A personal loan is an unsecured loan that is given based on your creditworthiness such as CIBIL score, repayment, and income history.
Unlike a home loan and more, you don’t need to keep any security or collateral to secure the loan. You can avail personal loans up to Rs.25 lakh from leading lenders and repay in EMIs.
Personal loans could be used to meet many financial emergencies such as medical urgency, vacation, home renovation, and wedding and beyond.
Usually, personal loans come with a tenor of 1-5 years to help a prospective borrower repay the loan over a longer tenor. Before applying for a personal loan, it is good to check the lender’s loan eligibility to ward off rejections. It is vital to do so as multiple rejections can hamper your credit score.
Things to consider before applying for personal loans
- You should compare various personal loan offers listed on a third-party website and opt for one with lower interest and flexible repayment options.
- Check your personal loan eligibility online to ensure that you have higher chances of approval. You can use the personal loan eligibility calculator at a leading bank’s website to determine a loan amount your income can support.
- Use a personal loans calculator to know how much the loan will cost you monthly. Personal loan EMI calculators are available for free at a lender’s website, which you can use to know the exact EMI payable quickly.
Personal loan eligibility parameters
Here are some standard personal loan eligibility terms that most of the lenders look at while processing your personal loan application for approval:
- You need to be aged between 23-58 years
- You must be a resident citizen of India
- You should be a working professional employed with an MNC, private, or public limited company in India
Why calculate personal loan EMI beforehand?
Calculating personal loan EMI in advance can surely help you know the monthly cost of your loan. Depending on monthly installments, you can create a budget to make way for the payable EMI without defaults.
Also, knowing the EMI beforehand can help you in managing or arranging monthly budget to ensure an easy EMI payment.
No matter what kind of loans you plan to apply for, calculating the loan EMIs in advance can let you also decide on a suitable loan tenor.
As per the EMI figure that you come to know, you can adjust loan amount or tenor. It is to ensure that EMI payment does not exceed more than 50% of your total income.
Opting for a shorter tenor means paying higher loan EMI; on the other hand, a long tenor means lower EMIs but higher personal loan interest payments. Hence, you should also opt for a loan repayment tenor as per your needs and considering the discussed factors.
In case of a personal loan, it is good to use a personal loan EMI calculator to know the exact EMI payable on the desired loan amount. Nowadays, lenders also do not charge any amount for prepaying or foreclosing the loan account before the tenor.
If you are all set to apply for personal loans, then you should be able to manage it with more confidence after going through this post.
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