A personal loan for salaried provides an applicant with the flexibility of usage. It allows the applicant to use the loan amount for higher education, debt consolidation, emergency medical expenses, etc. Not to mention, a personal loan application requires minimal documentation.
Despite the easy accessibility, there are some aspects that individuals must keep in mind before applying for a personal loan for salaried individuals.
Things to keep in mind when applying for a personal loan
Payment defaults can negatively impact an individual’s credit history. Therefore, to avoid such circumstances, consider these factors before applying for a small personal loan online-
- Evaluate repayment capacity
To avoid debt accumulation, consider all pre-existing financial obligations when applying for a personal loan. Individuals should make sure that their income is enough to repay the loan. Not to mention loan eligibility is also based on the ratio of fixed obligation on monthly income. An individual with less than Rs.30,000 monthly income cannot have maximum financial obligations exceeding 50%. However, higher-income groups can have a 65% obligation to income ratio. Therefore, check income along with financial obligations before applying for a personal loan.
- Maintain a high CIBIL score
When applying for an unsecured credit option like a personal loan, the applicant must maintain a proper credit payment history. This affects an individual’s CIBIL score, ranging between 300 and 900. Usually, when opting for a personal loan, an applicant must have a CIBIL score of 750 or above. To get a personal loan when you have a bad CIBIL score, applicants can check their credit report for mistakes or can add a co-applicant with a good credit score and a regular source of income to increase their chances of availing the loan.
- Meeting the eligibility criteria
It is crucial to check the eligibility criteria of a personal loan for salaried individuals before applying. Usually, this requirement can be different for each financial institution. However, for institutions like Bajaj Finserv, applicants must meet the following eligibility criteria for a personal loan.
The common eligibility criteria are-
- Applicants must be between 20 to 60 years of age.
- A salaried individual must be employed at a public or private company or MNC.
- Must be an Indian resident.
Other than this, whether applicants meet the salary requirement as per the city they reside in also affects your personal loan approval.
- Compare interest rates by different financial institutions
The interest rate applicable on a personal loan varies with financial institutions. Therefore, compare the interest rates applicable to select an institution that offers a comparatively lower rate. A lower interest rate will decrease the cost of borrowing, reducing the financial strain on the applicant.
- Find out foreclosure charges
If the applicant opts for a small personal loan with a tenor of 2 to 3 years and expects an additional cash flow, they can opt to foreclosure their loan. Many institutions charge penalties on foreclosure as early repayment prevents the institution from earning the interest expected to apply on the loan amount. However, financial institutions like Bajaj Finserv don’t charge applicants any penalties on foreclosure of personal loans.
Other than these factors, some institutions have additional charges applicable on a personal loan. To avoid such circumstances, apply for a personal loan from leading financiers like Bajaj Finserv that comes with zero hidden charges.
To simplify the application process, applicants can opt for pre-approved offers on a personal loan. These offers are also available on credit cards, business loans, etc. You can check your pre-approved offers by entering your name and contact details.
Therefore, personal loans for salaried individuals are viable for those requiring access to instant monetary funding. So, consider all factors mentioned here when applying for this credit option.