Saturday, December 3, 2022

5 Things to Keep in Mind While Applying for Personal Loan

A personal loan is a collateral-free unsecured loan that you can avail yourself of for any purpose. You can use it to fund a wedding expense, pay for hefty medical insurance, pay a sibling’s fee, and even use it for your home renovation, or even consolidate high-interest debts.

Although it is easy to apply for a personal loan nowadays, you need to factor in various concerns, such as the length of the tenure, interest rate, your monthly income, repayment capacity, and the impact it will have on your financial lifestyle. Often, manual calculations are time and labor-intensive and pose risks in miscalculations. With a personal loan EMI eligibility calculator, you can get details on what set EMI you will need to pay regularly at a set interest rate over a period.

Check Eligibility First

It makes sense to check your eligibility before taking out a personal loan online. There are various personal loan eligibility criteria that you need to check before you apply for one. For instance, if you are a salaried individual, the minimum age to apply for a PL is 21 years, and for self-employed individuals, it is 25 years. Also, for salaried people, their monthly income should be at least INR 25,000, and for self-employed individuals, it should be INR 40,000 (after tax).

Furthermore, a salaried person should have worked at least two years with at least a year with the current employer, while for a self-employed individual, it is 5 years of post-qualification experience. You can check the detailed eligibility criteria here. So, as per your current employment, age, and income situation, you need to use the personal loan calculator online after assessing your eligibility.

Affordability

Make sure that you are able to afford the monthly EMIs on your personal loan. When you apply for a personal loan, make sure that your EMI is less than 10% of your monthly salary. If it’s even slightly higher, then you may have a problem paying it back or creating a budget for it.

Repayment

You also need to make sure that you make your payment on time to the lender. Any default or late payment will affect your credit score negatively. Furthermore, if you are low on credit score, timely payments will ensure that you have a steady credit score growth.

Evaluate the tenure

If you choose a longer tenure, your EMIs will be lower, and if your tenure is shorter, you will have high EMIs. So, it all depends what is your repayment capacity. On shorter tenure, you will also have to pay less interest. Check IndusInd Bank’s website to understand your monthly repayment option to make a better financial decision.

Get it for the right reason

Although it is very easy to apply for a personal loan online and get instant approval on it as well, it doesn’t make sense to apply for it for any invalid reason. A personal loan is after all a debt that you need to manage and payback. Undertaking any financial responsibility is a huge step towards building a strong financial foundation, so make sure you apply for a PL for the right reason.

IndusInd Bank offers hassle free personal loans at the best interest rates. Check the website for more details.

 

 

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