Tips for First Time Personal Loan applicants

Posted by Trishya Sharma on January 2nd, 2020

An unsecured loan or Personal loan is a loan which covers your unexpected expenses.  It might be a medical emergency in the family, an impromptu trip with buddies that you didn't budget for, or other similar sudden financial expenses that take you by surprise. Cash crunch is real and also if your salary are already accounted for fixed monthly expenditure then unplanned expenses can place you in a fix.  This is where Private loans may save you from financial crisis or ask monies from relatives/ friends.

In the era of digitalization, customization and personalization is in just for everything- even in personal loan. We have the regular, vanilla personal loan which takes care of every fiscal need.  However, Digital Lenders have gone a step ahead and designed Personal loan products that are tailored to meet your financial requirement.

There are two key facets of Personal Loans you ought to understand while picking for one.  The first is these loans give you the flexibility of utilizing it where and how you want to utilize them (unless of course you take the specific personal loans).  And the second part is that you do not need to provide collateral or any security such as hypothecation or insurance papers or or gold or any asset to get a Personal loan.

But why are there different types of Personal Loans?

If you can have a personal loan, then why take custom personal loan?  The solution is simple. These other loans are made to be specific for a goal, Even though a vanilla personal loan gives you a type of free loan. The objective is to keep them flexible in interest rates, terms of tenure, and provisions, as per their use.  Pairing and specification of these loans allow the lender to give you the tenure, interest rates, and suitable payment modalities.  For example, in the event of a wedding, your monthly instalment can be flexible, and you're able to keep this sum reduced for the first five months once you have expenses lined up because of the large day, and after your important expenses are over and you can comfortably switch to routine EMI.

What do I need to remember as a first-time Personal Loan applicant?

Check your Credit Score:

Your credit score is among the factors which determines whether you are qualified for a loan may be extended for you, and what the rate of interest will be.  As you're a first-time loan beneficiary that is personal, odds are you may not know your credit score; in fact, you might not have a credit history at all.  Digital lenders can be of great help here as they use technology in a way that individual credit score can be assigned to you based on any digital financial you have done so far.

Select the Right Loan Provider

There are lots of banks and digital lenders that provide personal loans.  Therefore, it is crucial to assess what works for you according to your need of taking the Personal Loan. The interest rates have been charged, the flexibility of payment that's allowed, the time period in which the loan is disbursed, the repayment exemptions, along with foreclosure charges. Be sure to compare these details of all the lenders you are considering and ensure that you know the terms clearly before making a determination.

Get your Documents in Place

Keep all of your files handy so that your loan is processed in the minimum time and your loan amount is disbursed speedily, without difficulty.  You can get your loan amount following business day, subject to your documents being accurate. Selecting a loan provider that asks you for confirmation that is minimal documentation and sounds transparent is a first good step.

Know the Other Fees/Charges

Ensure that you are aware of the processing charges on the loan and how it's computed.  Know about the total charges applicable under different garbs to be 100% certain on the whole loan amount you receive and the repayment liability.  Loan insurance is an aspect that is important here!  It is an insurance which covers your amount of the loan in the event you are unable to complete your repayment.

 

Why is a Personal Loan rejected (for a first timer)?

  • Poor credit bureau score
  • Insufficiency of documents
  • Failure to fall under the minimum salary/income criteria as defined by lender
  • Multiple loan applications or enquiries

So select the lender, research the conditions and be with your documentation on track.  These will go a long way in improving your chances of being accepted for your instant personal loan!


Trishya Sharma

About the Author

Trishya Sharma
Joined: August 2nd, 2019
Articles Posted: 45

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