The interest rates may either be fixed or variable, contingent on the lender and your creditworthiness. The loan duration typically spans from three months to five years, although certain lenders may extend terms for larger loan amounts. Additionally, instant personal loans are unsecured, eliminating the need for collateral. This also means no guarantor is necessary, distinguishing them from certain other loan types.
Process to get instant personal loans in India
Prominent banks such as HDFC, ICICI, and SBI provide instant personal loans. Furthermore, several non-banking financial companies (NBFCs) such as Bajaj Finserv, IIFL Finance, and Credy focus on personal loans. Additionally, platforms like BankBazaar, Paisabazaar, and PolicyBazaar assist in comparing loan choices from different lenders. For individuals new to loan applications, these platforms can serve as a beneficial starting point for evaluating various options.
Every lender establishes distinct eligibility criteria considering factors such as age, income, employment status, and credit score. Borrowers can utilize online eligibility checkers on the lender’s websites or aggregator platforms to obtain an initial understanding.
What to check before taking a personal loan?
The digital transformation of India’s financial landscape has significantly simplified the process of acquiring personal loans. However, the multitude of choices can be overwhelming and might prompt borrowers to make impulsive decisions. Before venturing into the realm of instant personal loans, it is essential to conduct thorough research and examine specific key factors to guarantee a seamless and responsible borrowing experience. Below are critical factors to take into account:
Gauge your financial needs: Verify whether this situation genuinely qualifies as an emergency or an unforeseen expense. Is it feasible to wait and save instead? Consider more economical options such as seeking assistance from family or utilizing credit cards with lower interest rates for smaller financial requirements. Moreover, have you explored all alternative budgeting avenues? Evaluate your present expenditures and assess if there are areas where you can reduce costs to prevent unnecessary borrowing.
Loan amount needed: Understanding precisely the amount you require and the purpose behind it is the utmost critical factor before obtaining any loan, including instant personal loans. It forms the basis of responsible borrowing, enabling you to navigate the loan market with clarity and purpose. By pinpointing the particular requirement and the precise amount needed, you avoid excessive borrowing and the weight of unnecessary debt.
Know your credit score: Your loan eligibility and interest rate are notably influenced by your credit score. Examine your credit report for inaccuracies and contemplate enhancing your score, if necessary, before submitting your application. Scores below 700 may lead to elevated interest rates or even loan rejection. Strive for a commendable score, ideally above 750, to secure more favourable loan terms.
Check for loan offers: Avoid jumping in to accept the initial offer. Conduct thorough research and compare interest rates, processing fees, prepayment penalties, and other charges across various lenders. Shift your attention away from “instant” and concentrate on the overall expenses and transparency. Certain lenders may promise quicker approvals but at the expense of higher fees.
Judge your ability to repay: Use a loan EMI calculator to approximate your monthly instalments and total interest expenditure. Confirm that the repayments align comfortably with your budget, preventing any strain on your financial resources. Refrain from excessive borrowing. Borrow only what you can feasibly repay, taking into account your income and living expenses.
Evaluate loan terms and conditions: Carefully peruse the loan agreement. Avoid merely skimming through it. Comprehend the repayment schedule, prepayment choices, late payment penalties, and any concealed costs. Seek clarification on any unclear points and address any doubts you may have before finalizing the agreement.
Stay vigilant for possible frauds: Exercise caution when encountering lenders promoting “too-good-to-be-true” deals featuring unusually low interest rates or instant approvals. Verify the legitimacy of the lender and refrain from sharing personal information with dubious websites.
Taking out a loan is a significant financial choice. Through diligent research, prioritizing transparency, and comprehending your responsibilities, you can responsibly navigate the instant personal loan market in India and select the option that aligns best with your needs.
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Published: 14 Feb 2024, 12:07 PM IST