, we are faced with many situations and expenditures which may not be manageable with a monthly paycheck or savings. For those situations, whether it be for medical purposes, marriage, starting a new business, or financing education, we need extra help. Taking loans for specific purposes such as a Home Loan, or a Car Loan may limit the purposes for which they can be used, and require additional collateral with fixed tenure and high rates of interest. It may also take a longer time for the application to be processed. To avoid hassles while borrowing, applying for personal loans become your best bet.
What are personal loans?
Personal loans are loans which can be used to cover personal unspecified expenses and can be borrowed from banks and online lenders. Many sources of these loans offer different rates of interest and terms of repayment. Personal loans are also unsecured loans, which means that you do not need to offer collateral. Therefore the specific aspect makes it easier to apply for personal loans than for other types.
Applying for a personal loan as a salaried person
While it is easier to get a personal loan because there is no requirement for collateral, as well as the quick processing time, there are still some factors that are essential for successfully availing it. Employment history and income are very important criteria. Applying for a personal loan as a salaried worker is therefore much more favourable for you. You can apply and avail of the personal loan because you can show proof of your income and qualify for the loan amount.
Most lenders will also offer you loan repayment installations based on your salary, such that the EMI is not more than half of your monthly income, and you also have flexibility in choosing the tenure of your loan.
How to apply for a personal loan
The process of applying for personal loans has been made very easy due to digitization. Now, instead of making a trip to the bank for your application process, you can directly apply for your loans from the comfort of your home as well. While the process may differ from lender to lender, most banks have the option of applying for a personal loan on their respective websites. You will most likely have to first check your eligibility, and then fill out a form and upload the required documents. If approved, it may not even take more than 24 hours for the loaned amount to show up in your bank account. Through this easy technique, you can avoid the hassle of physically going to the bank.
Requirements for a personal loan application
While the documents required can be different for different lenders, some of the main documents that have to be present along with the application form are:
Proof of income in the form of salary slips, bank account statements, employment certificates, proof of residence; and identification in the form of PAN, and/or Aadhaar cards.
Important things to keep in mind
Other factors also affect your eligibility for securing personal loans such as your credit score or your CIBIL score which is a value that indicates your ability to repay loans on time. The higher your credit score, the better your chances of successfully applying for a personal loan. While some lenders require a CIBIl score of 600 plus, others may be more flexible.
Prepayment of Loan:
It is important to remember that if you pay the loaned amount before the agreed-upon term, some lenders can charge some amount of penalty as foreclosure fees. However, this is not the case for all lenders, e.g. Piramal Finance has 0% prepayment charges.
Minimum Salary Eligibility:
Another important criterion for applying for a personal loan is the minimum amount of salary which differs from lender to lender. Most often, the amount varies from Rs. 15,000 to 30,000 for salaried professionals. Therefore you need to meet the minimum criteria while applying for personal loans as a salaried person.
While personal loans can be for innumerable and unspecified reasons, a minimum age has been set for qualifying for personal loans. The minimum age for applying for a personal loan can vary from 18 for some lenders to 21 for others, and under 68 years of age.
For some lenders, you also need to have 6 months to a year of working at your current work to apply for a personal loan. The more years of work history, the more favourable your chances.
Because personal loans are loans that are often available through multiple channels, some that are online and easy to apply for, you can come across fraudulent websites, and finance forums that offer loans at very low-interest rates to dupe you for your money.
Therefore, it is important to remain alert while searching for the best offers to apply for a personal loan. Always take your time to research whether the site is legitimate or not because your savings matter. To get further information from a trusted source, you can check out Piramal Finance for further clarity. Their easy application process and hassle-free approach are highly recommended.