The growing demand for personal loans requirements shows how Indian people are inclined toward this easy option of accessing funds. However, many people do not understand the idea of a personal loan.
How to Qualify for a Personal Loan?
According to the Indian Express news about RBI’s released data, “the credit outstanding for the personal loan category increased by 12.1% from Rs 26.1 lakh crore approx in September 2020 to Rs 29.19 lakh crore approx in September 2021.” The statistics show that personal loan requirements are more than before.
A personal loan is there to cover all your expenses. The demand is rising since many financial institutions offer personal loans with just a click. Data presented by the Times of India shows how India’s loan market is driven by the young generation, who quickly opt for online loans due to convenience.
Here are some interesting factors that you should keep in mind before taking a personal loan:
- Personal loan can be taken for any personal use, and there is no restriction on its end use.
- Personal loans can be secured by collateral or unsecured, which means getting a loan without collateral is possible.
- A personal loan is an excellent way of consolidating existing debts.
- With the help of a personal loan, it is possible to consolidate an unsecured loan easily.
- Applying for a personal loan is easy using online and offline platforms.
- Documents required for a personal loan are minimal.
- The interest rates on personal loans vary.
- Your credit score or CIBIL score is crucial in determining the interest rate.
Though avail a personal loan is simpler than other types of loans, there are some qualification criteria that a person must meet.
Here is a basic guideline to follow to understand if you are qualified for a personal loan or not:
#1 Estimated Requirements
Estimating the amount is often an ignored step, but you need to assess your loan requirements before applying for a loan. You need to go through your current financial situation, your existing debts, your need for extra money, and its purpose to understand how much loan you need. One thing to keep in mind is that you will have to pay an additional interest rate, and you should also be able to afford the monthly EMIs.
Once you have sorted these out, getting a personal loan is possible within 24 hours through new-age financial institutions like Clix Capital that offer instant personal loans online!
#2 Have a Look at Your CIBIL Score
Your credit score will be the main deciding factor for the interest rate applied to your loan. It can also impact your eligibility to get a loan. Here are answers to some of the most common questions regarding your creditworthiness.
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What is a CIBIL Score?
A CIBIL score is a compiled value for your entire financial pattern. CIBIL is an abbreviated form of the Credit Information Bureau (India) Limited, and the report they produce is known as the CIBIL score. It is also known as a Credit Information Report (CIR). A CIBIL score is a number typically ranging between 300 and 900. The higher the value, the better the chances of getting a loan quickly. A low CIBIL score can also impact the interest rate.
It is a cumulative study of your past credit behaviors, such as loan payments, EMI payments, credit card bill payments, and similar expenditures.
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How much is the CIBIL score required for a personal loan?
Generally, a high above 700 is considered a perfect score to get a loan with low-interest rates quickly. Financial institutions nowadays allow you to Check Your Credit Score for FREE. Your credit score is emailed to you within seconds after filling out some basic information about yourself.
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How to Improve your CIBIL Score?
A good CIBIL score can be maintained by ensuring timely payments. A CIR is affected by many factors, including not repaying loans timely, exceeding credit limits, multiple ongoing loans, etc. You can easily maintain a decent CIBIL score by considering these factors.
#3 Choosing the Right product
Some of the most preferred financial institutions offer various personal loans.
- Travel Loan
- Education Loan
- Wedding Loan
- Medical Emergency Loan
- Home Renovation/Expansion Loan
- Debt Consolidation Loan
You can choose from these loans based on your loan requirements.
#4 Documents Required for Personal Loan
There are some essential documents required for a personal loan to confirm your identity, address, etc. For any secured or unsecured loan, you must provide some essential documents.
- Proof of identity
- Age proof
- Address proof
- Proof of monthly income
- Correctly filled up the form
- Recent photo
With an online loan application facility offered by top lenders, you can upload the documents after checking your eligibility. Apart from that, you can also get an estimation of the EMI with their Personal Loan EMI Calculator.
#5 Check for Pre-approved Loans
Many lenders and financial institutions offer pre-approved loans without much hassle. They require minimum documentation to sanction a loan within seconds.
One such loan is Personal Loan for Medical Emergency. You can check your eligibility on the lender’s website and apply quickly. This is a pre-approved loan, sanctioned within 24 hours. With customized repayment options, such loans are offered between 1 and 10 Lakhs for medical emergency loans. This loan does not require any address or income proof.
These are some things to consider before applying for a personal loan. While personal loans are easy, convenient, and collateral-free, the basic requirements should be fulfilled to qualify on the lender’s parameters.