How do I receive a Personal Loan without going to a bank?

With digital advancements in the financial sector, you can now apply for a personal loan online with reputable banks and NBFCs. In doing so, you can get the best offers, as per your eligibility and requirement, from the convenience of your home. While the online loan application process is easy and convenient, you must follow a few steps to get the full benefit. Read on to know how to get the best offer and apply for a personal loan online in just a few steps.

Compare Interest Rates Offered by Various Lenders

Most banks and NBFCs offer personal loans online, and you can get all the key details from their websites. This includes information pertaining to the personal loan interest rates, loan terms, and more. You can also calculate your monthly instalments using tools like the personal loan EMI calculator.This calculator helps you compare loan offers and different terms to find the ideal offer. All you have to do is input the following three parameters:

1. The loan amount you plan to borrow
2. The tenure
3. The applicable interest rate

Within seconds, you can get the monthly repayment amount payable. You may even try various combinations to arrive at the right EMI amount that you will be able to manage without overburdening your finances. In fact, finding the best terms for you will help you identify lenders that fit your criteria. This, in turn, will inform your borrowing decisions to ensure to get the best deal.  

Check the Eligibility Criteria and Document Requirements

Once you have compared various lenders offering affordable interest rates, you need to check the eligibility criteria for hassle-free loan approval. This is important because checking your eligibility beforehand can save time and effort, and help avoid unnecessary rejections.

There are various parameters based on which lenders can assess your profile. Some of these include your:

1. Credit score
2. Age
3. Type of employment
4. Monthly income
5. City of residence

As a personal loan is an unsecured form of credit, lenders rely on your credit history and score to assess whether or not you are a financially responsible individual.

Here’s the eligibility criteria you must adhere to when applying for a personal loan:

1. You must be an Indian citizen
2. You must be between 21 and 68 years of age
3. You must have a credit score of 750+
4. You must have a minimum monthly income of ₹10,000

You must also provide all essential documents to get approval. Make sure you submit all the paperwork needed, as mistakes can delay the loan processing.

Here are some documents you need to submit when you apply for a personal loan.

1. Proof of Identity: Aadhaar card, PAN card, voter ID, passport or driving licence
2. Proof of Address: Aadhaar card, passport, ration card, driver's licence, or utility bills
3. Income Proof: Latest bank statement for the last 6 months, proof of employment, 3 months’ salary slips, and the last two years' ITR

Depending on whether you are self-employed or a salaried individual, lenders can ask for additional documents. With most modern lenders, you can upload these documents online. As such, you never have to visit a physical branch to get your loan.  

Maintain a Good Credit Score

Having a good credit score is crucial for a personal loan, as it is an unsecured loan. Your credit score is based on your credit report and repayment history, and is a marker of your creditworthiness.

A borrower with an optimal score of 750 or higher is considered the ideal applicant, and lenders will approve loan requests quickly. So, before you apply for personal loan, check your credit score and see if you make the cut. If you have a good score, apply online and get the loan instantly.

Read the Terms and Additional Charges

You can apply for a personal loan online with just a few clicks to get instant approval. When doing so, exercise caution, as there are chances that you may skip reading the important terms and conditions.

This can increase your borrowing costs, as lenders may include hidden fees and other charges. Remember, the best loan offer is the one that does not exert undue pressure on your finances. So, check all the loan terms before you sign the offer.

Thanks to digital lending provisions, getting a loan without visiting a lender’s branch physically is possible. Not just that, the process has been simplified down to a few clicks, and this only means that you need to exercise caution. Many lenders will offer funding in minutes, but these offers may have unfavourable terms.

So, to avoid any issues when availing funding, do your research before you apply for a personal loan. Most leading lenders have online processes, and it is very likely that your lender will offer a digital loan.