5 Best Reasons to Apply For a Personal Loan

A personal loan is an unsecured form of financing option available to an individual for meeting out their personal needs, wishes or requirements. It is available to both salaried and self-employed professionals. One needs to have a good financial standing in order to apply for a personal loan. The loan is often extended to meet certain requirements of an individual such as wedding expenses, funding of child’s education, financing new business, funding for a medical emergency, debt consolidation, paying credit card bills, improving credit score and much more. One needs to have a CIBIL score of 700 or more in order to be Eligible for the Personal Loan. The rate of interest is relatively higher as against other secured loans such as car loans, home loans, business loans, mortgage loans. Now, take a look at the 5 best reasons where one can apply for a personal loan.

To pay for personal expenses such as Wedding expenses

Since weddings are a lavish affair, where one requires enormous funds to manage unanticipated wedding-related expenses. Personal loans are appropriate to obtain in such cases rather than exhausting your hard-earned savings. You are required to ascertain the personal loan amount and assess your eligibility for Personal loan with the choice of the lender you want to go with. You can also use the Personal Loan Eligibility Calculator to determine your eligibility criteria.

Improving your Credit Score

Credit score plays a crucial role at the time of applying for a personal loan, especially when it is related to loans and credit cards. If you do not have a good credit score, a personal loan could help you with it. Many people apply for small personal loans to improve their credit score by making repayments of loans on or before time to generate a good payment history. It will show your creditworthiness in the eyes of your lender. When you are regular in paying your loan in time will not only increase your credit score but make you eligible to apply for a higher loan amount in the future.

Financing new business

Insufficient funds can obstruct your dream of commencing a new business. You can make use of personal loans in order to start your business. A personal loan gives you the flexibility of using the money as per your choice. Whether it is hiring a new place for setting up your office, buying machines, paying wages or salaries, paying to your suppliers, etc — you need personal loans. In contrast, you can Apply for a Business Loan, for that you need to justify your financial history and produce tax-related documents that are not possible for a new business. So, a personal loan would come handy and it’s the most profitable option to apply at the best personal loan interest rate.

Funding for a medical emergency

Unexpected medical emergencies can prevail at any point in time where you need to have immediate funds at hand for meeting out the medical expenses. There might be a possibility that the health insurance cover you choose does not cover specific treatments. Applying for a personal loan in such instances would be a good option for you to get instant access to funds in less time.

Debt consolidation

This is one of the most obvious reasons to apply for a personal loan. If you have obtained multiple loans(such as home loan, car loan, etc) from varied lenders, keeping a track of all these loans can be difficult and confusing because of different interest rates and its payment dates and multiple EMIs. Skipping any one EMI payment could impact your CIBIL score adversely. This is when the personal loan comes into account where you can perfectly consolidate your multiple debts into one and suitably balance all your finances.

Personal Loan with Interest Rate

Banks or NBFCs offer Personal Loans at Affordable Interest Rates to both salaried class and self-employed professionals. One can apply after checking their eligibility criteria and submitting the documents. Some of the personal loans for which you can go for are as below:

• ICICI Bank Personal Loan: These loans are offered at the interest rate that ranges between 11.25% — 18%
• HDFC Bank Personal Loan: Interest rates offered on HDFC Bank Personal loan ranges between 10.75% — 14.99%
• Yes Bank Personal Loan: 10.85% rate of interest is offered on Yes Bank Personal loan.
• Kotak Mahindra Bank Personal Loan: 10.85% rate of interest is offered on Kotak Mahindra Bank Personal loan.
• Citibank Personal Loan: 11.25 % rate of interest is provided on Citibank Personal loan.

Documents Required

Applying for a personal loan requires you to identify a credible bank/NBFC that takes you to a simplified application process. However, the application process may vary; the documents required are primarily the same for all lenders. You need to provide the following documents:

• Identity proof: Passport / Driving License / Voters ID / PAN Card (any one)
• Address proof: Leave and License Agreement / Utility Bill (not beyond 3 months) / Passport (any one).
• Bank statement of at least three months
• Salary slip
• 2 passport size photographs

How to Apply Online for Personal Loan?

Applying online for a personal loan is a hassle-free procedure which provides you the flexibility to check your eligibility and apply with the bank or NBFC. You need to follow the simple steps:

• Check your eligibility online using the eligibility calculator within a minute at the bank/NBFC portal.
• Once your eligibility criteria get fulfilled, submit your documents on the portal.
• After submission and verification checks, get direct disbursement of funds in your account within 10 seconds. Other customers can get disbursement of personal loan within 4 hours.

In this manner, you will obtain a personal loan amount in just one working day of your document submission and verification checks.

Conclusion

If you have got the documents handy, you can consider applying for a personal loan that gets approved in just a few clicks. You can use the Personal Loan EMI Calculator to obtain prior information of the monthly outgo before obtaining a Personal loan. With sufficient knowledge of the financial knowledge beforehand can help you make informed decision that can be of immense help in maintaining a credit discipline throughout the loan tenure.