In today’s day and age, it has become increasingly easy to get a personal loan. So much so, that you can apply for personal loan online, without even stepping into a bank. Moreover, you can use the loan amount for a huge plethora of reasons that you needn’t specify to the lender. As long as the bank is convinced that you demonstrate good credit repayment behaviour and have the capacity to repay the loan amount, your personal loan can be sanctioned instantly. Here are a few questions you should ask when taking out a personal loan.
Q1: What are the reasons for taking a personal loan?
Answer: You can take out a personal loan for several reasons; whether you need money for a financial emergency, whether you need it for hospitalisation or even for recreational purposes. Personal loans are provided for funding lavish weddings, luxury vacations, home renovations and even debt consolidation. You can also take out a loan to invest in your business or put a down payment on your new home.
Q2: Can I apply for personal loan online? How can I do so?
Answer: Yes, you may apply for a personal loan online. Simply visit the website of the lending institution, for instance Bank of Baroda; fill out the online loan application form, submit your credit scores and attach scanned, soft-copies of the necessary documents. If the bank is convinced that you can repay the loan amount, your loan will be sanctioned and disbursed easily.
Q3: What documents must I submit will the loan application?
Answer: Personal loans do not require detailed documentation. You must provide the basic, minimal documents such as your identity proof, address proof, employment proof, and salary statements of 3-6 months along with bank statements and proof of income tax returns filed. In case you are self-employed or own a business, you have to provide documents related to your business. People who apply for the loan online may submit soft copies of the documents, whereas those who approach the bank must submit photocopies. If the bank is satisfied with the documents provided by you, you can even expect instant personal loan approvals.
Q4: What makes me eligible for a personal loan?
Answer: To be eligible for the loan, you must prove to the bank that you have a regular source of income. You could be a salaried individual, a professional or a self-employed entrepreneur owning a business. Banks also consider the company you are employed with along with your credit history, credit scores and your residential location to consider you eligible for the loan.
Q5: What is the typical tenure of a personal loan?
Answer: Every lender provides different tenures to repay the personal loan. However, most banks typically offer tenures of 12-60 months for repaying the loan. In a few rare cases, you may be allowed to take out a shorter or longer tenured loan, depending upon the case made by you.