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Tuesday, March 05, 2024

How to Choose the Best Personal Loan for You?

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If you are a salaried employee, then your monthly salary is fixed but your expenses are not. You might have to host a promotion party or your wedding anniversary, avail a great travel deal or repair your home appliances. As such, you might need a lump sum amount that exceeds your monthly budget. An instant cash loan is one of the best and most convenient ways to secure quick cash for such times.Salaried employees can also avail an advanced salary loan.

A salary loan is exclulsively offered to salaried employees where they get a line of credit or salary up to 2.5 times of their net salary. These loans are usually offered by the bank for a tenure of 3 to 12 months and can be repaid through equated monthly instalments.

But before availing a personal loan you must know the crucial factors that you must consider while selecting your personal loan. Read on to discover 5 tips to choose the best personal loan.

5 Tips to Choose the Best Personal Loan for You

Here are five suggestions on how to pick the best personal loan to assist you in efficiently meeting your financial obligations:

Check and compare interest rates

The first and foremost tip to choose the best personal loan is to find the loan with lowest interest rate. The interest rate is the charge levied by the lender on your loan. Today, various lenders charge different rates of interest on the loan. You must conduct a thorough research to find the lender offering you the lowest interest rate.

Even a slight change in the interest rate can have a big impact on your total interest payout. The interest rate on a salary loan is usally much affordable. So, make sure to check with different lenders before submitting your loan application.

Check the eligibility criteria

To qualify for an instant cashloan, you must meet specific criteria set forth by the lenders. If you are applying for a salary loan, then you must be a salaried employee at select private limited companies and public sector undertakings. Review the eligibility conditions of various lenders before submitting a loan application. This will assist you in selecting a lender with simple qualifying requirements.

  • You must be a salaried employees at select private limited companies and public sector undertakings.
  • Your age must be between 21 years and 60 years.
  • You must have job experience of at least 2 years and you must be working with your current employer for a minimum of 1 year.
  • You must have a minimum net monthly income of Rs 25,000.

The best financial institutions offering personal loans have simple eligibility criteria. They aim to make loans easy and accessible. You can visit the lender’s website or downloan an instant cash loan app to check the eligibility rules.

Know the documentation procedure

The documentation that the lender requests enable them to confirm your identity and develop confidence in your capacity to repay the loan. The following are the documents that lenders typically need to issue you a personal loan:

  • Identity and age proof such as an Aadhaar card, passport, or driver’s licence.
  • Using a valid Indian passport, a driver’s licence, or a utility bill as proof of residence.
  • Signature proof
  • Current employment and previous employment records.
  • 2 Passport size photo.
  • Income documentation such as pay slips, ITRs, or bank account statements

You must demonstrate to the lender that you have a consistent income stream. For salary loans, you must provide proof your income and employment at a particular organisation. Your salary slips and bank statements are often requested by the lender.

Each lender may have a different list of documents needed for loan acceptance. Therefore, it is wiser to double-check the documentation the lender needs before starting the application process. You can find the list of necessary documents on the lender’s website or app. Pick a lender with minimal documentation so that the application process is simpler.

Select a lender who offers you the necessary loan amount.

A bigger loan amount necessitates a higher CIBIL score. Ask your lender if your current CIBIL score is sufficient to qualify you for the desired loan amount. Your total income is another factor that affects the eligible loan amount. For salary loan, you can acquire a loan of up to 2.5 times of your total net income.

You must check with different lenders to find your loan amount eligibility. This amount depends on your total monthly income, your CIBIL score and your monthly obligations. In case, you have an additional income, such as rental income, income through investments, or side business, then mention it on your loan application. While availing a salary loan, you must also check the minimum loan amount that you can avail.

  • Online loan apps offer you minimum loan amount of Rs. 8000 or even less.
  • The maximum loan amount can go up to Rs. 1 lakh or even more.
  • This minimum and maximum loan amount differs from lender to lender.
  • You can get special loan products for paying children’s school fees, and shopping.

Compare the costs associated with obtaining a loan

Check the processing fees, late payment penalties, loan cancellation fees, and other similar fees imposed by the lender when selecting which loan is best for you. These additional fees can significantly increase the cost of your loan, and if they are considerable, the cost of borrowing money increases.

It is very important to read the fine prints of your loan application. This will help you discover hidden charges or other fees which can increase your loan burden. In addition to that, you must also check if your lender provides the facilities of loan transfer or pre-closure of your loan. You must also note the charges associated with these facilities.

Check the repayment flexibility of your loan

While obtaining a personal loan is easier than ever today, you must check that the lender offers easy repayment options too. Having a simple and flexible repayment facility helps you repay the loan easily. This helps you maintain a high credit score.

Usually most lenders offer a repayment tenure of 6 to 60 months for an instant cash loan. This makes these quick loans highly affordable.In addition to the loan tenure, you must also check the repayment facilities offered by the lender. You must get the option to choose the date scheduled for your EMI. In addition to this, check for pre-closure, loan transfer and loan insurance options offered by the bank.

Conclusion

An instant cash loan is one of the most accessibletypes of loan that you can avail today. If you are a salaried employee, then availing a salary loan can be the best option for you.

One of the most accessible types of loans to obtain is a personal loan. You can acquire funding even if you don’t have any assets or properties to use as security for these loans since there is no collateral requirement.

Several lenders are offering personal loans on the market nowadays. Therefore, you must select the best Indian bank for your needs when applying for a personal loan. Thanks to digital lending apps, an instant cash loan is now simple to obtain. Instant loans are simpler to repay in the allotted time with inexpensive EMIs because they are smaller cash loans.

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