You might have always had a dream to buy a fancy house, a luxurious car or get rid of your debt in a single attempt. But, as fascinating as it may sound, it is difficult to have a lump sum without filling out a personal loan application. A personal loan can provide you with the kickstart you want to cover up your ends.
In this article, you will know everything about personal loans, why you should be focusing on a personal loan application, how to apply for it and how to improve your application.
What is a personal loan and what purpose does it solve?
A personal loan is an unsecured form of loan where you borrow money from a lender in return for repayment at a specific interest rate. It helps you meet your needs and repay that through small instalments over a set period of time.
To get these types of loans, you neither have to keep any collateral nor a security form which means there is nothing at stake. There is quick approval, quick money disbursal and very little paperwork.
When talking about purposes, the purposes for which you can take a personal loan:
For your expenses, you can fill out a personal loan application. You should not worry because the banks do not intervene in how you spend this money. You can use this money to pay medical bills, renovate your house, or even plan a trip abroad.
You also can use this money to invest in your business venture and take your business idea to the next level. It can also be used for education purposes, paying student debts, making a downpayment, etc.
Why should you fill out a personal loan application in the first place?
A personal loan has numerous benefits,
- It has high flexibility which means you will get a good amount of time, usually 12 months to 60 months to pay it off.
- It is quickly approved, mostly within two days and if you have a good credit score, you can get your money within a day.
- Banks can even extend their loan amount to 40 lakhs which is a huge amount for you. So, the finance can go to the higher end which will benefit you from all angles.
- After you fill out your personal loan application and if it gets approved, money will be transferred within a few hours to your bank account.
- Banks often charge a low rate of interest which is another big advantage. The starting interest rate is 8.5 percent which is a very good number.
- It is very convenient to pay off your borrowed money because of EMIs and extended tenure of repayment. This will give you enough time to collect your interest and pay hr on time.
What is the eligibility to fill out a personal loan application form?
These are the minimum eligibility criteria:
- You should have completed at least 21 years of age to be eligible to fill out a personal loan application. Similarly, you must be less than 65 years old to be able to apply for a personal loan.
- Your income should be at least 25 thousand rupees per month if you are a jobholder. In case, you are self-employed, your salary should be 5 lakhs rupees per annum.
- You should at least have a work experience of about one to three years if you are a jobholder and two to four years if you are a business person.
- You should have a good credit score and a good credit history to fill out a personal loan application form. A credit score of 750 or more is ideal in your case.
How to make your personal loan application better?
The best thing to do is to clear off your previous debts on time. This is a good start towards building a good relationship with the bank and ensuring that you are regular at repaying. The second thing to do is to improve your credit score to 750 so that banks can quickly approve your personal loan application. You can even aim for a higher credit score to settle for a good deal.
In addition, you can create a clean track record of debt-clearing to increase your ties with the bank and help you get your loan easily. It has been highly evident that individuals who had a better credit history and a good credit score, ended up with better interest rates.
Summing it up
Interest rates play a major role in deciding which bank you should look for when filling out your personal loan application. While the starting interest rate is 8.5 percent, some banks charge much higher. You have to make an informed decision by talking to your bank executives and financial advisors.
To keep yourself updated with your EMI payment and interest rates, start using a Personal loan EMI calculator. It is a simple, user-friendly, handy, online device that gives you estimates of your loan status. You just have to put your principal loan amount, rate of interest and tenure of repayment and the tool calculates and shows you the result in no time.
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