With the advent of technology and increased competition in the banking and lending sectors, personal loans have become available easily in the market. In addition, you can now get a loan sanctioned within 12-72 hours from the date of application.
However, a bank loan is a financial obligation and requires accountability at every stage, from loan application to payment. Therefore, we have put together a step-by-step process that you must follow while applying for your first personal loan.
Simple Steps On How To Apply Personal Loan
We all want to live life to the fullest. Who doesn’t want to travel abroad, have a lavish wedding, and have the best education? However, sky-high prices often prevent us from fulfilling our dreams. But nowadays, you can easily finance anything with a personal loan.
These loans are unsecured, which means that you do not need to pledge any collateral when applying for them. In addition, nowadays lending institutions allow you to apply for a personal loan online, which makes the whole process extremely convenient. With new digitization techniques, you can apply for loans online, choose the right option and upload documents without any hassle. If you are planning on applying for a personal loan, here are 5 steps to help you do that.
Step 1: Check Your Eligibility and Requirements
The first and most important step in applying for personal loan is identifying your monetary requirements. The amount required as well as the interest rate on personal loans will vary for weddings, travel, education, or home renovations. Estimate how much you need to avoid getting too much debt. Next, check if you are eligible for personal finance from your chosen lender. Selection criteria usually include credit rating, monthly income, age, etc.
Step 2: Completing Application
The lender will provide you with a form asking you to provide your data (e.g. age, address), financial and employee data such as monthly income, place of work, etc. This can be done both online and offline.
Step 3: Determine the required loan amount
Take a close look at how much you want to cover with your loan amount. Come up with a reasonable amount that you will need to borrow from a bank of your choice. Please note that the amount should not be excessively high, as it may be too onerous to pay. At the same time, it should not be too low, otherwise, it may not meet your financial needs.
Step 4: Documentation
To determine if you are eligible for a personal loan, several documents are required, such as ID, proof of residency, certificate of employment, and income documents. The required documents may differ from one financial institution to another.
Step 5: Application Approval
Regardless of whether you are applying for personal or professional reasons, lenders will only approve your application after the details have been verified. They will then transfer the amount, if sanctioned, to your account within 3-5 business days. Knowing these steps on how to apply personal loan, you are ready to avail your first personal loan. However, never forget to plan your loan payments before applying. It is important to ensure timely payment of each EMI without fail.