The current economic downturn has had a severe impact on India. Job cuts, downsizing and pay cuts have seeped into a financial crisis among several households with stable salary income. In this regard, a personal loan for salaried individuals is a convenient way to meet numerous financial requirements without overburdening.
Though available for every individual, financial institutions prefer salaried individuals primarily because they have a fixed source of income, ensuring lower default risks.
If you are planning to obtain one, keep reading to know how to apply for a personal loan easily.
How to apply for a personal loan for salaried individuals?
Several financial institutions extend personal loan for salaried applicants online to do away with the conventional method. Here is a step-by-step guide to securing this unsecured credit option-
Step 1: Visit the official website of your preferred lender
Step 2: Scroll to ‘Apply Online’ to access the online application form
Step 3: Feed your KYC and income credentials and
Step 4: Attach the required documents as evidence
Step 5: Select a loan amount and submit your application
Nonetheless, before applying for the same, it is crucial to factor in a few points to simplify and accelerate the application process.
Things To Consider When Applying For A Personal Loan For Salaried Individuals
Before you obtain one, determine the following aspects to make an informed decision-
- Loan amount
The first step before a personal loan application is to understand the purpose of the credit. One must estimate the costs and financial requirements beforehand and select a loan amount accordingly. This will help to meet your financial obligations efficiently and make timely repayments.
- Interest rate
Being unsecured, lenders generally offer high personal loan interest rates. Therefore, before you finalise your lender, compare several options to settle for the most competitive one. Furthermore, since a slight difference in interest rate affects the EMIs, prospective borrowers must carefully compare the rates several financial institutions offer to pick the most suitable one.
- Credit score
A credit score plays a vital role in informing lenders about a borrower’s debt management. In general, lenders ask for a credit score as high as 750 (or above) to lower the chances of default payments. On the contrary, anything below 750 indicates bad debt management. Therefore, individuals must know how to get a personal loan with a poor credit score before applying to avoid rejection, as this may bring down their credit scores by a few points.
- Associated charges
In addition to the interest rate, financial institutions charge additional fees, such as foreclosure and pre-payment penalties, penal charges, stamp duty fees, and personal loan processing fees. Consider all these charges while choosing a lender to strategize your expenses accordingly.
- Scheme out a repayment plan
Structuring your loan repayments beforehand will mitigate the chances of dues. Furthermore, it indicates efficient debt management, which in turn, will help improve your credit score. However, you can calculate the payable amount simply by using a personal loan EMI calculator available on the websites of reputed lenders, such as Bajaj Finserv.
- Eligibility criteria
Since a personal loan does not demand collateral or security, financial organisations offer this credit instrument against strict eligibility criteria. Though indicative, a few of the common parameters for salaried employees include:
- Applicants should be Indian residents.
- The age limit is between 21 and 67 years.
- Applicants should be employed by an MNC or any private or public corporation.
- The credit score should be 750 and above.
- The employment history should be of at least 3 years.
Additionally, the eligibility depends on your repayment capacity, as it coincides with your monthly income and financial obligations. Therefore, you can use an online personal loan eligibility calculator to determine exactly how much personal loan you can get on your salary.
- Documents required
Lenders ask for a few documents to substantiate the entries on the application form. Though the list of documents may vary from lender to lender, some of the commons among them are as follows:
- PAN card
- Aadhaar card
- Voter ID
- Driving license
- Income proof- last 3 months’ salary slip or last 6 months’ bank statement
- Employee ID card
- Passport-size photographs
The lenders may ask for additional documents when applying for a personal loan for salaried individuals for comprehensive verification purposes.
Apart from these, you can also check out the pre-approved offers by various renowned financial institutions. The benefits are available on unsecured credit options at your convenience. To check your pre-approved offers, all you need to do is provide your name and contact details. A personal loan for salaried individuals serves as a multipurpose credit instrument. You can utilise the fund for debt consolidation, medical emergencies, wedding expenses, overseas education, home renovation, big-ticket purchases and more. Therefore, selecting a shorter repayment tenor will enable you to pay interest for a short period and clear off the loan.