A personal loan allows you to borrow money to meet different personal expenses and subsequently make the repayments over time. Personal loans are an ideal means of funding to fulfill different purposes such as home improvements, medical expenses, wedding expenses, vacation, debt consolidation, etc. If you want to know how to get a personal loan let us tell you that nowadays you can easily get a personal loan online if you meet the eligibility criteria. A lot of online lenders have come forward to offer personal loans at attractive interest rates due to intense competition in this field. You can compare the loan options online given by different lenders and choose one according to your income and repayment ability.
Since personal loans are unsecured which means there is no guarantee required to get the loan, they can be quickly processed compared to home loans. The lender does not require cross-checking the facts and details of the assets, for example, a home you are going to buy. The lender will only require verifying your details on the loan application and your credit history. Apart from it, the lender will want to know if you have a stable job or a stable monthly income so that you can pay your monthly repayments on time. If you meet the criteria set by the lender your loan will be approved.
- Like a typical loan, the first stage of processing starts with your application for the loan. You can collect this application physically from the lender’s office or download it online. Downloading the application online and filling out the details will take less time. Moreover, online applications are processed more quickly than offline ones.
- Once you submit the application online, your lender will receive it. Next follows the stage of verification of the details you provided on your application. Various things will be verified such as your bank statements, salary slips, income tax return receipts, any outstanding EMIs running in your bank account, etc. Your identity proof and address proof will also be verified in the process. The lending organizations verify these documents through various government portals.
- If you are a regular employee, you will require producing your salary slips and IT returns. On the other hand, if you are self-employed, you will require submitting proof of your business, your earnings, and ITR copies. If you own your business office, you will need to provide the property details.
- Another important thing that lenders look at is your credit history. Your credit history shows if you can be trusted as a borrower or whether you will pay back the home loan insurance on time. Your salary slips are also taken into regard to knowing your creditworthiness.
- Your credit score will be checked. If you enjoy a score of more than 750 you will surely get the loan. Your credit score will decide how much amount you are eligible to get. Various other factors such as your current age, your annual earnings, your retirement age, etc play a decisive role in fixing your loan amount and the duration of the loan.
- Your debt-to-income ratio will also be examined as part of the loan processing. It refers to the percentage of your net monthly income which goes to repay your current debts. This establishes how risky you are as a borrower. This ratio could vary from lender to lender. But lenders always prefer a balancing debt-to-income ratio to further your application. Usually, lenders favor more than 36 percent of this ratio to approve the loan.
- Lastly, if all terms and conditions are fulfilled by you, the lender will approve your loan. A lump sum processing fee will be charged while disbursing your loan to your account.
- After the processing of the loan, you can receive the loan amount in your account within 24 to 48 hours.
Also Read: I need 50000 rupees loan urgently
Things to remember
It is important to have proper knowledge of interest rates and repayment duration while choosing your loan. The interest on personal loan differs from lender to lender. You should always try to get the loan at a low-interest rate because this will affect your monthly repayments. Your EMIs or equated monthly installments combine a portion of the principal amount, and interest rate. So, a higher interest rate will result in higher monthly EMIs.
On the other hand, with a longer repayment tenure, you will end up paying back higher loan amounts. But a longer repayment tenure has many advantages as it will lower your monthly EMIs. And you will feel less burden while paying them. So choose a comfortable tenure that is neither too lengthy nor too short.
Though the interest on personal loan may vary from lender to lender. Almost all lenders check some of the common factors to fix the interest rate. This includes your income, your credit history, the reputation of your organization, your repayment history, etc. sometimes your relationship with the lender also enables you to negotiate on the interest rate.
If you search online how to get a personal loan you will see numerous. Lenders offering such loans at various interest rates. The eligibility of a personal loan stays the same with all lenders. So, you should remember these things discussed above citing various aspects of a personal loan.