Personal loans are a
boon during the time of any financial crisis. It's an easy process which takes
half of the time as compared to other loans. But this process becomes rigorous
and exhaustive when you have a very little knowledge of what all you need for
applying for a personal loan.
Here are certain points
that are needed to be kept in mind by all the candidates applying for a
personal loan.
Interest Rates
Loan and the interest
rate go hand in hand, you can't ignore the other while focusing on the other.
It is one of the major determinants in deciding if you should go for a personal
loan or not. The financing cost of a personal loan is normally bolted. It
doesn't change over the loan period. In any case, there are rates that are
variable and change intermittently. The downside of a variable interest rate is
that your installments can vary as your rate changes, making it harder to the
spending plan for your credit installments.
The interest rate
depends on your FICO assessment (credit score). By and large, the better your
score, the lower your loan interest. Lower financing costs are clearly perfect
since this means paying less in return for obtaining the credit.
Necessary Documents
Proper documents are a
prerequisite when a loan is to be sanctioned, thus you should have all the
necessary documents ready with you.
Identity Proof: -
Passport / Driving License / Voters ID / PAN Card (anyone)
Residence Proof: - Leave
and License Agreement / Utility Bill (not more than 3
months old) / Passport (anyone).
Latest 3 months Bank
Statement (where salary/income is credited).
Salary slips for last 3
months.
2 Passport Size
photographs.
However, there is a
slight change in the requirement of documents for self-employed individuals.
Residence and identity proof being the same, the individual has to submit
Income proof (audited
financials for the last two years).
Latest 6 months Bank
statement.
Office address proof.
Proof of residence or
office ownership.
Proof of continuity of
business.
Eligibility Criteria
Different banks have
different criteria when it comes to the eligibility to sanction a personal
loan. But the generalized norms that are followed are:
Minimum Age: – 19 years
Maximum Age: – 60 years
Minimum salary: – Rs
15,000
With the above criteria
being met, your loan will be credited in your account. However, again criteria
for a self-employed and salaried employee are different.
Unsecured
Personal loan is an
unsecured loan meaning that they require no collateral or mortgage against the loan
amount. but that doesn't mean that due to the incapability of paying
the loan amount the banks would be unable to take any action against you. the
banks may use other alternatives such as complaining to the credit bureaus or
filing a lawsuit in the house of court.
Therefore, it's
important for the borrower of a personal loan to know about every aspect of it,
in order to be fully aware and protect himself from any adversary.
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