Personal loans are a popular form of unsecured financing, primarily because you can use the amount as you wish to. If you are wondering, ‘What are personal loans good for?’, the answer is to fund all your personal needs. For instance, if you are looking to refurbish or remodel your home, the first option you may think of is a home renovation loan. However, sometimes you may not qualify for the amount basis the home renovation loan eligibility criteria. In such cases, you can finance the home renovation with funds from an online personal loan in India. Besides this, you can just as easily use the amount for an international holiday or your child’s education.
Now that you know the answer to the question, ‘Is it a good decision to take a personal loan?’, you may be wondering what you should check before getting a personal loan in India. Take a look at 5 things that you should know before applying.
The best way of securing loan approval is by having a good CIBIL score and meeting the eligibility criteria. Your CIBIL score is an indicator of your creditworthiness and gives lenders an idea of how you have handled credit in the past. To put it simply, the higher your CIBIL score is, the better are your chances of securing a loan. Aim for a score of 750 and above as it is most preferred by lenders.
In terms of eligibility, typically you only need to meet your lender’s minimum income requirements, age-bracket terms and possess necessary documents like salary slips and ID proof to apply.
Before making a personal loan application, it's important that you get a clear picture of where you stand financially. This will also help you determine the right loan amount. To know this, evaluate your income and financial obligations you have currently. This will help you determine if you can or cannot afford to take a personal loan at this juncture. Note that sometimes, lenders may reject your loan application if your debt to income ratio is high, so don’t skip this step.
When it comes to loan repayment, there are three factors that influence your EMIs. Personal loan interest rates, tenor, and the principal amount. The higher the loan amount and interest rate, the larger will be your EMIs. You can check your loan monthly EMI using a personal loan calculator. On the other hand, the longer your tenor, the lower your monthly instalments will be. Once you choose your principal wisely and negotiate a low-interest rate, you may be tempted to opt for the longest tenor. However, this will result in you paying more interest on the whole. So pick a tenor that’s short, but doesn’t put undue stress on you.
Likewise, chalk out the resources you will use to repay the loan. Keep your debt to income ratio low to free up funds, manage liquid finances by budgeting smartly, and plan prepayments.
Once you know the ins and outs of the loan you desire, choose a lender that makes personal loan financing most economical and beneficial. One of the most preferred personal loan providers in India is Bajaj Finserv. Its personal loan offers you finance up to Rs.25 lakh, at affordable interest rates and on flexible terms. You can repay the amount over a tenor ranging from 12 to 60 months and use the flexi loan facility to your advantage.
The flexi loan feature allows you to borrow from your approved sanction in parts, as you need to, and pay interest only on the amounts withdrawn. Further, you can bring down your EMIs by up to 45% by paying interest-only EMIs through tenor and repaying principal at the end of the tenor. In case of surplus finances, it permits you to make prepayments at no extra charge.
If you’re wondering how to apply for a personal loan, the good news is that you can get an instant personal loan in India by simply applying online. After filling out a brief application form, you have to provide supporting documents to complete the process. However, the quickest and simplest way to apply is by checking your pre-approved personal loan offer from Bajaj Finserv. Doing so will give you a chance to apply via a customised deal.
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