A Quick Guide: 5 Easy Steps To Get A Personal Loan In India
Personal loans are short-term loans that can be used for a wide range of purposes. For example, you could use a personal loan to pay off your debt, fix up your house, or plan the wedding of your dreams. Personal loans are available from banks, credit unions, and online lenders. When you borrow money, you have to pay it back over time, often with interest.
Personal loans in India work the same as how most other loans work. When you want a loan, you fill out the paperwork and send it to the bank. The bank checks your creditworthiness and then gives you a loan. When you say yes, the money will be sent to your bank account and you can use it however you want. Personal loans in India are on the rise because they are becoming more popular and people want them. People can easily take advantage of the many benefits of a personal loan.
Why Should You Acquire a Personal Loan in India?
Personal loans in India have several benefits. You should consider them if you’re trying to decide between a credit card, another type of loan, and a personal loan. It will help you make an informed choice in the long run. Here are the main benefits of personal loans:
- Easily spreads out the cost of a big purchase
A personal loan lets you spread out the cost of a big purchase like a vacation, wedding, or new car over a longer timeframe. This makes it much more affordable. And, it also means you won’t have to cut back on your own finances to pay for it.
- Teaches you to take care of your own money
Personal loans aren’t always used to buy big things. You can also use them to better handle the debt you already have. This comes in the form of a debt consolidation loan. In this loan, you combine several debts, such as those from credit cards, overdrafts, and old loans, into one product. You could save money on interest because you will only pay one rate instead of multiple rates which could add up to a higher total cost.
- No collateral or security is required
By choosing an unsecured personal loan, you avoid the risk that comes with a secured loan which requires you to put up your home or another asset as collateral. This type of borrowing is based only on your credit score. Hence, you do not need to put up anything else as security.
What Are The Different Kinds of Personal Loans in India?
Personal loans are one of the quickest ways to get money. But a lot of us are unfamiliar with the different kinds of personal loans in India. Let’s check them out.
- Short-Term Personal Loan
A short-term personal loan starts at Rs. 1000 and can be paid back to the lender in a few days or months. With this kind of personal loan, the money is added to your account within a few hours and doesn’t require much paperwork.
- Wedding Loan
The goal of this loan is to help families and couples deal with the stress of paying for a wedding. It can be used to pay for big things like the venue, where guests will stay, jewellery, food, decorations, etc. Most of the time, the rates on these loans are higher during the wedding season.
- Travel Loan
This is the kind of loan you should get if you’re planning a trip and want to pay for it without using up your savings or messing up your monthly budget. A travel loan can get you the amount you need faster and at a lower interest rate.
- Agricultural Loan
Farmers can get this type of personal loan in India that will help them buy equipment, tools, and raw materials that they need for farming. This loan has a very low-interest rate, which encourages farmers to make more money with what they do.
- Home Renovation Loan
As time goes on, your home and way of life should change, too. As the name suggests, this loan can help you pay for repairs or improvements to your home. So, if you wanted to fix that leaky ceiling or get wood floors, this loan can help you do that without putting a dent in your savings.
- Medical Loan
A medical loan is a type of personal loan that you use to pay for things like surgery, routine medical procedures, and trips to the emergency room. You can also use a medical loan to pay for high health insurance deductibles or to consolidate medical debt.
Get a Personal Loan in India With These 5 Steps
- Apply online or in person
If you want to apply for a personal loan in India, the first thing you’ll need to do is fill out an application form. This form will ask you for information about yourself and your job. The lender will get a better idea about your background and income here.
- Lender verification
When the lender gets your loan application, they check the information you gave. They specifically look at your age, monthly salary, profession, etc., to see if you are eligible for the loan.
- KYC process
Once your basic information has been verified, the lender will start authenticating the
documents you sent with your application form.
- Maintain a good credit score
On average, to get a personal loan in India, you need a credit score of 600 or higher. But, as was already said, different lenders have different credit score requirements. When you apply for a personal loan, your credit score is a big part of whether or not you will get it.
- Processing fee
Once the loan amount and tenure have been decided, you’ll have to pay a processing fee to get the loan money. After you pay the fee, the personal loan amount will be sent to your account in 3–5 business days.
Conclusion
Personal loans are becoming increasingly popular in India. The trend can be attributed to the numerous advantages that these loans offer. With a personal loan, you are free to use the money for whatever purpose you see fit. Personal loans, in contrast to others, are simple to obtain, have interest rates that are reasonable, and require a minimum amount of paperwork.
To learn more about personal loans in India, Piramal Finance has similar blogs for you to gain insight from. As an emerging loan lending platform, they also offer a wide range of products and services for you to benefit from.