The personal loan sector witnessed a remarkable growth of 12.6% during last year after undergoing a massive economic downturn. For salaried individuals, this funding option has been life-saving support, primarily because of its flexibility of fund usage and easy availability of substantial funds. Since a considerable portion of one’s monthly income is exhausted to meet monthly obligations, they seek additional monetary assistance to fulfil financial emergencies.
Fortunately, securing instant loans for salaried employees has become convenient with the advancement of internet facilities. Individuals can conveniently find any loan-related information or details on various lenders’ websites. Moreover, the application procedure is quite simple and straightforward.
However, there are certain factors that applicants need to be mindful of before availing of personal loans for salaried employees.
Things to consider before availing personal credit for salaried
Starting from funding a child’s education to meeting medical expenses, individuals can resort to personal loans. Although its multipurpose nature makes it an ideal financing option as borrowers do not have to pledge their high-value assets as collateral, certain crucial aspects must be considered before securing the credit
Take a look at the factors below:
- Decide loan amount
One of the primary aspects to consider before applying for such advances is the loan amount to be borrowed. Almost every financial institution will assess one’s creditworthiness before sanctioning a loan amount. Therefore, borrowers are advised to borrow personal loans for salaried employees as per their requirements to avoid unnecessary repayment burdens.
However, to ensure obtaining a considerable loan amount, individuals need to maintain a healthy credit score and repayment history. Therefore, knowing the ideal CIBIL score for a personal loan and improving it per the requirement will allow borrowers to negotiate better rates with the lender.
- Compare interest rates and offerings
Usually, personal loan interest vary across different lending institutions and are based on borrowers’ creditworthiness. Therefore, to ensure hassle-free repayment in the long run, individuals need to compare various interest rates and loan terms offered by several financiers in the market.
In this regard, individuals can use a personal loan calculator to determine the EMIs and interest outgo beforehand. This way, a borrower can gauge their financial liability and manage their finances accordingly.
- Choose shorter tenor
Although leading financial institutions like Bajaj Finserv offer flexible repayment tenor for a personal loan for salaried employees, it is wise to choose a shorter tenor to avoid financial liabilities. However, choosing a shorter tenor will allow borrowers to pay EMIs for a shorter period but increase the overall interest burden for the borrowers in the long run.
For example, if an individual has applied for a personal loan of Rs. 10 lakh at a 5% interest rate p.a. for a repayment tenor of 5 years, the EMI will be Rs. 18,871, and the interest outgo will be Rs. 1,32,274. Now, if they apply for the same amount for a repayment tenor of 10 years, EMI will be reduced to Rs.10, 607 and the payable interest will be Rs. 2,72,786.
Therefore, it is evident that the loan tenor alteration significantly impacts the overall repayment strategy and makes the entire process expensive. Hence, use a personal loan calculator to find the right personal loan tenor that works for you.
- Check eligibility and documentation
Every lender specifies certain eligibility parameters for borrowers before sanctioning a loan amount. Usually, lenders extend stringent qualifying parameters and extensive documentation for unsecured credits. However, applying for personal loans from leading financiers will ensure flexible parameters and easy documentation.
Following are some of the qualifying parameters of a personal loan:
- Applicant’s age should be 21-67 years
- CIBIL score must be 750 or above
- – Income factor is based on the applicant’s job location
Now when borrowers have a fair understanding of the factors to be considered when applying for personal loan salaried employees, individuals must know the application process.
Application process of personal loan
Here is a step-wise guide of application process:
Step 1- Visit the official website of your preferred lender and click on ‘apply online’ to open the application form.
Step 2- Input necessary details and verify the OTP sent to the registered mobile number
Step 3- Submit your KYC and income details
Step 4- Select the loan amount you wish to borrow and submit the application
After this, the lender’s representative will connect to you for further loan proceedings.
Furthermore, availing credits from large-scale financiers will extend pre-approved loan offers on various secured and unsecured financial products. Therefore, to ensure a hassle-free and simplified loaning process, check your pre-approved offer by mentioning your name and contact information.
Thus, a personal loan for salaried employees can aid in financing emergency expenses in life. However, customers should always keep their repayment capacities in mind before availing of any credit facility.