Personal loans have emerged as a quick and convenient means to give wings to your aspirations. Whether you are looking to renovate your home, plan an international trip or a wedding, or even need funds for a health emergency or business expansion, you can rest assured of a speedy loan with minimal documentation. However, whether it is a personal loan for the self-employed or salaried individuals, here are a few pointers to keep in mind, before you begin the application process:
- Go through your credit history: Your credit report is the most important document required for a personal loan approval. As a rule, if your credit score is 750 and above, your loan is more likely to be approved. Paying EMIs and credit card bills on time, ensuring your credit utilization ratio is below 30% and a healthy credit balance mix are some financial habits to adopt to improve your creditworthiness to prospective lenders.
- Analyze loans in the market: Comparison of loans offered by financial institutions, before zeroing upon one can help you get a personal loan at lower interest rates. You can also consider other parameters such as processing charges, loan amount, foreclosure fee, repayment tenures, value-added services, e.t.c while doing your research to finalize the right lender for you as per your requirements.
- Select the right duration: A lender computes your capacity to repay the loan by your existing obligations for debt repayment. A higher accumulated debt increases your chances of defaulting on the loan being taken, in the event of a job loss or any other emergency. Hence, you should choose your loan tenure factoring in your current debt if any as well as your financial needs so that you can pay your EMI on time comfortably.
- Avoid multiple applications: Do not apply for a personal loan to several lenders in a short period. This may only result in the rejection of your application as it diminishes your credit score further. Alternatively, you can visit online financial marketplaces to choose from a personal loan for the self-employed or salaried individuals according to your needs.
- Stick to your employer: Lending institutions prefer borrowers with a steady income. Hence, the practice of switching jobs frequently or leaving an employer without reason or even unemployability for a short period can hamper your chances of getting a loan approved. A stable and well-planned career graph is crucial to acing a personal loan in the future.
Make sure you tick off the checkpoints mentioned above before applying for a personal loan to ensure a smooth experience. While it is not possible to get a personal loan without documents, given that it is an unsecured loan, you can get one with minimum documentation.
When you apply for personal loans available on Finserv MARKETS, you can select a loan amount up to Rs. 25 Lakhs and repay comfortably between 1 to 5 years as per your financial situation. Foreclose your loan early without paying any charges and enjoy attractive interest rates to help you achieve your dreams and life goals.
