Know The Interest Rate And Eligibility Requirements For a Digital Personal Loan
According to a recent survey, the personal loan segment experienced a steady growth of 20%. An unsecured credit type, personal loans remain a popular financing solution even during an economic slowdown because of several attractive features. Like, it comes with no restrictions to end-usage, making it suitable for a variety of funding needs such as medical emergencies, higher education funding, debt consolidation, and so on.
Furthermore, financial institutions also provide these advances as digital personal loans to encourage more borrowers to avail of them conveniently. One can thus apply for a digital advance from the convenience of their homes with minimum hassle. Eligibility and document requirement for these advances is minimal too, allowing individuals to obtain them conveniently.
Eligibility criteria for digital personal advances
Borrowers should check the personal loan eligibility requirements before applying to improve their chances of approval. The essential eligibility conditions that applicants must fulfil before opting for a digital personal loan are given below.
Nationality – They should be residing citizens of India.
Age –Applicants should be within the age range of 23 and 55 years.
Employment status –They must be salaried applicants employed with a reputed MNC or private or public company.
CIBIL score – They should hold a minimum CIBIL score of 75.
Additionally, applicants should also fulfil the minimum income criteria specified for their city of residence before applying for a personal loan online. While these were the standard requirements, the criteria asked by each lender may vary.
Interest rates on digital personal advances
Several lenders provide online personal loans at affordable interest rates and charges. Depending on their suitability, borrowers can opt for a fixed or a floating rate for interest accrual on their personal loan.
However, the interest rate offered by a selected lender can differ from one applicant to another. They must, therefore, know the factors affecting the personal loan interest rate and opt for the following measures to avail of the advance at reduced rates.
Take measures for credit score improvement – CIBIL score is a measure of an individual’s creditworthiness and defines a lender’s risk. It is thus one of the essential criteria that lenders check before approving personal loan applications.
A high credit score suggests responsible credit behaviour, which not only improves an applicant’s personal loan eligibility but also creates scope for interest rate negotiation with their lender. Accordingly, knowing the things you can do to improve your personal loan credit score like making timely repayments and rectifying any credit report errors can allow you to negotiate for lower rates.
Maintaining an ideal FOIR –FOIR or fixed obligation to income ratio is a measure of one’s fixed obligations as a percentage of their total monthly income. It is a parameter used by lending institutions to determine an individual’s repayment capacity. A high FOIR burden one’s monthly finances and lowers their repayment capability.
Consequently, borrowers must try to limit their FOIR to 40 –50% and reduce it if possible to improve their loan eligibility. Lenders are also willing to provide low interest personal loans to borrowers with a low FOIR.
Now, while interest rates are an essential aspect to consider, individuals must also check other loan features before applying.
Some typical features of a digital personal loan include –
Flexible tenure – While availing a personal loan, borrowers can opt for a tenure of their choice extending up to 60 months.
Quick disbursal of the loan amount – Borrowers who satisfy the eligibility requirements can receive approval on their digital loan application quickly and the loan amount is disbursed to them shortly after such approval.
Application process – Individuals can apply for a digital personal loan by following the simple steps given below –
Step 1: Visit your lending institution’s official website.
Step 2: Navigate to the ‘personal loan’ section and access the online application form.
Step 3: Enter your personal, employment, and financial details in the form.
Step 4: Verify the information entered and submit it along with the necessary documents.
Lenders such as Bajaj Finserv further simplify lending with their document requirements reduced to minimal.
They also bring pre-approved offers to borrowers for a hassle-free loan processing. Besides personal loans, such offers can also be availed on several other financial products such as credit cards and business loans. You only need to enter a few essential details like your name and contact information to check your pre-approved offer.
Additionally, you can avail of personal loans at attractive interest if you have a pre-existing relationship with the lender. Nevertheless, opt for a digital personal loan only after comparing the interest rates and service terms offered by different lenders to arrive at the best funding option.