A personal loan is a quick fix to your financial issues. It helps you to get out of a stressful financial situation. A personal loan can be used for any lawful reason. Whether it is renovating your house, going on a vacation, paying medical bills or fees for higher studies, a personal loan can be availed for any kind of financial requirement. Before you decide to take a personal loan, there are a few things which you should keep in mind. Here we have a checklist which you should know before and when you apply for a personal loan.
1. Interest Rate Charged
This is one of the important aspects of a loan. Each personal loan applicant will be charged a different interest rate as the rate is dependent on the applicant’s risk profile, loan amount, eligibility, employment history, monthly income etc. When you are looking out for lenders who offer personal loans, compare the interest rates charged by different lenders. It should be an integral part of your consideration.
2. Loan Tenure & Amount
It depends on a lot of factors such as your income, repayment capacity etc for your loan amount to be approved. There are minimum and maximum criterion for the loan tenure and loan amount. You need to figure out the tenure and see if the lender agrees to it.
3. Amount of Personal Loan EMI
An EMI is something which you will have to pay at the end of each month. You can now calculate your EMIs beforehand using the personal loan EMI calculator. This is a handy tool which gives you an approximate of your EMIs. All you need to do is fill in details such as loan amount, interest rate and tenure.
4. Loan Prepayment Charges
If you get surplus funds, then you can use those for prepaying the loan. What you need to check is if the lender provides you with prepayment facility and whether there are any prepayment charges for the same.
5. Personal Loan Eligibility Criteria
Every Bank or NBFC will have certain personal loan eligibility criteria which an applicant has to match. The basic criteria are as follows:
● The applicant should be a salaried professional or a self-employed entrepreneur
● The minimum age of an applicant while applying for the loan should be 21 years
● The maximum age of a borrower at the end of the tenure should be 60 years if salaried and 65 years if self-employed
Every lender will have different eligibility criteria but the basics remain the same. You need to check it with the lender beforehand and make sure you do not fall short of anything. If you do, then there are high chances of your loan getting rejected.
6. Documents Checklist
There is minimal documentation while applying for personal loan. Online personal loans have paved the way for paperless loans. The documents required are as follows:
3.Bank account details
4.Last 3 months Salary Slips
Personal loans are a great relief at times of a financial emergency. The above are some important things which you definitely need to know when you think of applying for a personal loan.