Many times, we hear people saying ‘life is unpredictable’ but most of us shrug it away not knowing that someday the hard reality may hit us. The phrase may seem cliché, but the fact is, life is uncertain, and emergencies can strike anyone. The uncertainty can be in the form of a medical emergency, an urgent need to travel, business obligations, etc., where the need for funds may arise. You may have savings, or you can borrow it from someone to meet the cash crunch but what will you do if all your savings and borrowing options are exhausted? Who will come to the rescue?

The first thing that may come to your mind when seeking the answer to these questions is loans. However, there are other questions that may accompany such as, ‘How soon can I get a loan?’ ‘Will I have to justify my spending?’, ‘Am I eligible for a loan’, etc. Instant personal loans can be the answer to all your questions and also, the solution. How? Let us tell you.

What is a personal loan?

A personal loan is a type of loan that an individual can avail without having to justify where the amount will be spent. The loan amount can be used to finance any personal expense, be it home renovation, vacation, wedding, electronic gadget purchase, etc. Unlike in a home or car loan where you have to use the amount to buy a property or a car respectively, personal loans can be used for any purpose. Personal loans are ‘unsecured’ which means that the borrower does not need to pledge any security such as property, gold, cash, etc., to the lender to avail the loan. Personal loans can be of great help to someone who needs money urgently but does not have any assets to offer as collateral.

How instantly can you avail a personal loan?

Earlier, the process involved in availing a loan used to be cumbersome, slow, and required too much of paperwork. However, these days, the loan process has evolved. One can avail personal loans instantly by logging on to the lender’s website and filling up some basic personal information such as name, contact number, PAN, etc. Submission of documents such as PAN card, income details, address proof, etc., can also be done online by attaching the scanned copies of the documents. Once the details are verified, the loan is approved instantly and within some time, the loan amount will be disbursed and will reflect in your bank account.

Personal loans can also be availed by visiting the nearest branch of a bank or a non-banking financial company (NBFC). Lenders will take into account your income level, credit history, employment history, ability to repay, etc., while disbursing the loan.

What are the benefits of availing a personal loan?

As stated above, personal loans can be used for your personal use. There is absolutely no restriction on how you are spending the loan amount. The other benefits that a personal loan offers are:

To avail a personal loan, the documentation required is minimal. You will just need an ID proof, proof of residence, and proof of income. In the case of pre-approved personal loans, no documents need to be submitted.

Personal loans are instantly disbursed. In some cases, it may take up to a maximum of 7 days but in case of a pre-approved loan, it just takes 10 seconds.

The loan processing for personal loans is hassle-free and can be done online or by visiting the nearest branch of the lender. The whole process is quick and convenient.

There is no need to pledge any security for availing a personal loan and hence, it can be a saviour for people who do not have any assets to pledge.

The repayment for personal loans can be done in a pocket-friendly manner through easy EMIs (equated monthly instalments). You can choose a repayment tenure ranging between 1 year and 5 years.

Are you eligible to get a personal loan?

Though the eligibility criteria for availing a personal loan differs from lender to lender, the basic criteria that must be met are:

The individual must be a resident of India

The applicant must be at least 21 years of age

The individual should be salaried or self-employed

If salaried, the applicant should be a permanent employee of the company

The applicant must have a steady source of income

The eligibility of an individual for a personal loan will also depend on the firm he/she is employed with and his/her credit score. A credit score of 750 or above is considered a good score and will increase the individual’s chances of securing a personal loan. Some banks may also approve a personal loan for applicants with poor credit score but will charge a higher rate of interest.

How frequently can you avail a personal loan?

If you wish to avail more than one personal loan, there should be a gap of at least 6 months between the loans. However, the frequency of loans may vary from borrower to borrower, depending on their income and repayment capacity. If you face a huge financial crisis and require urgent funds, you can apply for more than one loan but do so only if you feel that you are financially strong to repay both the loans at the same time. Instant Online Lending paltforms like https://www.bankbazaar.com/personal-loan.html will usually check your Fixed Obligations to Income Ratio (FOIR) before sanctioning any fresh loans to you.

Are there any chances of the loan getting rejected?

Lenders may reject your loan applications if you have missed or delayed any loan EMIs and due to any of the following reasons:

High debt to income ratio

Poor credit score

Errors in the loan application form

Inadequate documents

No regular income

Earning less than Rs.20,000 a month

Working for a non-listed organisation

Multiple loan applications

Conclusion:

Personal loans can be availed frequently to fulfil your personal fund requirements, but you must remember to maintain a good credit history, keep a check of your debt to income ratio, and ensure that your income is adequate to repay more than one loan. Also, don’t forget to use the amount sensibly.

Author's Bio: 

Sarah is a Freelance Writer and Social Media Manager who helps finance professionals and Fin-tech startups build an audience and get more paying clients online.

Before starting a writing business, Sarah spent six years as a Bank Teller and Virtual Assistant for financial companies in the U.S. and U.K. After a successful career helping small banks and real estate agencies, Sarah now helps them write marketing copy for their products and services.