According to data published by the Reserve Bank of India, personal loan in India stood at a total of Rs.25.3 lakh crore (as of February 2020). This figure indicated a nearly 17% growth in this category of credit. The benefits offered by these financial products played a major role propelling its demand and popularity.
Benefits of a personal loan
The benefits of a personal loan includes the following –
- No-end use restrictions: One of the most prominent benefits of personal loan is that it does not come with any pre-defined usage. Once received, borrowers can spend the funds to mitigate their unique financial requirements. They can use it for any essential or planned expenditure.
- Quick disbursal: Compared to other credits, personal loans are approved and disbursed faster. If an applicant fulfils the eligibility criteria, and submit proper documents, then he/she will get the amount within 24 hours.
- No collateral: Personal loans are short-term, unsecured credits. Applicants do not need to pledge any collateral to avail this type of credit.
- Flexible tenure: Personal loans also offer significant flexibility in terms of repayment clauses. One can select a term that they are comfortable with and pay within that period. Using an EMI calculator can also help borrowers determine their instalments, and make a repayment plan accordingly.
The above-mentioned benefits of a personal loan are the main reason behind the popularity of this financial product. With its help, one can manage any planned or unplanned expenditure without liquidating their savings. Also, applying for a personal loan has become significantly easier, thanks to the integration of online services.
Step-by-step guide for personal loan application
Applying for a quick personal loan is not a hassle anymore, thanks to the introduction of the online application process. Here is a step-by-step guide –
Step 1: Visit the official website of the lender.
Step2: Fill up the loan application form with adequate details.
Step3: Choose the loan amount and repayment tenure.
Step4: After the initial verification, applicants need to submit the required documents. Usually, these are collected by the representatives of one’s financial institution after successful approval.
Step5: Once everything is in order, the loan is approved and the amount is disbursed within 24-48 hours. In case of any discrepancies, applicants can call the customer care number of their lender for assistance.
To successfully complete this application process, one needs to fulfil the eligibility criteria and present every necessary document in order.
- Age: 23 to 55 years
- Credit score: 750 or higher
- Monthly income: Vary as per the requirements of a particular lender
- Employment type: Employee of MNCs, private or public limited companies
- KYC documents
- Proof of employment
- Salary slips of the previous two months
- Bank account statement for the last two months
Three points to mind before applying for a personal loan
The benefits of a personal loan are easily accessible thanks to the features and offers provided by several financial institutions. One must also keep in mind the following points before applying –
- Borrowers must check their credit score before applying for a credit, as it can affect the chances of application approval. In case of a low score, applicants can take the required measures to improve their personal credit score as well.
- Also, individuals must check their repayment capacity before applying as it will help them to create a budget and prevent any debt accumulation.
- Additionally, borrowers should also evaluate the charges associated with a personal loan, and whether a lender is offering a pre-payment facility or not.
Bajaj Finserv is one of such lenders that offer pre-payment facility on their personal loan application, along with several other borrower-friendly terms that help with repayment.
Furthermore, the company also provides pre-approved offers that make the loan application process hassle-free and time-saving. It is available on products like personal loans, business loans, etc. Applicants can check their pre-approved offers by submitting only some essential contact details.
The host of benefits of personal loan make it one of the ‘go-to’ financial products in case of short-term financial requirements. However, borrowers must read the fine print before signing a personal loan agreement to prevent any legal complications later on.