Know Everything About Availing of a Personal Loan in India

A prominent shift in credit behavior led most borrowers to migrate towards unsecured credit like a personal loan in India. The popularity of this credit is bolstered primarily due to millennial borrowers. As per a recent report,

•         During the last two financial years, almost 41% of personal loan borrowers were between the age group of 18 to 30 years.
•         Overall, the personal loan is forecasted to grow at 10% between 2021 and 2025.

Financial institutions, including NBFCs, optimized their loan application process, resulting in shorter processing time, prompt disbursal, an online loan servicing facility, and several others.

Moreover, the unsecured loan can also be used for various purposes like funding higher education, luxury vacation, wedding, home improvement, and many more. Before applying for this credit, individuals need to keep a few pointers in mind to leverage optimum benefits.

Ø  Purpose of usages

Since a personal loan in India does not come with any pre-condition on end-use, individuals can use this fund for any of their personal or professional requirements. Popularly, individuals opt for this advance for the following funding.

•         Education
•         Wedding
•         Vacation
•         Debt consolidation
•         Any high-ticket purpose.

Besides, individuals often resort to a personal loan to address any financial emergency. Moreover, while higher education loans come with end-use restrictions and are generally available against collateral, a personal loan can be used for the same purpose with added benefits.

Ø  Eligibility criteria

Whether you use a personal loan for education or any other purpose, meeting the eligibility is of utmost importance. Every lender sets some specific parameters to gauge the repayment capacity. Hence, the CIBIL score is important for personal lending.

Apart from this score, one needs to fulfill several other eligibility criteria as well. For instance, you must reside in India; you should be employed in any MNC or have a steady income source, age should be from 23 years to 55 years and many more.

Ø  Repayment structure

Irrespective of the loan amount, individuals need to repay on time. It is vital not only to clear debts but also to maintain a decent credit score. Hence, checking the interest rate, EMI, maximum tenor, and overall borrowing cost is crucial for borrowers. To facilitate this process, they should only know how to calculate personal loan EMIs.

Borrowers can also use a personal loan calculator and amortization schedule to stay informed about their liability. A recent survey revealed that

•         76% of respondents are unaware of the interest rate of their loan.

To avoid such circumstances, borrowers need to sit with the lender and negotiate for a better interest rate.

Ø  Pre-approved offers

Remember to check the additional benefits like pre-approved offers that existing borrowers can consider before applying for this credit. Top NBFCs like Bajaj Finserv also offers a personal loan up to Rs.25 lakh with a competitive interest rate.

They also extend pre-approved offers that make loan availing straightforward and quick. Besides personal loans, such offers are also available on a range of financial products like business loans, credit cards and many more. You can also check your pre-approved offer simply by entering your name and contact number.

Ø  Loan application process

It constitutes a major part of servicing a personal loan in India. Generally, the loan application process is made easy for a personal loan so that borrowers can get their hands on this fund as soon as possible. Depending on the lender, the loan disbursal takes as low as a few hours, making it one of the sought-after credit products available right now.

Ø  Additional charges

Besides the overall borrowing cost, lenders also charge additional fees from time to time. For instance, they may charge processing fees, foreclosure, and part-prepayment charges.

Hence, individuals need to consider personal loan charges that they have to pay during the tenor. These are some of the essential things that borrowers should keep in mind while opting for a personal loan in India.