A personal loan is no doubt the best loan option available in the market. But there are a number of doubts in our minds that are often left unanswered. There's no one to guide because a lot of banks don't have customer service facilities. And we often proceed to apply for this loan option without getting clear answers.
But it's very important to understand all the factors that are associated with a personal loan and how they will impact other factors (like credit score) that can affect our future loans. So here we'll answer some frequent questions asked by customers below:-
How can I use the funds I've borrowed from a personal loan?
The funds you've borrowed from a personal loan can be used for multiple purposes like:-
Wedding: Weddings are a momentous event in India. And there are multiple expenses incurred during this event. So to cover all the expenses you can easily get funds by applying for a personal loan facility.
Holidays: We all deserve a vacation. And if you're planning to go on a vacation then you don't have to think about using up your savings. You can easily get funds by applying for a personal loan facility at any bank or financial institution.
House Renovation: We all need a change in scenery. So if you're planning to remodel, restructure, redesign or renovate your house. Then you can use the funds you've borrowed from a personal loan.
Medical Bills: If you want to cover all your hospital bills. Then you don't have to go too far, you can easily apply for a personal loan facility at the comfort of your home and get funds immediately disbursed after the verification process is done.
Debt Consolidation: It's crucial to repay all your debt, credit and loans on time. Credit bureaus keep complete track of your repayment history. So if you're currently struggling to repay your loan amount then you can apply for a personal loan facility and use the funds you get through this loan for debt consolidation.
You can calculate your repayment structure using some online tools like an EMI Calculator for Personal Loan.
How do I qualify for a personal loan facility?
Banks are very strict with their personal loan eligibility criteria. You have to meet certain criteria to be eligible for this loan. Although the eligibility criteria differ from one bank to another. But there are some factors that remain common for every bank.
The basic eligibility criteria are:-
Age: The minimum age required by the bank is 21 and the maximum age is 75.
Employment Status: Both Self-employed individuals and salaried individuals can apply for a personal loan facility.
Work Experience: A work experience of a minimum of one year in your profession is required.
Income: The minimum income required is INR 10,000.
Credit Score: 750 and above.
Would a personal loan affect my credit score?
Yes, your personal loan has a direct impact on your credit score and vice versa. A lot of banks use credit scores as their primary eligibility criteria. So you can only get your application approved if you have a high/excellent credit score. A low credit score can either lead to rejection of your application or you'll be charged with a high SBI Personal Loan interest rate for your salary account. So it's important to maintain a decent credit score to get your application approved.
You can also use this loan as an opportunity to increase your credit score. You'll just have to repay the loan instalments on time and you'll notice a change in your credit score after a certain time.
What documents are required for a personal loan?
The entire documentation process of a personal loan is very quick and effortless.
The basic KYC documents you have to submit are -
Identity proof: Aadhar Card, Pan Card, Passport, Driving License, Voter ID Card, etc.
Address proof: Water Bill, Telephone Bill, Electricity Bill, Gas Bill, other Utility Bill, etc.
Income proof: Payslip, Bank Statement, Form 16.
Employment proof: Offer Letter, Approval Letter.
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