Life is full of uncertainties; no one knows what will happen in the next step. Sometimes your life is full of happiness and sometimes it is full of sorrows. You never know when a tough time can arrive, and that too in different ways such as due to some medical emergency, urgent house repair, financing your child’s higher education, or financing a wedding. Innumerous reasons, but at the end all reasons end up with only one solution that is financial requirement. For dealing with these entire problems one should have the access of a good amount of finances or a healthy savings. This is where personal loan makes an entry in solving your problems.
Personal loan has been in rising demand in the financial market. It is considered as the best source of credit. It is an unsecured loan, and it comes with the benefit of not providing any collateral as a security to the lending institution where the applicant is applying for a personal loan.
What makes a personal loan a notable option to avail?
There are many reasons for satisfying the above asked question. Firstly, a personal loans, unlike other loans like home loan, business loan, or loan against property is a multipurpose/ multifunctional loan. This states that you can use it for any reason, and that it is not stuck with only reason like home loan, or business loan. The other benefit of a personal loan is that the whole process starting from applying for a personal loan to getting an approval of a personal loan to getting the loan amount disbursed is very easy and is a streamlined process.
Due to digitalization, availing a personal loan has been made more easy and convenient, as one can now either apply through website of a specific lender or through the mobile application. Secondly, it saves a lot of time and energy of the applicant as you can apply it from anywhere, without making any bank visits. This the main reason for its popularity. Also, the other benefit is of the minimal documentation. Times have gone, when you had to provide bile of documents to the lender, now with just your KYC details/documents and your income proof you get the benefit of getting your loan sanctioned.
How can you become eligible for a personal loan?
To avail the entitlements of a personal loan, one should be eligible for it. As personal loan is an unsecured loan, due to which the risk is all the lender gets. Unlike other loans like home loan, or loan against property or a gold loan where either a property or gold is kept as collateral in case of a default payment then the bank can take over the possession of these assets. Due to which the main eligibility criteria in a personal loan is your credit score. Cibil or credit score above 750 is considered as a good and a healthy score. So make sure you have a healthy cibil score, as it assures that the applicant has not defaulted in any of his earlier repayment history. This doesn’t mean that applicants with a low cibil score can’t avail a personal loan, they can but there are chances that the rate of interest might get a bit high.
What will the rate interest one needs to repay?
The rate of interest varies from a lender to a lender. But the basic interest starts from 10.99% and can reach up to 30%. . The interest rate which is going to be imposed on the applicant depends on the lender as well as the credit score of the applicant.