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How to apply For Personal Loan?


Posted on : 27/Mar/2019 18:13:16

You are reading this perhaps because you are in look out for a personal loan. May be for your wedding or just to meet your travel expense or for medical need or educational expense, be it anything, the easiest of all loan options is the personal loan.

Personal loan is a seamless loan option that is offered without requiring any form of collateral. Both public as well as private banks tend to offer the loan in very few simple steps. Basically, your ability of repayment is assessed by the bank before sanctioning the loan. They decide the loan value based on your employment, condition of business and other history of credits. With the personal loan, it is possible for you to easily meet your financial crisis situations.

As the first step of applying for a home loan, start by deciding the exact amount of loan you require. Below are the steps to obtain personal loan.

Inspect your eligibility check your potential of repaying the loan without any time delay. Check out the loan eligibility offered to you by the bank. Pick he amount that you will be able to repay with ease. It is advisable that you do not choose the EMI that is more than about 15% of monthly salary you get.

Credit score usually credit score is the score of the range 300-900. When your credit score is higher and lies close to 900, banks tend to offer you more loan. With lesser credit score counting lesser than 750, your likeliness to get the personal loan sanctioned will be less. Of course, you will be eligible for the loan, but at higher rate of interest.

Seek the bank or lender choose the bank where you already hold an account rather than going for a bank where you do not have any kind of transactions as such. So, by approaching such bank, you will already be credible and hence the process of offering loan will be seamless. Say, you want to obtain loan from any money lender, check out their credibility followed by loan cost, tenure, rate of interest, etc. It is generally advised that you opt for your own bank account for availing discounts towards loan and get it processed faster.

Know the little bulk charges - ahead of filing your loan application, prepare a list of all the expenses you will be making out of the loan amount you obtain. Remember that the processing fee for the loan totally depends on the total sum you borrow. This fee may be of the range 1 to 3 percent of the loan you avail.

Also, there is an option where you can settle the loan amount ahead of the given due date. This is called loan prepayment for which you have foreclosure rates applicable as well. In case you are unable to pay out the EMI on time, an additional penalty will be applicable.

Inspect the documentation

The only requirement for you to avail the loan amount is your income proof. You do not have to provide any guarantee or collaterals for getting personal loan.  You need just the documents  plus 

Check the Documentation Required: As there are no guarantors or collateral for this type of loan, your income proof is a major requirement. The following is a generic list of documents needed if you are a salaried person: they are pay slip copies (3 of your most recent ones). Employment letter rolled o out from the HR of the company, and the Form 16 with correct details of your salary.

There are some more additional documents needed in case of professionals who are self-employed. This includes:

         Computation of income pertaining to the past 2 years

         Profit and loss statement of the past 2 years

         IT returns filed in the past 2 years

In case of professions like MBA consultants or doctors, they will have to send out qualification proof while applying the loan.

The other required documents

There are other additional documents needed like the KYC documents which are

         Photo ID issued by the government. This may be Aadhar card or the driving license or others

         Document of proof for address such as water bill or electricity bill 

         PAN card

Note: it is necessary that you submit the latest of all bills. These bills should also contain no spelling mistakes.

Spend enough time to check out the details you provide. There should not be any common mistakes made in the loan application form.

There is going to be a fine print which has to be carefully looked into. Read out the entire document and comprehend with all of the terms mentioned in it. in case of any doubts, get it clarified without any delay. Raise questions about the case of failure of EMI payment, whether the existing bank account will be helpful in receiving funds, whether foreclosure of loan will be possible, available types of prepayment options, whether automatic deduction of EMI will be done, etc. You may raise questions until you achieve complete understanding of the process.

It is definitely a smart move to decide to choose a personal loan, but you need to make sure that you have complete understanding of the process before you file your application. Also check out the affordability of the EMI rates in that case.

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