What Are the Things to Consider Before Applying For a Personal Loan?
A personal loan is an easy and reliable financial solution owing to the simple terms and conditions laid down by lenders. Financial institutions approve these loans instantly and disburse the funds within the same day.
Applicants have to consider the following points before applying for a personal loan:
- A Good CIBIL Score
NBFCs need applicants to hold a minimum credit score of 750 to be eligible. A good CIBIL score is necessary since these loans are unsecured or collateral-free.
- Low Debt-to-Income Ratio
The debt-to-income ratio is the ratio between your fixed monthly liabilities and monthly income. A high ratio indicates that you may not be able to pay the EMIs, thus leading to penalty charges and debt accumulation. Hence, ensure your debt-to-income ratio is 50% or lower.
- Necessary Documents
KYC documents (PAN/Aadhaar/Voter ID/Passport/Driving License) and bank account statements are the essential documents required to apply for an unsecured loan.
Additionally, customers have to submit employment proof, latest salary slips, and bank account statements.
- Fulfilment of Eligibility Criteria
Applicants have to be within the age bracket of 23 and 55 years, a residing citizen of India, and employee at an MNC/public/private company to satisfy the personal loan eligibility criteria.
- Right Loan Amount
You can get a personal loan of up to Rs.25 lakh. However, the loan amount you can avail depends on several factors such as existing debts and monthly income. Use a personal loan eligibility calculator to find the amount you are qualified for.
Complying with all the points mentioned above can help you secure personal loans quickly. Repaying the loan in due time will also improve your CIBIL score.