A personal loan is an unsecured type of loan that can be used for general purpose. It can be availed to take care of medical expenses, education, travel, house repair work, and wedding expenses among others. There are a number of people who take a personal loan to clear their credit card debt.

A personal loan is usually taken for a short period. It is a popular form of loan as it does not require collateral and also involves minimum paperwork. When you apply for a loan, lenders take into consideration factors like credit score, income, age, and job stability, among others.  

In recent times, there has been an increase in non-traditional lenders such as digital lending platforms. Let’s take a look at some of the ways in which you can get a personal loan. 

1. Online loan portals 
There are several online loan portals such as BankBazaar that help you browse and compare personal loans from an array of lenders. You can check different lenders such as banks and non-banking finance companies (NBFCs) that are listed on the sites. There are a number of NBFCs that have teamed up with online lending firms to attract more customers. You can compare the interest rates from the lenders and select the one that is suitable for you. 
It should be noted that once you select a lender, you can apply for a personal loan via such loan portals. Once you apply for the loan, the lenders will get in touch with you and complete your application process. 

2. P2P lending platforms 
You can also get a loan is via person-to-person (P2P) lending platforms. A P2P lending platform connects a potential borrower to a lender. They are regulated by the Reserve Bank of India (RBI) with an aim to protect the interest of lenders and borrowers. At present, the P2P market is still at an early age in the country and is not common among traditional borrowers.  
The interest rates for loans on P2P lending platforms are high as the risk involved is also high. The minimum interest rates charged to borrowers are 10.99% p.a. to maximum 36% p.a. You can get a loan for a small amount which is below Rs 50,000 via P2P lending platforms. The process of applying for a loan as well as the disbursal is faster as compared to banks in case of P2P platforms. The P2P loan process is also quite seamless as it takes place online. The platform is beneficial especially for first-time borrowers as they can get access to a large number of lenders, as compared to banks. 

3. Online lending platforms 
Online lending platforms in the country have paved the way for first-time borrowers as well as borrowers with low credit scores. By 2023, the digital lending market in the country is expected to hit $100 billion. When you apply for a loan, traditional lenders such as banks will consider parameters such as your credit history and credit score. However, the new-age lending platforms are using dynamic credit scores to assess creditworthiness of a borrower. 
They use artificial intelligence and algorithms to speed up the loan request process. Instead of factors like age, income, the lending platforms rely on alternate data of consumers including consumption patterns, social media profiles, geographical locations, payment records for phone bills (postpaid users), online shopping history, devices used for surfing, and the internet usage timings, among others. 

4. Pre-approved loans 
If you have a high credit score, lenders will be willing to offer you pre-approved loans. Banks offer pre-approved loans to their existing customers after measuring their creditworthiness. When you are offered a pre-approved loan, it means you have already cleared the initial screening process that is conducted by lenders when you apply for a loan. However, it should be noted that you need to submit the necessary documentation for the verification process. 
In the case of pre-approved loans, the interest rates are cheaper, and the processing time is also faster. However, they can be offered to you only for a limited period of time.  

Things to Keep in Mind 

- Analyse the need for a loan 
First and foremost, you need to analyse the need for taking a personal loan. Once you have made the decision, it is important to get the amount right. Make sure it is enough to cover your requirement but at the same time, it is in your budget and you are not going overboard. 

- Compare interest rates 
Banks offer pre-approved loans at competitive rates to lure customers. Therefore, it is advised to browse and compare for the interest rates before finalising the lender. If you have a high score, you are in a position to negotiate for a better rate. You can use EMI calculators available on websites like BankBazaar. EMI calculators help you get an idea of the EMI and loan tenure. You can select the one which is suitable for your needs. 

- Improve your credit score 
It is important to have a credit score in the range of 750-900. A higher credit score suggests you have been a responsible borrower and have a good repayment history. It becomes easier for lenders to measure your creditworthiness if you have a good credit history.

We hope the aforementioned information will help you plan and apply for a personal loan. 

Author's Bio: 

Deepti here and I work as a freelancer, Blogger and specialize in compiling blog posts on the topics related to financial products like Credit Score, Credit Report, CIBIL Score, CIBIL Report, Equifax, Fuel Resources such as Petrol, Diesel, Crude Oil and so on.