Getting a personal loan from traditional sources in India remains a long drawn procedure, and the industry hasn’t evolved to serve the borrower the way it should. Fortunately, some other help is on its way. Before we get to it, though, let’s try and understand some of the most common problems that are faced by loan borrowers in India.
1. Rejection of the First Stage of Application Process
Most loan borrowers do not even pass the first stage of loan verification. They get rejected based on basic eligibility criteria like age, income, poor-bank verifications or even proof-documents that may not satisfy the lender’s requirements. One way of avoiding rejection is to make sure that the loan eligibility requirements of lending banks have been carefully read and followed accurately.
2. Credit Score
Your credit score holds a lot of importance, and it is truly an honest reflection of your financial health, whether it is good or bad. This is one thing, no lender compromises upon and it is extremely for a borrower to have a good credit score as lenders verify the creditworthiness before lending. No bank will invest in someone if they are unsure of the person’s capability to repay the loan with interest. Before you apply for a loan, check your CIBIL score regularly and if you have a low score, find ways of improving it. This will work in your favour whenever you finally decide to apply for a personal loan.
3. Regular Source of Income
Financial stability is highly valued when it comes to providing you with a loan. If you switch jobs frequently or do freelance work which is volatile, there are high chances that your loan application will get rejected. No lender would lend money to an individual who doesn’t have a regular source of income that is sufficient enough to pay the basic EMI for the personal loan. While processing your loan application, one of the required criteria for eligibility is to have a regular source of income through a job or business. If your income is lower than the lenders set criteria or if it is volatile, the chances of you getting a Personal Loan can drop.
4. Enormous Paperwork
A voluminous amount of documentation is involved in the process of borrowing a loan. This can be tedious for many borrowers – as it is a comprehensive process which needs a cautious assessment of many documents. However, all the paperwork that goes into the process is not only inevitable but also essential to avoid any future troubles. The best method to go about the paperwork process is to make a check-list of all the required documents before submitting it to the bank.
5. Hidden Charges
Most people tend to ignore the charges over and above the interest rate. You mustn’t. In reality, these charges can become a hefty sum. Some fees that are not mentioned out rightly are as follows:
- Fines on missed installments
- Charges on pre-payment
- Charges on pre-closure
- Transactional fees
Personal Loan Eligibility
The specified criteria for personal loans may vary from lender to lender. Given below is the eligibility criteria:
- The borrower needs to be between the ages of 23 and 55 years
- The applicant needs to be working with a private, multinational company (MNC) or public company
- The applicant should have an Indian citizenship
- The applicant’s salary should be in between INR 25,000 and INR 35,000
Personal loan EMI Calculator
Personal loans have a fixed repayment tenure on loans with monthly repayments known as EMI (equated monthly instalments) that need to be made over the entire loan tenure. EMI calculator is a tool that helps you calculate your loan EMI based on some critical data such as the amount borrowed, the interest rate applicable to the loan and tenure. You can use the personal loan EMI calculator free of charge any time of the day and an unlimited number of times to calculate personal loan EMI that fits into your budget. You also apply for a personal loan using the personal loan app in quick and easy steps.