The pandemic has caused the economy to crash. COVID-19 has caused considerable financial strain to all citizens worldwide. Cashflows have stopped due to the loss of jobs and businesses. Social distancing has forced us to all stay at home and hence, people are unable to manage their expenses and need emergency funds.
This outbreak has also put us at a considerable health risk and a lot of us are facing medical assistance and expenditure as well. It might not be right to fall back on our savings and dilute them. A personal loan, thus, comes to the rescue.
The greatest advantage of personal loans is that you can use it for any reason or requirement. Whether it be an urgent medical requirement, sudden travel needs, or any unprecedented, unaccounted expenditure, personal loans will cover your costs.
Here are 5 tips to ensure your loan gets approved
- Compute your requirement
- Understand and calculate your cash flows. Write down your monthly expenditure and figure out what kind of amount will you be left with at the end of every month. Based on this alone, you will be able to account for the kind of personal loan EMI that you shall be able to pay. Taking a personal loan requires you to be regular in paying the installments due to the settlement. Also, decide on the tenor of the repayment. The longer the tenor, the lower your payout. If you opt for an amount that exceeds your capacity to pay, chances are that the loan application would get rejected
- Market Research
- Scourge the market for better interest rates and understand the requirements. Every bank might have a set of policies that they need to adhere to. Therefore compare all your options before choosing your lender
- Eligibility
- Personal loans eligibility criteria that you need to meet. Basic requirements include – Indian citizenship, age above 21 years, the monthly net salary of a fixed amount, job stability, net profitable income for self-employed professionals, etc. Understand the criteria and ensure that you meet the parameters
- You will be required to present documents to evidence the same –proof of age, address, citizenship, example – Aadhar, pan card, passport, etc and income proof such as salary slips, bank statements, tax returns, form 16, etc.
- Make sure that all the details mentioned in your application comply with the documentary proof you provide
- Credit Score
- Your credit score is your financial health. Simply put, the higher your score the more trustworthy and credible you appear to be. Hence, always work on maintaining a healthy and high credit score. A low score is construed as an indication of financial trouble and an undependable customer. Lenders view this negatively
- Regulate and lower your debt
- Do not make multiple applications and ensure that your liabilities are under control. Most of the lenders have data to check your financial history and frequent applications for loan or too many loans already in your name does not give them confidence in your repayment capacity
- Hence do not get caught in a debt cycle and ensure that you pay off your loans and regulate your debt before applying for a personal loan
The bottom line is that personal loans are a great way to manage your immediate and unprecedented financial strains. They will not affect your savings or investments and help you tide over your difficult times easily. However, you must keep in mind the above points to ensure that your application does not get rejected and you receive your loan amount in a timely and prompt manner.