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PERSONAL LOANS - AN INSIGHT


The main factors for personal loan eligibility are:

  • Income level 
  • CIBIL Score
  • Credit history
  • Repayment capacity
  • Employment history
  • Age
Because personal loan is an unsecured loan; hence the individual is not asked to put up collateral/or any valuable asset to avail this loan. Since the personal loan has a greater risk at the lender's side, the interest rate of personal loans are usually high when compared to other loans.

Maximum Personal Loan Amount Gets Disbursed?

Important factor determining your loan amount

  • Your Income
  • Your Credit Score
  • Repayment capability
  • Age
It will also help if you can boost your credit score before applying. Credit Score have a huge impact not only on your "Personal Loan Approvals" but also on the interest rates lenders charge

Documents Required For Personal Loans?

Though the documentation requirements of personal loans vary from one financial institution  to another, some of the key documents that you would need to provide with your personal loan application include:

  • Income proof - Salary slip or ITR copy
  • Address proof documents
  • Photo identity proof documents
How many Personal Loans Can You Have at Once?

Lenders as well as banks of India have their own set of rules when it comes to lending unsecured loans to the individuals. There are banks as well as private fintech companies which approves 2nd personal loan even if the earlier one is still going on. Qualifying for the 2nd loan with one existing completely depends on your credibility, repayment capacity and income. 

For example, a private bank may not qualify your personal loan application since; you have one already have more than one loan going on. But a bank like SBI is offering the same to its bank holders . The example was just for an easy understanding hence purely coincidental.

When Is The Right Time To Borrow A Personal Loan?

Some situations lend themselves in borrowing the loans. Also, you can use this loan to pay for anything you want, unlike student, auto or mortgage loans. Here are some effective ways to use the loan for personal reasons: 
  • Pay off high-interest credit card debt: When you have a lot of high-interest credit card debt, it might be a good choice to take advantage of unsecured loan to pay it off.
  • Consolidate debts: Consolidating your debts is a bit different from paying off your high-interest debt. Regardless of your other loan interest, you could use a personal loan to pay them all off. That would likely make it easier for you to manage your bills, and you'd have lower monthly payments.
  • Pay for something you need: For instance, you need to take a professional course and you don't have enough cash to pay the fees or you need money to pay for medical expenses, wedding expenses, education fees etc.

 

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