A personal loan is often the best choice when you are in need of immediate capital. Today, availing a personal loan from any bank or NBFC’s (Non-Banking Financial Company) is much less of a hassle as compared to availing any other type of loan. As a result, people often apply for personal loans for a number of reasons, including but not limited to ̶ funding their travel plans, refurbishing their home, starting a new business, organizing a grand event, or paying urgent medical bills. A major advantage of personal loan is that it is a type of ‘unsecured loan’, meaning that you do not have to guarantee any collateral against it. This is one of the key reasons, why some people repeatedly apply for taking a personal loan. However, how frequent can one avail this facility? Is it beneficial to take a personal loan more than once?
Read further to know about the various advantages of availing a personal loan, how often can you apply for a personal loan, and the important things to keep in mind before applying for a personal loan.
· It can be availed for any personal reason
· Since no collateral is asked as a form of security against it, availing a personal loan becomes much easier than any other type of loan
· Minimal documentation is required for initiating a personal loan request
· If you avail a personal loan and manage to pay all the EMIs on time, it reflects positively on your credit history. This helps create a reliable image of you in the finance market and makes availing any further credit much easier.
· Personal loans can help consolidate existing debts
· Personal loans can be used as a source of an emergency fund
Ideally, there is no limit on availing a personal loan facility. However, it all really depends on your existing financial capacity and the nature of your credit score. If the personal loan provider feels that you are financially capable of repaying the personal loan, despite having a debt of an existing loan, he/she may grant you another personal loan. However, if you have a record that shows that you have defaulted on any of your previous loan EMIs, it could reflect very poorly on your credit score, making personal providers averse to granting you any further loans.
· Make sure that you have a decent credit score
· Not default on any previous loans
· Maintain a healthy debt-to-income ratio before applying for any further loans
1. If You Are Applying for the First Time for a Personal Loan, You Must Keep the Following Things in Mind:
Before approaching any banks or NBFCs for a personal loan, make sure that you full-fill all their basic eligibility criteria. For instance, to avail a Bajaj Finserv Personal Loan, you need to fulfill the following eligibility criteria:
· You must be an Indian Citizen
· You must be within an age-group of 23-58 years (for salaried individuals) or 26-66 years (for self-employed individuals)
· The minimum-take home salary threshold for salaried individuals must be within the range of INR 27,000 – INR 37,000 (depending on whether they are residing in Tier I or Tier II cities in India)
· For self-employed individuals, a minimum 3 years of business vintage is a must.
In order to initiate a personal loan request, you need to submit certain KYC (Know Your Customer) documents. Make sure that you have the following documents in order:
· Identity Proof - Aadhar Card, PAN Card, Passport, etc.
· Residential Proof – Electricity bill, Telephone bill, etc.
· Income Proof – Bank Passbook, Salary Slips, Tax invoice, etc.
Almost all the leading personal loan providers have an online presence. You can visit their websites to know the interest rates at which they are offering a personal loan. You can use this information to compare the interest rates of different personal loan providers and choose the one that best suits your financial needs.
Equated Monthly Installments (EMI)
Depending on your eligibility criteria, the total amount to be borrowed, and the rate of interest at which you are availing the personal loan, your Equated Monthly Installments (EMIs) are calculated. These EMIs need to be paid over a decided tenure for your personal loan repayment. You can make use of online tools like EMI calculators or Eligibility Calculators to estimate how much EMI you will have to pay for your borrowed personal loan.
2. If You Are Planning to Apply for a Personal Loan More Than Once, You Must Keep the Following Things in Mind:
· Taking a personal loan repeatedly can lead to the impression that you are in a lot of debt or incapable of effective financial management. Thus, although there is no limit on the number of times you can take a personal loan, try to ensure that you keep your personal loan requests to a minimal.
· If you are repaying more than one personal loan at a time, it would mean an increase in the number of EMIs to be paid. This could cause severe strain on your monthly budget. Therefore, make sure that you avail a personal loan by carefully evaluating your financial capabilities of repaying it.
Whether you are taking a personal loan for the first time or repeatedly, certain discretion with respect to your financial needs is always advised. Before signing on the dotted line, make sure that you take all the above-mentioned parameters into consideration to ensure a sound financial decision. To know more about exclusive offerings on instant online personal loans, visit Finserv Markets today!
Finserv Markets, from the house of Bajaj Finserv is an exclusive online supermarket for all your personal and financial needs. Loans, Insurance, Investment and exclusive EMI store, all under one roof- anytime, anywhere!