How to Get a Personal Loan?

Many people apply for personal loans for different purposes such as big purchases, debt consolidation, emergency expenses, etc. A personal loan is a short to medium term unsecured loan which is disbursed with minimum documentation and the approval process is quick. If you are thinking of getting a personal loan, read through this article and know the steps of getting the cash you seek at the best possible rate.

1. Requirement:  The first and the foremost step before applying for a personal loan is to determine your requirement for a loan. It is very important for you to figure out why you need a personal loan and how much. For example, you may need a loan to fund your wedding, child’s education, or any other emergencies. Personal loans are very useful when it comes to investing in a business, down payment of a new house, etc.

2. Eligibility Criteria:  The eligibility to avail of a personal loan majorly depends on your disposable income. Visit lenders or a particular financial company to determine if your profile makes you eligible for a loan from that bank or lender. You can also visit the portal of an online loan financial company and check for the personal loan eligibility calculator to find out how much you can borrow as Personal Loan.

3. Check Required Documents:  Though the documentation requirements vary from one financial institution to another, some key documents that you will have to provide while applying for a personal loan include: 

• Income Proof(Salary slip for salaried/recent acknowledged ITR for self-employed)

• Address proof documents

• Identity proof documents

• Certified copies of degree/license(in case of self-employed individuals)

4. Find the right lender:  Different lenders have different eligibility criteria and interest rates. Therefore, instead of randomly applying to a few banks, it is better to do the comparison online to know which bank’s eligibility criteria you meet. Under the personal loan section of many financial companies, after furnishing your personal and previous loan details, you will be able to know the best offers available for yoy.

5. Credit Score: Since a personal loan is an unsecured loan, therefore your credit history usually plays a significant role in the approval process. A good credit score is a must-have for any kind of loan you want to avail yourself. A low credit score signifies you’re a bad credit history. Therefore, if you have a low credit score, it is advisable to improve it before applying for a personal loan.

So, if you work on the key points mentioned above and present yourself as a credible borrower with a good credit score and proper documentation, it will be easier for you to get your personal loan approved.