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You can use an instant personal loan to boost your finances or plug gaps when you face a sudden monetary shortfall. An unsecured type of loan, you can obtain a personal loan in India from both banks and non-banking financial institutions. In the past, you would have to go through cumbersome application processes and wait for a long time before getting the financial backing you desire. Today, you can get a loan online and receive the money in your bank account speedily as well.
However, before you apply for personal loans online, consider these 5 points. They will aid you in securing finances prudently and successfully.
1) Evaluate your Personal Loan Eligibility
Lenders require you to meet certain eligibility criteria before they offer you a personal loan. These generally centre around your age, citizenship, and most importantly, your financial status. Issuers are mostly concerned about loan repayment. To gauge your repayment capabilities, financiers check your credit score. Having a score of around 750 should see you meet the green signal successfully. So, before applying for a personal loan online, evaluate your income and credit score as this will avoid a possible rejection.
2) Find Out How Much You Should Borrow and at What Cost
While you financier may offer you a large loan amount, you need to ask yourself two questions. “How much do I need?” and “How much can I afford?” Affordability is measured primarily by your debt-to-income ratio. This is the proportion of monthly income that goes towards clearing all kinds of debts.
Strive for a ratio that is in the range of around 30% as you require the balance to take care of other obligations. If you really require more finances, look for additional income sources as this will decrease the ratio and thereby make the loan more affordable for you. If boosting your income isn’t a possibility, consider reducing the loan amount.
3) Plan your Repayment Wisely
Today, it is very easy to get a loan online. You can make an application from the convenience of your home. However, don’t let haste leave you without a well-chalked out repayment plan. In fact, you don’t have to sweat over tiring computations when planning your repayment. Simply use an online calculator like Personal Loan EMI Calculator to deduce your monthly instalments. When going about this, try to arrive at the shortest possible tenor. A longer tenor reduces your EMIs, but increases the net amount you will need to pay through the term as interest.
4) Read Fine Print
An instant personal loan is convenient and in case of an emergency, it can save you a great deal of time. As with other online products, you may be tempted to click ‘I agree’ on every box that comes your way and, in the process, you may miss out on reading the fine print. However, spending a few moments at this step can save you a great deal of stress later on. Check for prepayment and foreclosure charges, late fees and interest rates, loan cancellation charges, EMI bounce fees, and other legal charges.
5) Check Out What your Preferred Lender has to Offer
Once you have these essentials in place, look for USPs your preferred financier has to offer you. For example, when you opt for a personal loan from NBFCs such as Bajaj Finserv, you not only get a 24-hour loan disbursal and variable repayment tenors of 12 to 60 months, but you also profit from the flexi loan facility. This feature allows you to borrow from your sanctioned personal loan multiple times without the need to make new loan applications. Further, you can reduce your monthly payments by up to 45% by paying interest-only EMIs through the term and clearing the principal at the end of the tenor.
Now that you know what to look for when seeking an instant personal loan, take the next step and access finances of up to Rs.25 lakh quickly.
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