A personal loan is an ideal financing solution for you when you are looking to access a hefty corpus quickly and easily. This is because you can avail the loan without pledging any asset and there are no restrictions on the end-use as well. This means you can use it to fund a plethora of personal and professional needs like your child’s education, a grand wedding, a family vacation, business expansion, or home renovation, as per your requirement.
However, when applying for a personal loan, apart from checking the personal loan interest rates on offer, also pay attention to other loan terms and charges, eligibility requirements, repayment terms and much more to opt for an affordable sanction.
Take a look at the 5 important things you must check when applying for a personal loan.
Know Your Credit Score
Your credit score depicts your creditworthiness and boosts your personal loan eligibility. Lenders regard a score of 750 or more as a good credit score. CIBIL, one of the most reputed credit rating agencies in India, follow a basic guideline, using which they give every borrower a three-digit score. Better known as the CIBIL score, this score considers your repayments and debt as two important markers.
A track record of timely repayments forecasts your debt management skills. This, coupled with a good income and a stable debt attributed to 30% or 40% credit utilisation ratio, will help you score higher than 750. This is regarded as an ideal credit score for a personal loan. So, check your credit score before proceeding to apply for a personal loan, as a good score will give you ample negotiation power.
Decide your requirements in advance
A personal loan can serve you appropriately during your needs by offering you ample funding. However, over-borrowing is equally problematic as under borrowing. Borrowing less than what you require will make you attend to your needs partially, while over borrowing will increase your overall debt and your EMIs. This is why balancing your funding needs and the amount you borrow is very important. Budget your needs and list the amount you require for each and then add it all up to see how much of a loan amount you require and borrow accordingly.
Choose a tenor based on your budget
Once you figure out the right loan amount, you can proceed to decide a tenor for your loan. Use an online personal loan EMI calculator to find out the perfect tenor for repayment. Enter your loan amount, interest rate, and a tenor of your choice in the calculator to get EMIs. Now, based on the amount you wish to repay every month as EMIs, you can toggle the figures for the tenor. This will help you choose a pocket-friendly EMI and a tenor. Deciding the loan structure for your loan in advance using the online method will help you plan better. As this tool is free, you can tweak your parameters as many times you want to reach the right combination.
Evaluate eligibility terms
A stable job indicates stable income. Therefore, lenders check your repayment capability by checking your employment record. So, avoid switching your job frequently if you plan to apply for a personal loan. Along with this, you need to check the other eligibility terms and conditions of top lenders. This may include your age, city of residence, and a minimum income. Qualifying for a loan basis the lender’s prescribed eligibility terms will help you negotiate a better deal. So, knowing these in advance and then apply for the one best suited to your profile.
Compare lenders to choose the best
It is crucial to compare various financial institutions and choose a reputed one. This will help you avoid falling prey to gimmicky offers and multiple loan rejections. When doing your research, compare lenders based on the features and benefits they attach with their loan offer. This will help you select reputed NBFCs like Bajaj Finserv who offer personal loans of up to Rs.25 lakh on nominal personal loan interest rates, which you can repay through a tenor of up to 60 months. Moreover, you can qualify for the loan basis easy-to-meet eligibility criteria and apply for it using minimal personal loan documents. Once you have applied, you can get approved for your loan and have money in your account, all within 24 hours.
Apart from an easy application, you can also borrow the sanction as a flexi loan and withdraw from your sanction on the go, in parts, multiple times. Here, you will be charged interest only on the amount you use and you can also choose to repay the loan via interest-only EMIs and pay the principal at the end of the tenor. This will allow you to save 45% on EMIs.
Keeping these tips in mind, you can proceed to apply for a personal loan. To get started, check your pre-approved offer from Bajaj Finserv. Choose a customised deal of your choice and apply using it to expedite your financing.
