Ten Steps That You Need To Follow While Applying For A Personal Loan

A personal loan is a loan that is taken for personal reasons, such as for the purchase of a car, a home repair, or to consolidate debts. However, there are several factors that banks consider when considering your application for a personal loan, so let's learn more about those factors below.  About personal loan. It is an unsecured loan that can be used to get funds during tough times. You can avail of this facility at various banks, financial institutions and NBFCs across the nation. Customers get the flexibility to use the funds for various purposes like debt consolidation, wedding, vacation, house renovation, miscellaneous expenses.

Borrowers have to repay the principal amount borrowed within the loan tenure. However, they get the flexibility to choose a repayment structure and tenure according to their expense, budget and income. So they can calculate all the expenses beforehand and then choose a repayment structure according to their capacity and requirement.

For a personal loan facility is a cakewalk. But there are some factors and SBI personal loan eligibility that should be kept in mind while applying for this loan facility. 

We've listed the top ten steps that should be followed while applying for a Personal Loan -

1. Choose a lender carefully:

Do not pick the first option available. Even if your personal bank is offering you this loan facility at a reasonable rate, you should still compare all the options that are available in the market. A lot of loan financial helplines help customers to compare various loan options so that you can get all the information from them. If possible, then wait for some seasonal or festive offers as they are always doing the rounds. A little patience can yield excellent results.

2. Second step:

Use a personal loan EMI Calculator. There are various online tools like the EMI calculator personal loan. You can use these tools to determine your payment structure and tenure. These tools can help you to calculate your expenses beforehand, so it will be easier for you to choose a tenure and structure according to your repayment capacity and requirement.

3. Compare and calculate interest rates:

A number of banks provide personal loan facilities. So the interest rate usually differs from one bank to another. Therefore it's important to compare all the banks and then choose an ideal lender that will provide you with this loan facility at a low interest rate.

4. Don't Fall for gimmicks like 0% interest rate:

There are a lot of banks that will provide you with a personal loan facility at a 0% interest rate. But these kinds of offers are usually a big scam. Because they will charge you a considerable processing fee and other charges.

5. Check all the charges beforehand:

There are a number of charges that will be charged by the bank. And a lot of banks hide their hidden charges under the terms and conditions section. Still, customers have the right to be aware of all the charges beforehand.

6. Repay your loan amount on time:

Missing even a single instalment can affect your credit score negatively. And in case the borrower can't repay the loan amount, then their credit score will decrease. This will leave an impact for at least six years in their credit report. So repay your loan amount on time.

7. Confirm the foreclosure charges:

There are a lot of banks that will offer you the prepayment facility for six months without any foreclosure charges. So it's important to compare all the banks and then choose a bank that will provide these kinds of facilities.

8. You should not apply to multiple lenders:

Don't approach multiple lenders at the same time. This can portray you as a credit greedy individual.

9.Provide all the information: 

When you are applying for this loan facility, you have to fill the application form and attach some essential KYC documents. So attach all the documents required by the bank.

10. Maintain a decent credit score:

It is essential to maintain a decent or a good credit score to get your loan application approved. For this, you will have to pay all our EMI on time.

Must Read:- How Do You Get A Personal Loan?