All You Need to Know Before You Apply for Personal Loan

Posted by Arwind Sharma on March 26th, 2018

A large number of people are interested in borrowing a Personal Loan to fulfil their needs. Personal Loans help the borrowers to overcome their shortfall. There are several obstacles that arise in the form of expenses such as child’s higher education, medical expenses, car or a house purchase etc. These constraints need a solution sooner rather than later. Thus, the majority of the people lean on Personal Loans to help themselves.

A Personal Loan is an unsecured form of a loan which is provided by majority of the financial institutions. There are financial institutions which help the individuals to meet their needs. The most distinguishing factor of a instant Personal Loan is that under this type of a loan, collateral is not provided. In other forms of loans, collaterals are required to be put up against an asset which might include property, gold, etc.

Why and When to Borrow a Personal Loan?

Usually, it is advisable to use your savings before you borrow. Most of the needs can be fulfilled with your savings. However, when savings are not enough to meet your needs, you can opt to borrow a Personal Loan. You can approach Non-Banking Financial Companies (NBFCs) and other lenders for the same, who are offering Personal Loans. These NBFCs provide flexible Personal Loans with high benefits.

There are Several Benefits of Borrowing Personal Loans from an NBFC:

• Instant approval

• Quick Disbursal

• Payment of affordable EMI

• Line of Credit

• Affordable rate of interest

These are just a few of the many benefits that are offered under Personal Loans. There are various ways in which a Personal Loan can be utilised. These include purchasing of automobiles, gadgets, home appliances, medical expenses and other emergencies. There are a wide range of options when it comes to optimally utilising Personal Loans.

Essential Things to Know Before Borrowing a Personal Loan:

Eligibility Criteria: The Personal Loan eligibility criteria varies from lender to lender. There are several pre-requisites as set by the financial institution which is required to be met. With regards to eligibility, it is important to know that the NBFCs offer more flexibility as compared to other financial institutions. The eligibility criteria often include:

• Age

• Occupation

• Income

• Residence

Loan Duration: Personal Loans are often provided for a tenor of 1-5 years. It is important that the loan term is duly taken into account when deciding upon the loan amount. The combination of the two determines the EMI that is paid.

Disbursal of loan: Most of the lenders take nearly seven working days to follow up with the payments after the loan application is completed. However, there are several highly rated NBFCs which provide the amount within 72 hours.

The rate of Interest: Similar to other form of loans, a Personal Loan rate of interest is the most crucial part when borrowing a home loan. Even a small difference of 0.10% matters in the long run. When it comes to the repayment of Personal Loans, a lower rate of interest is very beneficial.

These are few of the things that you must know about before you apply for a Personal Loan. A fair groundwork will help your cause in getting the best deal.