To contain the widespread effects of the pandemic in 2020, the Government of India announced a nationwide lockdown on 25th March. Although it helped in slowing down the rate of infection, it inflicted a tremendous financial setback in the form of personal loan. As per the Centre for Monitoring India Economy report, nearly 5 million salaried Indians lost jobs due to this pandemic.
Since the economy is yet to recover from this loss, like scarcity of jobs and consolidated salary, individuals find it hard to make ends meet. To address this situation, individuals can opt for an instant personal loan that most financial institutions offer on easy terms.
Points to consider before applying for a personal loan
Personal loans are one of the most viable borrowing options that individuals can avail during any financial crisis. However, there are a few factors that borrowers need to consider to ensure faster loan processing.
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Right loan amount
Choosing the right loan amount is necessary to get a loan sanctioned easily. Borrowers can utilise the funds for any purpose without any restriction. Following are some of the popular reasons why borrowers consider applying for a collateral-free instant personal loan –
- Education.
- Wedding.
- Home renovation.
- Travel.
- Debt consolidation.
Besides, individuals can also utilise a personal loan to meet other financial purposes that are not listed in this list.
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Credit score
This score is a vital parameter that determines the eligibility of a borrower. Since it helps get the best deals on this credit, individuals need to know how CIBIL score is important for personal lending.
Since this score indicates the repayment and spending pattern of borrowers, individuals need to maintain a score of 750 and above to be eligible for this fund. They can adopt some simple financial practises that can help maintain a higher score. Here’s how.
- Clear off the existing debts quickly.
- Limit credit inquiry.
- Reduce Credit Utilisation Ratio.
- Mention all income sources.
Following these tips diligently, individuals can maintain a higher credit score without hassle.
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Personal loan verification process
This process varies from lender to lender, and thus before applying for an instant personal loan, individuals need to check the verification process to avail the assured sum. Generally, the verification process is conducted in the following steps –
- Borrowers apply for the loan.
- A representative of the lender contacts the applicant.
- The financial background and eligibility of the applicant are checked.
- Lenders check the documents to ascertain eligibility.
- On successful verification, lenders approve or decline this application.
After knowing how personal loan applications are processed, individuals should also consider the interest rates to make an informed decision.
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Compare interest rates
The affordability of an instant personal loan depends primarily on the net borrowing cost. Hence, before applying for the funds, individuals need to calculate the EMIs to ensure speedy repayment without any glitch. In this regard, they can also use a personal loan calculator to calculate their liabilities beforehand.
Selected financial institutions like Bajaj Finserv extend personal loans of up to Rs.25 lakh to help address any emergency financial requirements. The personal loan interest rates they offer are also competitive.
This company brings pre-approved offers that make the loan availing process straightforward and helps save time. Besides personal loans, such offers are also available on various financial products like business loans, credit cards and many more. You can check your pre-approved offer simply by entering your name and contact number.
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Check repayment options
Timely repayment of a loan is crucial, and it is one of the essential factors individuals need to consider while applying for this credit. Besides the interest rate, they also need to know the tenor, EMI payable and net interest accrual.
It allows them to choose a tenor that suits their repayment capacity.
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Consider additional costs
Lenders often levy additional fees depending on the service chosen. For instance, they can charge processing fees, prepayment charges, transfer charges, penalty charges, foreclosure charges, etc., from time to time. It leads to additional expenses while servicing a loan.
An instant personal loan indeed proves to be a beneficial borrowing solution for individuals who require to mitigate financial requirements. However, they should also consider the aforementioned tips to reap maximum benefits.
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