Personal Loans are a popular choice when it comes to big life purchases. They provide a convenient way to arrange money for funding your next trip to renovate homes. Applying for them is an obligation and a commitment. So before you apply for Personal Loans, applicants should research and analyse all the available options before deciding. Ask yourself a few questions to evaluate the needs like low interest Personal Loan.

What is the principal amount?

Every bank sets the minimum and maximum borrowing Loan limit depending on your creditworthiness. Personal Loan amount ranges from Rs.10,000 up to Rs. 30 lakh. Only apply for the amount you can quickly repay. Also, ensure your debt-to-income ratio is low and always within acceptable limits. Some banks may process your application and transfer your amount on the same day.

Some may take 48 to 72 hours, while others take longer. So, consider all these delays when deciding on a timeline for the Loan repayment online.

What duration works for me?

Following the disbursal, you need to repay the Loan in equated monthly instalments within 30 days. Your chosen tenure and the Loan amount affect the interest rates and monthly instalments. Since Personal Loans are usually short-term, the repayment duration can range between 12 to 60 months, depending on the bank and your credit history.

How are interest rates determined?

The Personal Loan interest rate depends on various factors, including your credit scores, principal amount, and tenure. Generally, having a good to excellent score helps you secure the lowest interest rate. Before applying for the desired product, check your credit history on the agency’s portal.

What are the other associated charges?

Most banks charge 2% to 3% of the borrowed amount as processing fees when you apply for Personal Loans. However, the percentage varies. Also, if you prepay your Loan, they may charge you prepayment penalties. Therefore, thoroughly check the terms before confirming the scheme and submitting your documents.

What documents are needed?

All banks ask for various documents when you apply for an online Loan, based on whether you are salaried or self-employed. They verify your identity, residential details, income details, and repayment behaviour by analysing your credit history.

Why are credit scores essential?

Most banks evaluate you based on your credit and repayment history. They want borrowers with excellent credit scores. If your score is high, the chances of approval are better. You can also apply for Instant Loans and meet your demands instantly. A good credit history also helps speed up the entire approval process since it proves that you are trustworthy and disciplined.