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FAQ

A personal loan is an unsecured loan that lets you gather funds for your personal needs. Unsecured loans are that you can avail of without any collateral. You can utilize personal loans for different financial needs, including weddings, travel, paying off your credit card bills, etc. The loan is sanctioned at the earliest without complex formalities. However, your credit score plays an important role in your loan application approval and the interest rate offered by the bank. As in, if you have a good credit score (750 and above), most chance you would get preferential rates or a higher loan amount.

If you are in need of immediate credit, the first thing you need to do is submit a personal loan application form along with applicable documents to the lender which is then verified and approved. After this, the loan amount is disbursed into your bank account. Upon receiving the loan amount, you are required to repay the lender through EMIs (Equated monthly instalments) over the course of the loan repayment tenure.

A personal loan, if used judiciously, can also prove to be advantageous for improving your credit score.

Before you apply for a personal loan online, you should know about the different factors that impact your eligibility for a personal loan. These include:

  • Geographic location: The area where you live plays an important role in determining your eligibility for a personal loan.
  • Existing credit: If you are already repaying other loans your eligibility for a new loan will be affected.
  • Housing situation: If you live in your own house, you have an increased chance of getting your personal loan application approved. This is because if you reside in a rental house, it reduces your disposable income, which will lead to lower eligibility of Personal loan.
  • Income: The higher a person’s income, the higher is the loan amount they are eligible for. So, it may be said that your PL also depends on your income.
  • Organization: Another determining factor in your personal loan eligibility is the company for which you work. Working for a well-known company that holds a good reputation in the market ensures that you have a stable job.
  • Credit history: Your credit history and credit score have the largest impact on your personal loan eligibility. The tenure, the interest rate, and the total loan amount that you can borrow will depend on this.

If individuals want to improve their eligibility for personal loans, they should pay their loan EMIs and credit card dues on time and in full, decrease their existing debt, minimizing credit utilization, and so on.

There are multiple ways for you to pay your personal loan EMI. Here is a list of options for personal loan payment: –

  • Via mobile app
  • Virtual account via your Net banking
  • UPI apps

Easy Monthly Installments (EMI) refer to the monthly payments made by the borrower to the lender. Personal loan EMI is paid against both the principal and interest amount