Personal loans are a great source of liquid funds for all your short-term financial needs. If you’re ever running low on cash, you can always approach a bank or financial institution and request for a personal loan in your name.
You won’t have to provide any reasons for availing the loan, and the process is simple and transparent. When you take out a personal loan, the interest rates tend to be a tad bit higher than most other loans. But given the fact that these loans are so versatile and can be procured easily, they’re one of the most attractive financing options in the market.
Of course, before granting a loan, lenders will check personal loan eligibility and determine whether you fit the criteria they’ve listed out.
Check your Eligibility
There are a number of reasons why it’s essential to examine whether you’re eligible for a loan before approaching a lender.
For starters, you need to examine your finances and check whether you can afford the loan. You should be earning enough every month to be able to comfortably pay the EMIs while still meeting the rest of your financial requirements. Lenders will use a personal loan eligibility calculator and only grant you a loan only once they determine that you have the financial capacity to repay it.
When you’re taking a personal loan there are numerous documents that you’ll need to provide. These include your identity and address proof, bank and financial statements of the past 3 months, and ITR statements for the last 3 months in case you’re a self-employed individual. Banks will take a look at all this paperwork and figure out whether you can pay off your debt within the repayment tenure.
Once they’re satisfied with the documents, they’ll approve your loan and the funds will be disbursed within a couple of days.
Why it’s Important
Before you apply for a loan, it’s absolutely essential that you sort out all your documents and ensure that you’re eligible to avail the funds.
If you haven’t got all the prerequisites in place, the bank or financial institution may turn down your application for a loan. Although it may not seem like a problem, a rejected loan application reflects poorly on your credit score. Having poor credit, in turn, makes it difficult for you to borrow money from the bank, and you’re likely to be charged a higher interest rate than customers with a better score.
Once you’ve got everything in place, it’s best that you scout out your options and find multiple lenders offering personal loans. Each lender will have their own terms and conditions on this source of funding, and you should find the one that best suits your needs.
These are a couple of things to keep in mind when you’re opting for a personal loan online apply. The best part about this kind of loan is that you can use it for a variety of purposes. You can fund a wedding, pay for a vacation, and even pay off another debt with a personal loan. So if you decide to approach a lender for one, make
About: Anamika Verma writes on various types financial loans and has a vast experience as a financial advisor. Her expertise on financial issues is well sought after and she is known for her in-depth knowledge topics such as debt management, liquid assets, mutual funds etc. She has written more than 1000 blogs on topics related to home loan, business loan, doctor loan, EMI finance, gold loan and loan against property and shares. A post-graduate in finance management , Anamika loves to travel or cook in her free time.