A personal loan is an unsecured form of credit provided by banks and other financial institutions. People usually apply for a personal loan as a result of unexpected or unforeseen expenses or to meet short-term planned needs like trips and quick purchases – a trend that is becoming increasingly popular lately. Some people also apply for a personal loan when buying a major asset like a car or a home loan.
What is a personal loan?
A Personal loan is a loan that does not require collateral or collateral and usually comes with minimal documentation. You can use the funds from this loan for any legitimate financial need like any other loan; you must repay it according to the terms and conditions agreed with the bank. Factors such as your income level, repayment capacity, employment history and occupation determine whether you can receive a loan.
Before applying for the best personal loan, let’s review the five essential things you need to know.
1) Assess your needs before taking out the loan
Assessing the costs and requirements of a personal loan is the crucial step before applying for a loan. A personal loan is a financial commitment of interest and monthly payments, including administration fees. For example, EMI and interest payments, among others, before deciding on an amount.
2) Maintain a good credit rating
When applying for a personal loan, a credit report is one of the first things you will need to get. You can request credit reports from any Reserve Bank of India license office. A credit report is your credit score when it tells the bank or lending institution whether or not you qualify for a loan.
3) Check the eligibility criteria
Personal loan eligibility criteria vary from lender to lender, including occupation, age, and income; Before applying for a loan, check with your bank or lending institution for eligibility. Most lenders require the borrower’s age to be between 21 and 55, and in some cases between 18 and 60.
4) Check the additional cost
It is crucial to remember that the cost of taking out a loan is not limited to EMIs and interest payments. There are many other costs, including prepayment fees, processing fees, and late payment fees, which are also added to the overall price. Therefore, before signing the loan document, carefully read the terms and conditions to better assess the feasibility.
5) Check the repayment plan
Always check the repayment plan before withdrawing from the loan. This includes monthly expenses and EMI. Personal Loan EMI Calculator will help you better manage and plan your finances. For example, personal loans offered by banks have a better term selection.
Which bank is the best to take out a personal loan in India?
Well, there are many banks in India for taking out personal loans. IDFC FIRST Bank offers personal loans up to 1 Cr with attractive interest requirements. It allows the flexibility to make up to 40% partial payments. In addition, it also has a top-up facility through which you can avail a top-up loan on your current loan. It allows you to transfer your existing personal loan/credit card and enjoy attractive benefits, including a flexible loan term of 6 to 60 months.
What documents are needed to apply for a personal loan?
You need a valid KYC, three months bank statements, online banking or debit card information to set up an e-money order, e-signature/stamp for faster disbursement. Simply upload these documents and receive your loan amount in your account seamlessly.
How long does it take to get approved for a personal loan?
When you apply for a personal loan, the lender will ask you for documents to verify your identity and your monthly cash flow. Usually it only takes 2-3 days to get money into your account. IDFC FIRST Bank ensures that you get the loan as soon as possible if your documents are in place and clear.