As stated by RBI, the lending industry experienced a 27.7% increase in the personal loan segment in March 2022 than the preceding year (1). A personal loan is one of the most convenient financing options for both salaried and non-salaried individuals. Nevertheless, financial institutions prefer salaried individuals due to their fixed monthly income. Individuals need to know the necessary factors to be mindful of while applying for a personal loan for salaried individuals.
Things to consider while opting for a personal loan for salaried individuals
Individuals need to carefully check the following factors to make the right decisions about their borrowing:
Personal loan interest rate
Individuals need to compare different lending institutions according to the parameters of interest rate. This way, they can determine which lending institutions will be cost-effective.
They can also try negotiating with their lending institution to reduce their borrowing rate. However, negotiation can bring positive results only when they properly meet the lending institution’s eligibility maltepe escort standards.
Processing fee and other charges
Borrowers also need to pay around 3-4% as processing fee for personal loan along with other charges, such as mandate registration charge, stamp duty, etc. Besides the interest rate, all these charges also increase the borrowing cost to a large extent. Individuals need to make an effort to find a lender that takes lower charges so that their borrowing cost stays minimum.
When choosing a tenor, salaried individuals must consider their repayment potential. This is because, in a lower tenor, they can repay the debt faster, but they get a higher EMI amount. They may encounter difficulties to meet their financial obligations if the amount exceeds their financial capacity.
Further, a higher tenor can be an undesirable option because it increases their interest liabilities. So, they need to know how to find the right personal loan tenor that works best for them.
In order to get the credit facility without much hassle, salaried individuals also need to meet the eligibility parameters of the lending institutions. These eligibility criteria include the minimum income, credit score, age, etc., that borrowers must meet to get a personal loan. Individuals who satisfy these standards properly can obtain better loan terms after negotiating with their lenders.
In this regard, individuals also need to be aware of the common eligibility parameters across the lending market in India.
Personal loan eligibility factors for salaried individuals
Salaried individuals need to meet the following parameters to be eligible for a personal loan:
- Applicants must be Indian residents.
- They need to be in the age group of 21-67 years old.
- They also need to possess a CIBIL score of 750 or higher.
- Having a minimum salary of Rs.22,000 is also crucial. However, this minimum salary requirement varies according to location.
Note that these eligibility standards are only indicative. Individuals can find detailed requirements on the lender’s official website. In this regard, they also need to know how to get a personal loan if they have a poor credit score.
Documents required for a personal loan for salaried individuals
Intending borrowers need to be prepared with the following documents while applying for a personal loan:
- KYC details (Voter ID card, passport, Aadhaar card, etc.)
- Income proof (Salary slip, ITR, etc.)
- Bank account statements
- Employee ID card
They must also remember that the lenders may ask for other documents if they consider it necessary.
How to apply for a personal loan for salaried individuals
Before applying for a personal loan, individuals need to select a lending institution according to their interest, charges and other loan terms. After this, they will have to follow the below-mentioned step-by-step guidelines to apply for a personal loan:
Step 1: Visit the lender’s official website
Step 2: Click on ‘Personal Loan’ from the product list
Step 3: Tap on ‘Apply Now’ after reading all the terms and conditions of the loan
Step 4: Enter the required personal detail and your mobile number
Step 5: Verify your mobile number by entering the OTP
Step 6: Provide all the required information properly
Step 7: Submit the fill-in application form
After this, individuals will successfully complete their application process. Next, the lending institution will process all the application forms and check whether applicants meet the eligibility standards. The lender also contacts eligible individuals to guide them about the following processes. While applying for the credit facility, they also need to know about the popular personal loan scams and how they can avoid such scenarios.
Apart from this, lending institutions also provide pre-approved offers to their customers on financial products, such as personal loan, business loan and credit card. These are special offers that lenders extend according to the existing portfolios of the respective customers. They can accept these deals to expedite their loan application processes. It only takes them to mention their names and contact details to check their pre-approved offers.
In conclusion, personal loan for salaried individuals can significantly help working professionals meet their credit crises. Being a credit facility with zero end-usage restriction, they can leverage the capital to fulfil any of their personal, professional or commercial objectives.