A personal loan is an emergency fund that gives you money to meet big expenses related to education, wedding, vacation, home improvement or anything else. Over the years, the number of people applying for a personal loan has increased. As a result, banks have become more vigilant about the loan approval process. That said, let’s take a look at some of the common issues you may face when applying for a personal loan online.
Rejection of application
This is one of the most common reasons for not being able to get a personal loan. Make sure to fill in all the details accurately in the application form as the bank will go through all the details, verify your credentials and verify your credit score. In the event of a discrepancy between the information provided in the application and that retrieved by the bank, the risk of loan refusal increases.
Before saying yes to a personal loan, it is always a good idea to check and compare interest rates. Talk to several lenders before accepting an offer. The easiest way to do this is to check the interest rate and EMI for a personal loan on the bank’s website calculator. For example, IndusInd Bank has an online loan calculator where you can enter all the details and it will show the interest rate as well as the monthly EMI you need to pay.
All financial institutions check the applicant’s credit rating before approving the application. If your credit rating is low, the bank may not approve your application. This will again have an impact on the credit rating. Thus, it is important that you work on your credit score before applying for a loan.
When you go to a branch to apply for a personal loan, you will need to present many documents such as an identity document, proof of address, bank statements, proof of income, etc. However, this step can be removed by applying for a personal loan online. IndusInd Bank follows a 100% paperless process for the approval of personal loans. You can complete their loan form online and save yourself the hassle of paperwork.
Other problems encountered
Apart from the problems listed above, there are other problems that individuals face when deciding to take out a personal loan.
* Deciding on the loan amount is a common problem faced by borrowers. Some banks may offer personal loans of up to 20-25 lakhs, but that doesn’t mean you have to take the full amount. Decide on the amount actually required and your ability to repay. Remember that you must pay monthly EMIs with interest.
* Choosing a lender is another issue. There are many banks and financial institutions offer personal loans, but how do you decide which one to go with? Compare lenders on different criteria including interest rate, eligibility criteria, required documents, repayment flexibility, approval duration and customer experience. This will make your job easier.
Having a prior idea of the problems encountered when applying for a personal loan will make things easier for applicants.