A personal loan is one of the most sought-after credit options that help individuals tide over financial difficulties. One can easily turn to availing personal loans to meet high-end expenses, consolidate debt or manage other financial obligations.
Moreover, with digitisation in financial sectors, it has become viable for individuals to get an instant personal loan. However, before applying for an instant personal loan online, individuals must know the particularities of the credit option and hence ask the following questions regarding loan amount, personal loan interest rate, hidden charges, etc.
Top 7 Questions Asked About Instant Personal Loans Online
Individuals must have the answers to the fundamental questions before applying for a personal loan. It will help them make an informed decision. Here are some most asked questions about instant personal loans online:
How much loan can I avail?
The loan amount borrowers can avail of is based on their income status, repayment potential and credit score. However, borrowers must assess their financial needs beforehand to avoid over-borrowing. They must choose a loan amount that they can repay on time. Opting for a lower loan principal will help one pay it off easily and go debt-free faster.
Is it important to keep a decent credit score?
Yes, it is important to maintain a healthy credit score while applying for a personal loan. CIBIL score is a significant determiner that decides faster disbursal. The credit score reflects a borrower’s repayment capacity. As lenders do not have any collateral to fall back on, they approve loan applications based on credit scores. Moreover, a decent credit score will help borrowers fetch affordable interest rates and give them an upper hand in negotiating better loan deals.
What are the requirements to avail of a personal loan?
While looking for a personal loan, borrowers must adhere to the eligibility criteria set by lenders and attach necessary documents. Meeting eligibility criteria is one of the most important requirements that one has to fulfil before applying for a personal loan.
Here are the eligibility norms that individuals must meet to receive approval for a loan application:
- Applicants must be residing Indians.
- Individuals must fall in the age bracket of 21 years and above.
- He or she must have a CIBIL score of 600 or above.
- Individuals must have stable income status.
Besides meeting the eligibility criteria, borrowers must submit necessary documents like KYC papers, salary slips, bank account statements, address proof, etc. Any discrepancy in the documents will lead to the rejection of loan applications.
How much interest does the lender charge on the loan amount?
The personal loan interest rate that lenders charge on the principal amount depends on the credit score, income status, exiting relationship with the lender, debt-to-income ratio, history of defaults, etc. Individuals with no history of defaults and a decent credit score will be charged a lower interest rate. Individuals with a stable monthly income and long employment history are considered financially solvent. Hence, they are charged lower interest rates.
What are the loan repayment terms?
It is equally important for borrowers to be well acquainted with the loan repayment terms. A personal loan comes with a flexible repayment term of 5 years, helping borrowers make timely repayments. EMI amount and choice of loan tenure have a significant impact on borrowers’ future finances. Hence, borrowers must choose a lender extending flexible offerings in terms of EMI amount and mode of repayment.
While longer loan tenure will help borrowers lower the repayment burden and make timely EMI payments, shorter loan tenure will reduce the overall interest outgo. In this regard, one can use a personal loan EMI calculator.
Are there any additional charges?
Yes, there are additional charges that lenders levy on the principal loan amount. Additional charges like processing fees, late payment fees, cancellation charges, etc., contribute towards the loan expenditure. Hence, borrowers must consider these charges before applying for a pre-approved personal loan. Not factoring in these charges will lead to an unnecessary monetary burden and increase the cost of borrowing.
How to apply for an instant personal loan?
The online application for an instant personal loan is fairly simple. Here are the steps that will help individuals apply for an instant personal loan online:
Step 1: Firstly, visit preferred lender’s official website and click on ‘Apply Online.
Step 2: Fill out the online application form with personal and income details.
Step 3: Submit necessary documents. Check for additional fees.
Step 4: Enter the loan amount and submit the form.
On successful application, a representative will communicate and take the residual application steps ahead.
To sum up, a personal loan caters to the varied financial requirements of an individual. However, one must be mindful regarding the choice of lender. They must opt for a lender whose offering matches their needs the best. Settling for lower personal loan interest rates, flexible repayment terms, etc., will help borrowers sail through the repayment tenure. By knowing the ins and outs of the credit option, borrowers can make the borrowing functional.