Want to give your living room a makeover, but that boucle fabric couch you saw online is so expensive! What to do?
You can get a Personal Loan for financial needs like travel, festivals, medical emergencies, and home renovation. The loan is best to fulfil your needs when you don’t have enough savings in your account or don’t want to use them for that purpose. Depending on your eligibility, you can get a Personal Loan, and that too without any collateral.
Since Personal Loans have higher interest rates, you should think of them after thoroughly understanding all the factors and after in-depth consideration. Let’s talk about the process of getting a Personal Loan and the crucial things you should know to make an informed decision.
What is a Personal Loan?
A Personal Loan is an unsecured loan that can be used for managing unplanned expenses. Whether medical bills, travel expenses, or wedding ceremonies, you can apply for a Personal Loan and take care of things smoothly.
Unlike a vehicle loan, business loan, or home loan, you don’t need collateral to apply for a Personal Loan. That’s why Personal Loan rates are usually higher.
What Are the Benefits of Taking a Personal Loan?
Salaried individuals with a strict monthly budget can manage unplanned expenses by applying for Personal Loans. These loans act as a financial cushion and help meet needs.
Most people use their credit cards to manage their monthly expenses and repay the outstanding amount in the next billing cycle. If they fail to pay the bills on time, they have to interest at rates that are generally very high. Compared to credit card interest rates, Personal Loans are affordable and should be given priority for bigger expenses like vacation, renovation, or medical emergencies.
Is There Any Downside to Getting a Personal Loan?
Your credit score impacts your eligibility to get a Personal Loan. Some might consider it a limitation that individuals with a lower credit score are not eligible for a Personal Loan.
Personal Loan rates are higher than secured loans like Vehicle and Home Loans. However, it is not a limitation when you know the right place to get a Personal Loan. Some banks offer loans at a lower rate. All you need is to find such banks and meet your financial needs.
Who is Eligible to Get a Personal Loan?
There are two basic eligibility requirements to get a Personal Loan. Your age should be between 21 and 58 years. Secondly, your credit score should be on the higher side. A score of 750 or above is preferable. CIBIL score is a three-digit number that shows your creditworthiness as a borrower.
Individuals with more than two years of work experience are eligible to get a Personal Loan. Moreover, the minimum salary requirement is Rs. 30,000 ( depends on the city of the lender). The eligibility criteria for self-employed individuals are a bit different. A self-employed aged between 21-65 can apply for a Personal Loan, the minimum age for a doctor is 25 years. You can learn more about the criteria by clicking here.
How to Apply for a Personal Loan?
Before applying for a Personal Loan, compare different banks and find a lender that offers rates and terms best suited to your needs. It is ideal to confirm your eligibility before applying. It ensures that your chances of getting your loan application approved are high. Collect information about the required documents beforehand so that the loan approval process speeds up.
Now that you have everything ready, you can apply by filling out an application form. For instance, you can apply online to get a Personal Loan from ICICI Bank. Visit the website, select the loan amount and tenure, fill in the basic details, and submit all the required documents.
ICICI Bank also has pre-approved offers for select customers for Personal Loans, and with this, loan approval and disbursement can be done almost instantly.
What Are the Documents Required for a Personal Loan?
The following documents are required to apply for a Personal Loan:
- KYC documents: ID proof, address proof, and Date of Birth (DOB) proof.
- Income proof
- Proof of residence
- Address proof of the office
- Latest 6-month bank statements
- Last 3-month salary slips (salaried individuals)
- Last two years audited financials (self-employed individuals)
This is not an exhaustive list. A bank may ask for other documents as well.
How Long Do Personal Loans Take to Process?
Personal Loans are unsecured loans with no collateral. Therefore, the approval process is relatively quick. There is no exact time within which a loan is approved. It may vary from bank to bank.
Which Bank Provides the Best Personal Loan?
Personal Loans are great to meet your financial needs. It is important to make an informed decision and save yourself from paying a higher interest amount. Compare options based on the interest rate, tenure, processing fee, and minimum income requirements.
Apart from a competitive interest rate, it is important to choose a bank with a quick and simple Personal Loan process. You may consider getting a Personal Loan from ICICI Bank, which has no hidden costs and has an ethical policy for the approval of Personal Loans.
Final words
A Personal Loan is a valuable financial tool to meet urgent needs. Personal Loan rates are lower than credit card interest rates. The quick and simple approval process makes them a popular choice for salaried and self-employed individuals. When you get a Personal Loan, compare different options based on the interest rates, but don’t forget to compare the tenure, processing fee, or hidden costs.
