For any financial need, like a home renovation, a wedding, or a medical emergency you would need a fat bank balance. That’s where a personal loan plays an important part for those without a strong financial background. They often rely on a genuine Personal loan to borrow money from the lenders for a while.
Personal loan is generally of two types, secured and unsecured loan. You can aim for anyone depending upon the eligibility criteria you hold and the amount you are looking for. Many would look for an unsecured loan over a secured loan. If you too, aim for an unsecured personal loan, find out how you can have one.
What is an unsecured personal loan?
A personal loan is an amount that comes with the flexible end-use, which means you can use the fund for any use. You lend an amount from the lender and in return pay your debt payment along with an interest rate for a fixed tenure. An unsecured personal loan is a loan that comes with no collateral security attached. It does not require any security assets like your house or a car to provide you with the loan. The loan amount is less compared to the secured loan which comes along with collateral security.
Steps to get an unsecured personal loan easily
1. Credit score: A credit score is a three-digit number that holds information regarding your financial background and history. It is the representation of how you have handled your past debt repayment and your financial behavior. A good credit score can make you look responsible in terms of finance and credit. The credit score generally ranges from 300-900, out of which a score above 650 makes you eligible.
The eligibility criteria are different for every lender but a general score if 650 makes it ideal for most of the lenders. A good credit score will make your process easy and get your loan approved easily. So check your credit score before you apply for an unsecured loan.
- 700 and above: excellent credit score
- 600-700: good credit score
- 530- 600: fair credit score
- Less than 530: bad credit
2. Compare loan interest: Once you are aware of your credit score it will help you gain a complete insight. You will get an idea about your loan amount and your interest rate. If you are having a good credit score, chances are you get a low rate of interest. On the other hand, if your credit score is not good you will have to pay a high-interest rate, as lenders will consider you a risky one. They will offer you a loan, but the interest rate will be high.
3. Pre-qualify for a personal loan: You will get an ample number of lenders who would check your credit during the pre-qualification process. Checking your score and eligibility beforehand can help you make a wise decision. If you find your credit score less than required you can take time to work and build it. Check it using the online websites which would require some of your details like;
- Social secured number
- Monthly debt amount
- Income details
- Identify proof
- Address
- Contact details
- Date of birth
- Education qualification.
4. Good research: Shop around till you end up having the best loan quote. Unsecured personal loan is easily available through the online portals. You need to shop around research to get the best lender. Remember, a lot depends upon the lender you choose hence, choose wisely. Do not make abrupt decisions regarding your unsecured personal loan. Detailed research considering all the factors like loan amount z eligibility, tenure, and rate of interest can get you the right lender.
5. Compare various other options: Before you plunge on and take a personal loan why not look around for other options? If you have a good credit score you have lenders knocking around to offer you various financial products. Why not look for one instead of a personal loan?
- Credit cards: If you have a good credit score, you will easily get a credit card. Why not get a credit card and use it instead of a personal loan? It comes with a 0% interest, so if you can repay the credit card bills on time it can be a good option.
- Consider a secured loan: Consider a collateral loan so that you get a low-interest rate. You get back your security asset once you pay. Buy a collateral loan helps you get a very low-interest rate which can help you save a good amount.
6. Get through the fine print: Read the terms and conditions well. Every minute detail regarding the prepayment penalty, down payment, automatic withdrawal, flexible payment features, and EMI conditions needs to be checked.
7. Final approval: Once you shop around and find your lender you need to start the loan process. You need to apply for the loan using the online portal of the bank or the financial institutions. You need to provide them a lot of documents for the eligibility check. Find below the details of the documents you would need to provide:
- Passport
- Pan card
- Income salary slips
- Aadhaar card
- Income proof
- Tax files
- Address proof
- State ID
- Bank statement
After you submit all your documents your lender will go through a detailed check and find if you are eligible for the loan. Once your loan gets approved you get the disbursement within a week or so. The process can take from 2 days to 7 days, completely depend upon your lender.
Summary:
At the end of the day, an unsecured loan can be used for almost everything. To get an instant loan online in India consider all the above-mentioned points. These steps will help you acquire a personal loan without any hurdle or a daunting phase. Utilize your financial resources responsibly so that you can maintain a good image with credits.
