Have you ever been caught in financial trouble requiring instant attention?
Life is unpredictable, and we never know when a sudden need for funds may arise.
If you’re in such a situation, choosing the best Personal Loan in India can be your saviour. But how do you go about getting one in India?
With so many NBFCs and financial institutions offering Personal Loans, the process can seem like navigating through a bustling vegetable market.
Don’t fret; we’ve got your back! Our comprehensive guide will walk you through every twist and turn, ensuring you get that Personal Loan swiftly and efficiently.
Plotting the Course: Eligibility Criteria for Instant Personal Loans in India
Before we delve into the nuts and bolts of the online application for Personal Loans, let’s first understand the eligibility criteria for availing instant Personal Loans in India:
- Age Requirement: Just as you should be 18 to vote, you must be at least 21 years old to apply for a Personal Loan. Depending on the lending institution, the maximum age limit usually ranges between 58 and 60. For instance, let’s take Rohan, a 25-year-old software engineer from Bangalore. He is eligible to apply for a Personal Loan due to his age.
- Income Requirement: Every lending institution has a minimum income requirement. Usually, for salaried individuals, it is Rs 15,000-20,000 per month. So, if Meera, a Mumbai school teacher, earns Rs 30,000 monthly, she meets this criterion.
- Credit Score Requirement: Your credit score, tracked by agencies like CIBIL, plays a vital role. A score above 750 is considered good. But what if you’re looking for a Personal Loan with a low credit score? Don’t worry; some lenders might still provide loans but at a higher interest rate.
- Employment Type and Stability: Both salaried and self-employed individuals can apply. However, a steady job or business indicates financial stability and increases loan approval chances.
- Place of Residence: Some lenders may hesitate to provide a Personal Loan for debt consolidation, to those living in shared or rental accommodation. Thus, having a permanent residence can play a role in loan approval.
The Checklist: Required Documents for Application
Like packing for a trip, you must gather certain documents before applying for a Personal Loan online. Here’s what you’ll need:
- Identity Proof: This can include any government-issued ID like a PAN card, Aadhaar card, Voter’s ID, or Driving license. If Suresh from Delhi is applying, he can use his PAN card as identity proof.
- Address Proof: Documents such as utility bills, rental agreements, or an Aadhaar card can be used. For instance, Rani from Kolkata can use her latest electricity bill.
- Income Proof: For salaried individuals, the last three months’ salary slips can serve as income proof. Self-employed individuals can submit their previous two year’s Income Tax Returns.
- Employment Proof: A letter of employment or business ownership documents for self-employed individuals is required.
Off to the Races: How to Apply for an Instant Personal Loan?
Once your documents are ready and meet the eligibility criteria, you can consider securing a Personal Loan.
1. Traditional Lending Institutions
Like the timeless charm of a classic film, traditional lending institutions are a go-to choice for many when it comes to loans.
Step-by-Step Process:
- Visit the bank’s branch and fill out the application form.
- Submit the necessary documents.
- If approved, the loan amount is disbursed to your account.
Key Points to Remember:
Remember that financial institutions generally have a longer processing time than NBFCs or online lenders.
2. Non-Banking Financial Companies (NBFCs)
Think of NBFCs as your favourite fast-food chain, offering faster loan processing with fewer formalities.
Step-by-Step Process:
- Apply online or visit the NBFC’s office.
- Submit your documents.
- If approved, the loan amount is disbursed to your account.
Key Points to Remember:
NBFCs can be more flexible with their eligibility criteria and might even offer a Personal Loan with a low credit score.
Online Lending Platforms:
Online lending platforms are the new kids on the block, providing a fast, hassle-free loan application process.
Step-by-Step Process:
- Visit the platform’s website or app.
- Fill in your details and upload your documents.
- If approved, the loan amount is disbursed to your account.
Behind the Scenes: Factors Affecting Personal Loan Interest Rates
Now that we’ve explored the process, let’s determine what influences Personal Loan interest rates.
- Credit Score: A high credit score can help you secure a loan at a lower interest rate. Think of it as having a VIP pass at a concert; it gives you access to better privileges.
- Income Level: Higher income signifies better repayment capacity, and lenders may offer a lower interest rate.
- Employer Reputation: If you’re employed with a reputed company, it signals job stability, which may lead to favourable interest rates.
- Loan Tenure: The interest rate can vary based on the repayment tenure. You can save on interest rates if you choose a shorter term, while a longer tenure means more interest payable.
Conclusion
Securing an instant Personal Loan in India is not as complicated as it might seem. Like cooking your favourite dish, it becomes simple once you know the recipe and follow the steps.
Remember to check the eligibility criteria, gather the necessary documents, and choose the right lender that fits your needs. But the most crucial ingredient in this recipe is awareness.
So, stay informed, avoid common mistakes, and you’ll quickly have the financial support you need.
