Want to Apply for a Personal Loan? Here are the Requirements to Getting It

Want to Apply for a Personal Loan? Here are the Requirements to Getting It

Want to Apply for a Personal Loan? Here are the Requirements to Getting It

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So many dreams you’d want to turn into reality. You want to take that family vacation you’ve been delaying. You’re in need of a home renovation badly. Hmmm…I know it can be really difficult finding yourself financially in this current economy. Alot of people opt for getting a personal bank loan which is a good option, but you could still run into some obstacles in the process.

Banks have loan requirements which they take very seriously if you’re applying either as an individual or as a business. It’s proper if you know what they are before you apply. That’s why I’ve put this article together so you could start your research here.

  1. We’ve got two types of personal bank loans. They are the secured bank loan and the unsecured bank loan. In the case of a secured bank loan, you’ll need collateral in order to help you receive lower fees, better repayment terms and a more beneficial interest rate. For an unsecured bank loan, the use of collateral is not needed although repayment is at a much higher interest rate. The level of your financial situation will most likely determine which loan you will receive.
  2. Make sure you know your credit score. If you don’t, you can purchase it for about $16 from FICO or any of the other three major credit bureaus. Also get a free copy of your credit report at AnnualCreditReport.com. If you see any discrepancies in your report, fix them before applying for any type of bank loans.
  3. Don’t just settle for the first bank loan offer you get, look around. It might not make sense at first, but you’d be surprised to find out that different banks charge a different interest rate on the loans they offer. Make sure you get the best deal possible for your individual needs before settling.
  4. Knowing your repayment terms before accepting a bank loan is pretty important. Is your monthly payment fixed or variable? It should be fixed. Also, be sure to ask about upfront fees and whether the loan is disbursed all at once or in installments.
  5. Will you be in need of collateral or not? I’m pretty sure you don’t want high-interest rates on the loan. While offering collateral could help you get a lower interest rate on the bank loan and in turn save you a great deal of money, if on the other hand, you don’t have collateral, you could also go for an unsecured bank loan which would be influenced by your credit standing.
  6. Be sure to repay your loan as outlined in the terms of the agreement with the bank. If you don’t, you could risk losing your good credit standing or the collateral offered to get a secured bank loan.
Personal Loan Eligibility

Individuals who can take a Personal Loan include;

  • Salaried Employees
  • Salaried Doctors
  • Employees of Public and Private Limited Companies
  • Public and Private Limited Companies
  • Government sector Employees including Public Sector Undertakings and Central and Local Bodies
  • Minimum age of 21 years
  • Maximum age of 60 years at loan maturity
  • Minimum net monthly income – Rs. 15,000

See Also: 5 (Five) Questions to Ask When Choosing a Financial Advisor and Planner

Documents required for Personal Loan
  • Application Form
  • Photograph
  • Age proof
  • ID proof
  • Income proof
  • Bank statement
  • Residence proof
  • Signature verification proof
  • Post-sanction / pre-disbursement documentation
  • Loan Agreement duly signed
  • Standing Instruction (SI) Request / ECS Form

The process usually starts with you sending out an application to a bank or you have a conversation with a banker showing your interest in a personal loan. If you have excellent credit, you may even receive pre-approved offers from creditors. After submission of all necessary documents, it might take a while before you hear from the bank. How long usually depend on their policies and how strong your application is. When applying for personal bank loans, do your research very well. Don’t rush into it. Be sure to take enough time to go through and fully understand your lender’s terms and conditions before you agree to sign any documents. Was this article helpful? Share your thoughts with me in the comments.

Sleak Entrepreneur | Financial Consultant | Blogger

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