Easy Ways to Choose Personal Loan

Personal Loan

A personal loan from any lender, may it be a Navi loan, Axis Bank or State Bank of India, is unsecured in nature, which means you do not need to offer any security or collateral to secure the borrowed loan amount. A personal loan can be availed for maximum proceeds of Rs 25 lakh. These loan types are prudent ways to fund personal goals, afford dream weddings, pay for vacations, or overcome periods of financial mismatches. Moreover, you can also procure a personal loan for debt consolidation and make your EMI repayments easily. Out of the various loan options available, a personal loan generally requires the least documentation. These loans can simply be processed and disbursed. In case of any queries, then, you also have the option to directly approach the lender via call or mail. For instance, if you are looking to avail a personal loan from Navi loan, then you can approach Navi personal loan customer care number for all your queries. 

There are several personal loan lenders present in the market; thus, you can look out for a plethora of personal loan offers. However, it is crucial to make sure that you opt for the best personal loan for yourself by selecting the correct creditor. This would give you the potential to clear the dues easily with zero need to take any unnecessary stress. 

To assist you in mitigating your financial needs with ease, mentioned here are six tips about how to select a suitable personal loan –

Check & compare the rate of interest.

The interest refers to the cost of borrowing the proceeds from lenders. Distinct loan providers offer distinct interest rates. When placing an application for a personal loan, it is necessary that you make the right decision by selecting a bank with the lowest rate of interest. In this way, you can lower the thorough amount that you will require repaying the lender. Do remember that lenders tend to levy distinct rates of interest on their existing bank customers. Thus, if you already hold an excellent banking relationship with a bank, you might want to apply for a loan with them in place of going to a thoroughly new lender. At times, banks offer lower interest rates to employees of reputed companies too. Also, they may run deals on their personal loan offers and other loan types during festive times. Do consider checking all these possible deals before availing of a personal loan. 

Check the eligibility parameter.

Lenders place specific parameters that you must meet to be eligible for the personal loan. Before placing an application for a personal loan, ensure to check the eligibility parameters of distinct lenders. This type of research will assist you in selecting a lender whose eligibility parameters are simple. Best personal loan lenders usually tend to have the easiest and simplest eligibility parameters, hence, making it extremely easy for you to get a personal loan. 

Understand the process involved in documentation

Documents are required by lenders to assist them in authenticating your identity and gaining confidence in your potential to repay the personal loan. The documents generally required by lenders for granting you a loan are – 

∙       Identity proof like your passport, Aadhaar card or driving license

∙       Address proof like your utility bill, driving license or an Indian passport

∙       Income proof like salary slips, bank account statements or ITRs

In case you are a self-employed individual, you must prove to the lender that you have a constant income source. For this, you can provide the lender with your business registration certificate or provide them with your company’s profit loss or balance sheet. 

Documents required for personal loan approval can differ from one lender to another. Hence, it is best to check your required documents before starting your loan application procedure. You can check the list of the required documents either on the website of the lender or by searching the same online. Select a lender who demands minimal documentation so that your loan application process is simple and easy. 

Select a lender who offers you the required loan proceeds

Higher loan proceeds usually require you to have a good credit score. Thus, ensure to ask your lender if the prevailing credit score is sufficient to avail of a good loan deal. The loan proceeds that get approved also depend on your income or salary. Lenders generally permit you to procure a personal loan that is 10 times your income. For instance, if your monthly income is Rs 25,000 and your credit score is 750, you can simply get the loan proceeds of a maximum of Rs 25 lakh. It is necessary for you to check whether you qualify for the loan proceeds you require, or else your application may be rejected. 

Before placing an application for a personal loan, ensure to check the EMI proceeds you would require to pay monthly. You can simply do so by using the online personal loan calculator. Do not allow your monthly EMI repayments to surpass 50 per cent of your GMI (gross monthly income). 

Pick the correct repayment tenure.

A personal loan can generally be availed for a repayment tenure that stretches up to 5 years. However, certain lenders also permit you to avail of a personal loan for as high as 7 years. An extended loan repayment tenure assists you in lowering your monthly EMI repayments; however, it enhances your overall interest payouts. Having a shorter repayment tenure, on the contrary, assists you to become debt free slowly but also enhances your monthly EMI repayment proceed. You can use the online loan EMI calculator to choose the correct tenure that matches your budget.

Compare the fees & charges of availing of the loan

While you decide which personal loan offer is the best to match for you, also ensure to check the processing charges, previous due payment fees, loan cancellation fees and other linked penalties and fees that are charged by the lender. Such ancillary fees can add massively to the overall expense of availing the loan, and if such fees are high, your expense of procuring the loan also goes up considerably.

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