How To Apply For A Personal Loan: First-Time Applicant’s Guide

06 Jul How To Apply For A Personal Loan: First-Time Applicant’s Guide

Who doesn’t like extra cash? Especially if it can help you fulfill your dreams. Human life is surrounded with the uncertainty of unforeseen, which can include anything from medical expenses to car repairs or any other pleasure based expense which can create a huge dent on your financial stability. Here Personal Loans, come to our rescue, acting as a backbone for our financial needs. Thanks to modern day financing we can fulfill all our dreams from purchasing a new home or getting into our dream college, without any hassle. Banking has changed the way lenders and borrowers exchange money. Today it has become an organized financing institute where anyone can apply for Personal Loan in India if he/she has a solid creditworthiness.

Steps To Follow While Applying For a Personal Loan for the First Time

  1.  Research All Banks : 

Ensure to do a thorough research of all the exclusive deals and offers provided by each bank near your area. You can use each bank’s helpline services or online website to solve all your questions and queries regarding their loaning policies. Some banks in the country don’t offer secured loan services for short term loans, so ensure to confirm these small details with your potential financier before selecting any bank. Ensure to compare interest rates and time limits, including others factors, to have a smooth and comforting loan experience.

  1. Register a Loan Request :

Now that you have researched every potential bank and have decided which one you want to opt for. Go, to their website or their branch and fill and submit a loan application in that bank. It is always recommended that the applicant go through their website or have a work with bank manager before submitting the application so that he/she can make sure that he has all the documents which are required while requesting for a loan

Documents required while applying for Personal Loan

  • Identity Proof – Passport / PAN Card / Driving License / Voters ID (any one)
  • Proof of Residence – Leave & License Agreement / Utility Bill (only 3 months old) / Passport (anyone).
  • 3 months Statement of Bank (with salary or income credited transaction).
  • Salary slips of last 3 months.
  • 2 Passport Size photographs.

List of documents for Self-Employed

           KYC Documents : Identity Proof; Address proof; DOB proof.

  • Proof of Residence – Leave & License Agreement / Utility Bill (only 3 months old) / Passport (anyone).
  • Income proof (audited financial report of last two years).
  • Latest 6 months Bank statement.
  • Office address proof.
  • Proof of residence or office ownership.
  • Proof of continuity of business.

How To Apply For A Personal Loan: First-Time Applicant’s Guide

  1. Verification : 

Once an applicant has registered his/her loan application and other documents with the bank, they will start verifying these details, to check your financial creditworthiness of the applicant. They run down a personal research on the user, which will include calculating all your assets and liabilities in order to ensure, that they will be able to get the full repayment of the amount that they will be investing in you.

Most banks in the country also check the Credit score of the individual to calculate all the credit that the applicant has taken from the market. This can include a week or two, depending on the information that you have provided the bank. Applicants can also check their credit score online. A perfect credit score lies in between 300 to 850 score. A Higher credit score represents higher financial trustworthiness.

  1. Make a checklist : 

This is amongst the most important step which people usually avoid and later get confused in the future. Always makes sure to make a list of all the documents that you are submitting with the bank, in order to take them back once you repay the loan. Keep your original document organized in a single file. In case you are opting for a secured loan, secure to make a list of all the assets or property documents that you are putting as a security against your loan. Avoid making any rush decisions, as it might end up in losing some of these important documents.

  1. Hidden Loan Charges : 

When we think about repaying the loan, we only think about the Principal amount of the loan and the interest that it put on that amount. But some banks are known for adding multiple hidden charges on loans, depending on the service that they are providing so ensure to talk about all these charges with your bank officers. Also make sure to select an EMI amount which doesn’t affect your monthly lifestyle, by don’t stretch the loan life, as it will just add on to your interest. Customers might enjoy paying less monthly as EMI, but they ended by paying double interest in that duration.

  1. Loan Sanction :

Once the loan is passed by the bank the amount is transferred or given to the applicant. The EMI of the loan automatically starts as soon as the loan is dispersed.

Conclusion

Just follow these steps and ensure to keep all your documents ready within reach before applying for a personal loan. Always remember that it’s better if you solve all your queries confusions before getting into the long term agreement.

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