Irrespective of the purpose, if instant funds are a requirement, a personal loan can be a feasible option for individuals with the right eligibility. Moreover, unlike secured loans, borrowers can also bypass the time-consuming and complicated property valuation process when availing personal financing. Thus, individuals can avail the advance in minimal time through simplified processing.
However, applicants need to be cautious about their credit score while considering the process of personal loan application status. Financers emphasise on a few eligibility measures like credit record, profile, borrower behaviour and income to reduce their lending risk. So, personal loan applicants should hold an excellent score above 750 to project a promising repayment capacity.
Here is a quick guide on the personal loan application process.
Steps to complete quick application for a personal loan
- Perform market research and compare
In India, numerous financial institutions offer personal loans with different advantages and features. Thus, selecting the right product may seem overwhelming in the beginning. But a systematic searching process enables individuals to find out the most suitable product as per their credit and financial profile.
When selecting an advance, individuals should check the loan amount, tenor, rate of interest, foreclosure, and other charges. Depending on the eligibility, a borrower can obtain a personal loan amount of up to Rs.25 lakh with a repayment tenor extending up to 60 months. Also, a range of attractive interest rates is available on this loan product.
Furthermore, most of the reputed lenders also provide foreclosure facilities, whereby borrowers can part-prepay or foreclose the outstanding loan amount based on fund availability. However, this facility may attract additional cost along with other fees like processing charges, late payment fees, etc. So, applicants need to narrow down their searches by comparing the available options to go for the personal loan application process.
- Analyse FOIR
As a debt product, a personal loan also brings a responsibility for timely repayment. Late or default payment not only invites unnecessary penalty fees but also hampers one’s credit record adversely. So, before signing up for any deal, individuals must analyse their fixed obligation to income ratio (FOIR) to assess the EMI amount that remains within their repayment capacity.
This ratio denotes the percentage of individuals’ income that goes towards paying off current fixed debts like EMIs or credit card bills. As per lenders, an ideal FOIR must not exceed 50% of borrowers’ monthly income. So, before following any further process of how to apply for a personal loan, applicants must assess their FOIR for a thought-out financial decision.
- Check and fulfill the qualifying parameters
Checking for eligibility measures is another vital part of the personal loans apply process. On the basis of financiers and product features, these parameters can vary. Therefore, customers should be careful about their qualification for the product they are considering. However, some essential criteria maintained by most lenders are discussed below.
Primarily, applicants’ monthly earnings, credit history, citizenship, and age are thoroughly analyzed by financiers before providing a loan. So, as said earlier, they need to maintain an excellent score along with responsible credit behaviors such as timely repayment, maintaining a good credit utilization ratio, etc.
Moreover, individuals can also increase their income threshold by adding different revenue sources like rental earning, investment returns, etc. These tricks and tips can help applicants to procure a loan facility at more beneficial terms.
- Arrange the necessary documents
Borrowers also need to submit a few important documents while applying for a personal loan to prove their eligibility. These documents may include PAN, Voter ID, Passport, Aadhaar, Driving license, salary slips, account statements, employee ID cards, etc. Nonetheless, depending on the advance amount, and eligibility, financial institutions can ask for other documents as well.
So, borrowers should consider lenders who provide loan facilities with minimal documentation. Bajaj Finserv is one such example of financiers offering personal loans with minimum document requirements. It benefits consumers to avail financial help more conveniently within a short time.
Furthermore, the lender also presents pre-approved offers to provide instant financial assistance with minimum hassle. Other than personal loans, these offers are valid on business loans as well, along with several other financial products. Customers can look for their pre-approved offer by providing their names and mobile numbers online.
Once all these processes are concluded, individuals can move forward to apply for the advance either online or offline. One can, however, save time by applying for a personal loan online. On successful verification, borrowers can receive the loan amount within one day of approval and assign it for various purposes. They can also avail of personal loan tax benefits if the advance amount is used for home renovation.