Considering the present economic scenario, lending institutions have introduced strict guidelines for loan applicants. Getting the bank loan approved has become a tough task for the applicants. Hundreds of criteria have to be fulfilled. Personal Loans are better alternatives for those who have a good credit score, but are in need of finance urgently.
How to Get a Personal Bank Loan
Though personal loans have their own benefits it is often argued that they might bring with themselves larger problems than expected as the interest rates for these loans are pretty high.
Essential for all:-
First thing, that the applicant has to keep in mind while applying for personal loan is he/she has to identify the type of personal loan. For secured personal loans one has to put some asset of his/her as security while unsecured loans or signature loans, as they are called, is the case where the lending institution loans money to a person with just his/her signature. If the person is having a long term relationship with the bank and the bank is well aware of the customer then getting a signature loan becomes easier.
Personal Loan has a huge market so it’s better to do a bit of research regarding the interest rates before applying for the loan. It’s better not to apply until and unless one is sure about the interest rates. If a person goes on applying in different banks for loan subsequently the credit score falls with each application. This means if you had applied in bank A, then while applying in bank B for a loan, your credit score will be lower than what it was while you had applied in A. Peer to peer sites can also be opted to get personal loans.
Oh no: lenders:-
Once the selection of lending institution is done next step would be to submit required documents. Documents include residential proof, income proof and identity proof. Other relevant documents that might be required include IT return, salary slips, bank statements etc. Often investigation is carried from the lender’s end after submission of documents is done. Absence during such investigation might lead to cancellation of loan application.
Few things should be kept in mind while getting a personal loan. These loans come with high rates of interest. Initial installments are nothing but interest payments. Part payments are not acceptable. Because of the risky nature of the loans, lenders opt for borrowers with good credit rating. Poor credit rating leads to rejection of the application. So strictness of eligibility clause is often a hindrance in this case. Many lenders offer loans to borrowers with poor credit score, but the principal amount is lower and interest rates are higher in comparison to the one given to the borrower with good scores.
So before taking the loan a person must assess his/her income, liabilities and expenses. Personal loan should only be taken when there is an urgent need of cash and the person does not have any asset but only has a credit card.