India's personal loan segment is projecting a strong growth as per the reports from the RBI, which showed how this financial product had comprised 28% of the total credit book of this country, till February 2020.
The borrower-friendly amenities of this financial product are a significant reason behind its soaring popularity, one of the most prominent among them being quick disbursal. However, to avail of a fast personal loan, one needs to keep in mind a few pointers to fast-track their application.
9 Points to evaluate before applying for a personal loan
Here is a guide that borrowers can follow to avail of a fast personal loan, without any difficulties –
Maintain a good credit score
This three-digit number represents the creditworthiness of a borrower depending on his/her repayment history. This score ranges from 300 to 900, and the lender considers 750 or above as the ideal one.
A low credit score testifies bad debt management and may result in a loan application getting rejected, or anapplicant may need to pay higher interest rates.
Moreover, maintaining a healthy credit score is not a hassle. Timely EMI payments, keeping a low credit utilisation ratio, etc. enables borrowers to maintain a healthy credit score with ease.
Compare interest rates
Since interest payments constitute a significant portion of any debt repayment, it is vital to check the rates beforehand. Prospective borrowers can check personal loan offers from various lenders, and avail better interest rate for the personal loan.
Assess other costs
Apart from the interest rate, every loan application consists of additional charges like processing fees, foreclosure charges, etc. Together, such additional fees can drive up the total cost of a loan, and increase the financial burden on borrowers.
Verification process
Before applying for this financial product, one should be aware of the personal loan verification process. It will help them to gauge the time required to avail the funds and plan their expenses accordingly.
Prepayment options
To ease the loan repayment process, lenders offer a part prepayment facility. Here, individuals can make a lump sum payment and reduce their EMI outgo in the long run. However, lenders may ask for a fee to allow borrowers to use this facility. Therefore, it is a vital point to check before applying for a personal loan.
Find the right loan amount
Applying for a loan is not a hassle anymore, especially with the introduction of online services. However, it is imperative to decide the loan amount beforehand to avoid any confusion.
In this regard, individuals can assess their needs in advance and arrive at a particular figure that they require. They can then apply accordingly.
Financial planning
Financial planning is crucial to avoid facing any difficulties with the repayment. After determining the personal loan amount, individuals can use a personal loan calculator available online to gauge the monthly instalments, total interest, etc., in advance.
It will assist them in planning their finances accordingly and eradicate the chances of EMI default.
Read the fine print
Every loan application consists of different terms and conditions, which one should read in detail before applying. It will enable them to be aware of different loan terms and avoid any future mishaps.
Look for pre-approved offers
Leading lending institutions like Bajaj Finserv allow its customers to get a fast personal loan with the help of pre-approved offers. Available on financial products like business loans, personal loans, etc., this offer streamlines the loan application process, and saves time. Borrowers can check their pre-approved offer by submitting essential contact details.
Fast personal loans are an excellent financing method to meet an array of monetary requirements. However, one should keep in mind the above-mentioned pointers to get the best personal loan. This will also help in optimising the entire process more effectively.
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