Personal loans can rightly be called as saviours for anyone stuck in a financial emergency. These loans are disbursed quickly and do not require any lengthy documentation. One’s KYC and financial information is all it takes to get a personal loan. Different lenders offer personal loans at varied interest rates. It is thus always better to compare different lenders on the grounds of the rate of interest, loan amount, loan tenure, etc before making the final decision.
One of the greatest advantages of personal loans is the fact the borrower can use the money for any given purpose. They can use it for meeting their travel expenses, expenses pertaining to wedding, attend medical emergencies, home improvement, working capital for business and much more. It is one multipurpose loan which allows the borrower to use the money as per his needs and requirements.
Personal loans are unsecured in nature meaning that the borrower is not supposed to keep any asset or property as a security with the lender. This puts the lender at risk as there is no collateral involved. To lower their risk, lenders charge a comparatively higher rate of interest on personal loans. Though the eligibility criteria for obtaining a personal loan is not stringent, the lenders take your financial aspect into consideration to check if you will be able to pay back the loan amount. The other crucial factor which the lenders seek is the credit history or the repayment history of the borrower. This is checked upon by their Credit score. Usually, individuals with an excellent credit score are offered personal loans quickly. This doesn’t mean that low Credit score won’t get you a personal loan. Some lenders offer the loan to individuals with not so good credit history and in return charge higher rate of interest. Also, a good credit score puts you in a negotiating position wherein you can ask the bank or lender to give you a better deal in terms of the interest rate.
Different banks and lenders have different eligibility criteria for personal loans. However, more or less they are same in the following aspects.
- Age: The borrower must be between 21 to 60 years of age.
- The borrower must be an Indian citizen.
- The borrower must be a salaried individual. He may be employed with a private, public or multinational company.
With personal loans now easily accessible online, the application process has become much convenient. The eligibility criteria, however, remains the same and the applicant must comply with it to avoid getting his application rejected. Getting the application rejected can have a negative effect on your CIBIL score and hence it is advisable to read the terms and conditions thoroughly. Also comparing different lenders is very crucial if you wish to get the best offer. The Online platforms of LoansJagat are excellent for comparing different lenders on account of their offerings. One can apply directly from their platform and leave all the hassle of getting the loan application approved to them. They uphold all the responsibility of your loan application process and stays in touch with you till the time loan amount is disbursed in your account.
Here are a few Dos and DONTs to improve your personal loan eligibility.
- Before applying for the personal loan, check the eligibility. One can do that either by visiting the individual bank’s online portals or by visiting the LoansJagat.com. Complying with the eligibility criteria minimises the chances of getting the loan application rejected.
- Apply for the amount for which you are eligible for on account of your financial stats. To check for the eligible amount, use the online eligibility calculator on LoansJagat.
- Pay the EMIs on time. This is essential for maintaining a good credit score.
- Keep your credit utilisation ratio under 30% to enhance your credibility.
- Avoid taking multiple loans simultaneously.
- Don’t forget to make the loan repayments on time.
- Avoid having a high credit utilisation ratio.
- Don’t apply for a loan with different lenders frequently.
Personal loans are a great way to enhance your creditworthiness and increase your Credit score, commonly referred to as the CIBIL score. The applicant must keep the above Do’s and Don’ts in mind and aim to avoid any defaults. Though personal loans provide you with the immediate financial aid in times of money crunch, one must not forget that it is a liability and the borrower owes the responsibility of repaying it back to the lender. Thus, apply for that much loan amount which you actually want and not go overboard with it.