The report by RBI reveals a significant increase in the personal loan category by 12.1% by the end of 2021. After the recovery of the Indian economy, this figure indicates the growing popularity of personal loans among intending borrowers. Such growth can be attributed to the fact that it does not require any collateral, which keeps one’s assets risk-free. Also, one can instantly apply for personal loans online, ensuring minimal disbursal time.
Usually, the rules and regulations of a personal loan are administered by the RBI and are almost similar among the lenders, it is still essential for borrowers to learn more about the terms and conditions in detail.
How to apply for an online personal loan?
One of the primary reasons to apply for personal loans online is that they can be utilized for meeting varied purposes. Such financing options are an effective way to deal with an urgent financial crisis. The application process for such credit options has become simple and hassle-free.
Therefore, if you are seeking to avail an urgent personal loan, follow the steps mentioned below:
Step 1: Visit your preferred financial lender’s website and click on ‘apply online’ to view the application form
Step 2: Enter essential details and verify the OTP sent to your registered contact number
Step 3: Input your KYC and income details
Step 4: Select loan amount you wish to acquire
Step 5: Submit the loan application
After verification, the lender’s representative will contact you to discuss further loan proceedings.
Terms and conditions of an online personal loan
Usually, a personal loan agreement is a contract through which the credit is processed and settled between the concerned financial institution and the borrower. There are multiple types of loan agreements that the government supervises.
However, before planning to apply for a personal loan, borrowers must learn about the agreements and associated terms and conditions. Let’s take a look at them:
- Lender’s credibility
There are numerous financial institutions in the market offering different personal loan interest rates. Some lenders make tempting offers to attract borrowers. However, one must verify the lender before choosing the offer. This way, one can learn about popular personal loan scams and avoid them when borrowing.
- Loan utilisation
It is essential to check whether the loan agreement specifies the utilisation of a personal loan or not. Ideally, the loan document must state that the funds can be utilised for legal purposes without any limitation. One can use the finances to fund his/her child’s education, renovate a home, fund business expenses, etc. However, if the document does not specify such events, borrowers must check before signing the agreement.
- Check interest rate
Interest rates always play a significant role when applying for a personal loan. However, the flat rates offered to borrower can be misleading because there can be hidden charges, thereby increasing the interest rate against the loan. Likewise, if interest rate is evaluated on reducing balance method, one will determine that the actual rate is comparatively lower than the one in the loan agreement.
However, one can also clear his/her doubt by using a personal loan EMI calculator for free. Such online tools are available on most lenders’ websites for free. To know how one can use a personal loan calculator, visit the website and follow the steps accordingly.
- Eligibility and documentation
Since personal loans fall under the unsecured category, lenders extend certain eligibility parameters and require relevant documents from borrowers. By meeting these parameters, borrowers can negotiate with lenders for better interest rates. To enjoy hassle-free loan approval, individuals can choose reputed lenders like Bajaj Finserv, extending the following simple eligibility parameters that can be easily met:
- One must be aged between 21-67 years
- Must be a resident of India
- CIBIL score should be 750 or above
- Salary requirement is based on the job location
Apart from these, borrowers need to provide the following documents:
- KYC documents
- Employee ID card
- Bank account details
- Additional charges
The borrowing cost personal loan does not end at the interest rates, prepayment or foreclosure charges. There are various other charges that borrowers need to know when they borrow money online such as penal and statement charges, processing fees, etc. Therefore, it is essential for borrowers to learn about the personal loan terms and conditions related to several charges to avoid borrowing an expensive loan.
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Apart from these, existing borrowers of leading financial lenders like Bajaj Finserv can also avail pre-approved offers on a wide range of financing options, such as business loans, personal loans, credit cards, etc. Such offers can significantly reduce the hassle of documentation and save time. Therefore, borrowers can check their pre-approved offers by submitting their names and contact information.
To sum it up, after learning about the terms and conditions, borrowers must choose a reliable financial institution when planning to apply for personal loans online. Nonetheless, it is always wise to conduct thorough market research and ensure a cost-effective and improved borrowing experience.
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