Personal loans rank as the second most commonly availed type of loan after home loans in the country. Banks readily offer personal loans, often charging high-interest rates. However, by considering certain factors before obtaining a personal loan, one can prevent banks from imposing excessive interest rates, thereby reducing the EMI burden and facilitating quicker loan repayment.
Securing a personal loan has become convenient in contemporary times. Gone are the days of waiting in banks; now, simply apply through your mobile, submit the necessary documents, and receive funds in your account within hours. Before pursuing a personal loan, self-assess by asking essential questions. Proceed to the bank only after obtaining satisfactory answers to ensure a well-informed decision.
Make Sure To Have Stable Income
A stable source of income is crucial for obtaining a personal loan. Typically, banks require a monthly salary of at least Rs 30,000 for working individuals to approve a personal loan. However, retired individuals often face challenges as banks are reluctant to extend personal loans to them.
Introspect The Purpose
Before obtaining a personal loan, it’s essential to introspect and question the purpose behind it. Assess the genuine necessity of the loan—whether it genuinely fulfils your needs. Consider if borrowing from friends or relatives could be a viable alternative before opting for a loan.
Calculate Precisely The Need
Opting for a personal loan involves committing to a new agreement, emphasising the importance of borrowing only what you truly need. Calculate the precise amount required before seeking a lender, enabling you to determine the necessary funds and make appropriate arrangements accordingly.
Understanding Tenure
Understanding the loan tenure is crucial when contemplating a personal loan. Typically spanning from 12 to 60 months, certain institutions extend the range from 6 to 96 months. Selecting an appropriate tenure aligns with your financial requirements and repayment capacity. Opting for a longer-term loan reduces EMI burden, though short-term loans generally feature lower interest rates. Consider these factors for a well-informed decision.
Prepare Necessary Documents In Advance
Preparing necessary documents in advance is essential for a swift personal loan application process. Typically, required documents encompass ID proofs like an Aadhar Card, Passport, PAN Card, Driving License, Voter ID Card, and two years’ Income Tax Return (ITR). Submitting these documents promptly facilitates quick loan disbursement from the lender.
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