Personal loans are a good option for people looking to fund sudden or unplanned expenses for medical treatment, education funding, or vacation-related. These loans are approved once the lender checks the eligibility of the applicant and after the completion of certain procedural formalities. Before you apply for a personal loan, do check the eligibility requirements outlined by the lender and arrange all the necessary documents. This will ensure that your application is processed quickly. Let us look at the various steps involved in the process of getting a personal loan.
Step1: Identify the Lenders and Check the Eligibility Criteria
The first step in your quest for getting a personal loan is to identify banks and agencies that are offering personal loans. Once you identify the banks, go through their sites to check the eligibility criteria for these loans. This includes requirements related to your age, nationality, and stable income. All lenders also require applicants to submit certain documents for proving their identity, address, and income. Lenders also offer access to tools like loan calculators that help you know how loan you are eligible to get.
Step2: Check the Rate of Interest and Other Applicable Charges
The next step involves checking the rate of interest for the personal loans. The interest rates may vary for different loan amounts, tenures, and the credit worthiness of the lender. Applicants with a low credit score may have to pay a higher interest rate on their personal loan. Some lenders also charge a processing fee while others may also impose a penalty on late payment of EMIs. So before applying, check the applicable charges.
Step 3: Finalize the Loan Amount and Calculate the EMI
Now that you know that you are eligible for getting a personal loan from a lender, you need to finalize the amount. It is advisable to borrow only that amount which you can repay comfortably. Use a personal loan EMI calculator to know about the EMI that needs to be paid on the chosen amount and duration.
Step 4: Fill out the Form and Attach All the Documents
Once you have checked your eligibility for a specific loan and its EMI, you can go ahead with the application process. Fill out the application form correctly and attach all the necessary documents like your identity and address proof besides proof of your income. You will also need to attach a cheque for the processing fee. You will also be required to provide your bank details for the transfer of the loan amount once it is approved.
Step 5: Wait for the Approval and Accept the Terms & Conditions
The lending agency will take some time to process your application as it will need to cross-check your documents and credit worthiness. It will notify the status of your personal loan application once the processing is complete. You will be informed about the terms and conditions attached to the loan and once you accept them the loan amount is transferred into your bank account.
Step 6: Plan Your EMI Payments
Now that your personal loan has been approved and you have used the money for funding your expenses, you need to plan out the repayment. Keep track of the due dates for your EMI payments and ensure that you pay them on time.