How to Get a Personal Loan?
Banks and other financial institutions provide a variety of loans to meet different needs. Technology has enabled the loan application process to expedite and advance over time. As a result, people may now have easy access to loans.
The Personal Loan is the most popular loan product in India's debt market. In India, more than 78% of credit requests fit this description. Many prospective borrowers pick these loans because they are unsecured.
A personal loan is a sum of money you borrow from a local bank, a lender online or your credit union. Following receipt of the funds, you begin repaying the lender by a schedule until the loan is paid off in full.
Now, if you might be wondering how to get a personal loan from a bank this blog may be for you!
In this blog, we have provided a step-by-step guide on how to apply for a personal loan online as well as offline, so read on to know more.
Factors To Consider Before Choosing a Personal Loan
Documentation
To avail of Personal Loans, individuals must submit several documents like income statements, bank statements, and ITR returns.
Interest
Interests are on the higher side. It varies between 10-22% and is set according to the applicant's profile.
Tenure
The repayment tenure of Personal Loans is longer. It generally varies between 1-5 years for most of the lenders.
Loan Amount.
The loan amount in the case of Personal Loans can be pretty high. It is dependent on one's credit history and income profile.
Funds Disbursement
Funds are provided in a lump sum manner. The lender directly transfers the funds to a borrower's account.
Charges
Banks levy different fees like processing fees, late fees, etc.
Qualifications for a Personal Loan for Various Candidates
| Salaried | Self-Employed |
Age Criteria | 18-60 Years | 21-65 Years |
Minimum Income | ₹ 15, 000 per month (may vary) | ₹ 15 Lakhs p.a. (may vary) |
Credit Score | Ideally 750+ | Ideally 750+ |
Work Continuity | 1 Year | 2 Years |
Documents Required for a Personal Loan Application
As you apply for a loan, various loan providers may request additional documents from you. To apply for a loan, you will typically need at least four documents:
- Identity documentation (copy of passport, voter ID card, license, or Aadhaar)
- Address verification (copies of passport, voter ID, driver's license, or Aadhaar)
- A bank statement for the last three months, like a passbook of the previous 6 months
- Two latest salary slips/current dated salary certificates with the latest Form 16
How to Get a Loan from the Bank - Steps for Online Personal Loan Application
A personal loan is an example of an unsecured loan since it doesn't require any security or collateral. A personal loan can cover any personal expense, but unlike a car loan or a mortgage, it has a flexible end-use.
Compared to other loans, applying for a personal loan is easier because the banks don't need to check the specifics of any collateral or security.
Additionally, the online application and minimal paperwork requirements have made the entire process more approachable and straightforward. So, if you're wondering how to get a personal loan online, this section is for you.
Step 1: Online Personal Loan Application
Sign in to your preferred and reliable mobile or online banking app to apply for a personal loan online.
Step 2: Application Form
To access the online application form, click "Apply Online." Then, fill out the form's fields and enter the OTP that will be sent to your phone.
Step 3: Upload Documents
By uploading the supporting documents, finish the personal loan verification process.
Step 4: Entering Vital Information
Select the loan amount you want to borrow after entering your KYC and income information.
Step 5: Submit Application
Submit your completed loan application.
Step 6: Loan Approval
After you pass the eligibility check, your request for an online loan will be approved.
After completing these steps, a bank representative will typically call you to further update you on the loan approval and the subsequent transfer of the loan amount.
Offline Personal Loan Application
This section is specifically for you if you're wondering how to apply for a personal loan offline. The following are some of the offline loan application methods-
Option 1: In-person
You can go to a branch of the bank where you want to get a personal loan. A completed application form must be submitted with all necessary supporting documentation.
Option 2: Through an Agent
Agents handle personal loan sales for banks. If you need advice, these agents are beneficial. They do receive a commission, though, which may have a minor effect on your interest rate.
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Conclusion
A personal loan can help you with various needs, including paying for medical expenses, a wedding, a vacation, or purchasing consumer durables. Still, it's important to borrow only what you can afford to repay.
To ensure efficient processing, approval, and disbursement, all authentic documents must be submitted, and all information must be correctly filled out. We hope this blog will help you learn more about personal loans and the application process.