Procedure to avail an online personal loan The US fed has recently increased the lending rate by 75 basis point which is the highest interest rate hike in the last 30 years. This increase in interest rates is due to the rising inflation which has led to the increase in cost of daily consumer products. The effect of rise in inflation in the United States can also be seen in India as India's consumer inflation has surged to an 8 year high of 7.79% in April breaking the RBI limit of 6% for the fourth straight quarter. Food inflation which is the driving cost of the rise in retail inflation rose by 8.38% which is the highest in this latest fiscal What is the need for an online personal loan? Rising consumer inflation has increased the cost of living for the average Indians which has made it difficult for them to purchase everyday products such as fuel, electronics or even basic food items. This indeed has led to the increase in need of a personal loan to finance the basic needs of an average Indian consumer In this article we are going to help you to avail an online personal loan which will help you to finance your basic needs. What is a personal loan? Personal loan is a type of unsecured credit which is provided by financial institutions to its consumers. Unlike car loan or property loan personal loan is a multipurpose loan and can be used for various different objectives such as paying back debt, vacation or to meet wedding expenses etc. In this digital age consumers can apply for a personal loan online by checking their respective credit score online. Which makes it a hassle-free process as consumer does not need to consult various agents and can choose a loan with his favorite institution which suits his own personal needs. Uses of a personal loan Since a personal loan is not tied to a particular object it can be used for various purposes such as paying back a debt, buying a new car or planning a wedding or even planning for a vacation. People use a personal loan to even invest in stock markets or to pay for any emergency expenses or their children's education fees. If the person availing the personal loan has a good credit score it is possible that he can get a lower interest rate which can help him to use the personal loan to make big investments too. Documents required to apply for a personal loan online. For Salaried Individuals 1. Identity & Age Proof 2. Completely filled personal loan application with photograph 3. PAN Card 4. Residence proof - Passport driving license, Voter ID, postpaid/landline bill, utility bills (electricity/water/gas) 5. Bank statements for the last 3 months (preferably your salary account) 6. Salary Slips of last 3 months 7. Form 16 or Income Tax Returns of last 3 years For Self-Employed Individuals 1. Identity & Age Proof 2. Completely filled personal loan application with photograph 3. PAN Card 4. Residence proof - Passport driving license, Voter ID, postpaid/landline bill, utility bills (electricity/water/gas) 5. Bank statements for the last 3 months (preferably your salary account) 6. Salary Slips of last 3 months 7. Last 3 years Income Tax Returns with computation of Income 8. Last 3 years CA Certified / Audited Balance Sheet and Profit & Loss Account Interest on personal loans – The interest on personal loan ranges anywhere from 10% to 50%. It is highly variable as it depends upon the credit score of the consumer if the consumer has a credit score of more than 750, he's likely to get a lower interest rate and the processing time of the loan is expected to be faster for him. Personal loan can be availed to an amount up to 50 Lack rupees and can be repayable up to a period of 60 months Various types of personal loans 1. wedding loans As the name suggests personal loans can be availed to finance weddings 2. Medical emergencies When people don't have any savings available, they apply for personal loans to fund their medical emergencies 3. Personal loan for home renovations A home renovation loan allows you to pay for repairs or renovations to your home. How to increase your chances of getting a personal loan 1. credit rating Ensure that you have a good credit score of 750 and above and ensure that you have not defaulted on any of your previous loan / EMI payments 2. picking a cosigner / guarantee If you are unable to avail a personal loan which could be due to your low credit score then consider to get a cosigner or a guarantor who should have a higher credit score which increases the chances of you getting a loan but you need to keep in mind that if you fail to pay back the personal loan the guarantor will be personally liable to pay back the loan on your behalf 3. Borrow according to your needs The amount that you should borrow from the financial institution should be to meet your needs not for any extracurricular activities which will end up hampering your credit score. Conclusion In the end we can say that personal loans are one of the most flexible loans that can be availed by a consumer. Banks provide this facility so that consumer can use this money responsibly. At the end of the day this is also a loan which needs to be repaid back with interest hence it is advisable to only apply for a personal loan when required or in a need of emergency. Also, if there is a specific loan available for the specific purpose of the consumer the consumer should not avail a personal loan Source 1. https://www.hindustantimes.com/business/at-7-79-india-s-retail-inflation-rises-to-8-year-high-inapril-101652360919782.html 2. https://www.bankbazaar.com/personal-loan.html 3. https://www.herofincorp.com/personal-loans
