Personal Loans are unsecured loans that financial institutions offer applicants seeking funds for their own needs. Finance companies use the applicant’s credit score, income, repayment history, and other parameters to evaluate their loan eligibility.
Personal Loans have been in India for a long, but they have gained extreme popularity over the last few years only, especially among salaried employees.
Let’s look at why a Personal Loan for salaried has been so much in demand these days.
Attractive Interest Rates
Interest rate is the first thing most borrowers look at while applying for Personal Loans. Currently, Personal Loan interest rates from NBFCs are very low. However, the final rate depends on the applicant’s income, employment, repayment capacity, and other parameters.
Aspiring borrowers can compare loan schemes from different NBFCs and opt for one offering the maximum loan amount at the lowest interest rates. Furthermore, they can upload their documents online or provide their KYC details to complete the verification in minutes.
That means they get the desired loan amount directly into their bank account without visiting the financial institution’s office even once.
Hassle-Free Loan Processing
Traditional loan processing is slow, requires a lot of paperwork, and takes several days for approval and disbursal. There is no guarantee that the lending institution will accept the application and disburse the loan on time.
However, since the advent of digitally-advanced NBFCs, the online Personal Loan application procedure takes place within minutes. Loan seekers can visit NBFC’s website immediately and apply for quick loan approvals.
No End-Use Restrictions
A Personal Loan for salaried professionals can be used freely for any purpose, unlike a vehicle or Home Loan, which the borrowers can only use for a certain purpose. Borrowers can use a Personal Loan for any financial requirement, be it for a vacation, wedding, home renovation, medical emergency, education, etc.
A Personal Loan is readily available without collateral, which is why more people borrow them these days. Since these are unsecured loans, borrowers need not provide any guarantor, security, or collateral to get loan approval.
The borrower’s capacity to repay the loan within the loan tenure is the primary factor that loan providers consider while evaluating Personal Loan applications.
The typical repayment period for Personal Loans is 12 to 48 months. Borrowers may choose the loan term that best suits their needs. However, they must know that interest rates for longer tenures are higher than those for short-term loans.
Instant loans with flexible terms are simple to repay because borrowers can choose a repayment term with budget-friendly EMIs. Moreover, making timely payments also raises their credit score, making them eligible for more loans in the future.
Eligibility requirements for Personal Loans are clear and simple. Applicants must satisfy the following criteria to qualify for a Personal Loan for salaried
- The applicant should be at least 21 years while applying for a loan and a maximum of 58 years at loan maturity.
- The applicant should have a credit score of 630 or above.
- The loan seeker should be an Indian citizen.
- They must have at least one year of total work experience and at least six months of stable employment in their current job.
- The applicant must have a minimum monthly earning of ₹ 20,000 or more.
Minimal Documentation Requirements
Since Personal Loans are unsecured, borrowers do not need to provide too many documents to apply for a Personal Loan online. In fact, Personal Loans are so much in demand because they demand minimal and necessary documentation.
To apply for a Personal Loan, they only need to provide basic documents, including their address, income, and identity proof, besides a passport-size photograph.
Personal Loans have become very popular among salaried employees for various reasons. Their appealing interest rates, collateral-free availability, and easier online accessibility work in their favor.
A Personal Loan for salaried professionals provides several advantages to the borrowers, as mentioned above. So, now that you know them, apply for a Personal Loan to achieve your short- or long-term goals.
About the Author
Amaira Sharma is a finance expert and former business growth strategist who has more than 8+ years of experience in the industry, now she helps others to get better financial stability and standards. She loves to write useful tips on personal finance and businesses.