The small personal loans are the need of the hour- and why not? The costs of products and services have increased greatly in recent years; forcing people to pile up heaps of debts under their belt. Further, many-a-times, people even find it difficult to relieve the medical expenses on their own. The personal loans are provided by the new-age financial institutions at way lower interest rates than the ones given out by the traditional financiers and loan sharks.
There are a number of advantages of opting for these loans, such as:
- A personal loan is unsecured in nature; thus, you can not only consolidate your existing debts but even choose to make use of the money to relieve your medical bills, as well as travel to distant places.
- The repayment of an unsecured loan is done in the flexible form of EMIs. These installments are calculated on the basis of the principal amount, interest rates, and repayment tenure.
- The financial institutions also provide the borrowers with an EMI calculator, to help them calculate their amount of small personal loans.
You can easily apply for an unsecured loan through a bank or an NBFC (non-banking financial institution) through the traditional offline methods or through the new online ones. However, the eligibility criteria that you need to fulfill in order to obtain a personal loan are here as follows:
- Financial stability: The banks and NBFCs check your income source and job stability before sanctioning the urgent personal loan amount. The reason being, financial institutions want to ensure that you will be able to repay the borrowed amount without defaulting on your payments.
- Work stability: Before applying for a personal loan through the new-age financial institutions, ensure that you have been working with your current organization for at least 2 years. This will encourage the financial institutions to sanction your loan amount.
- The reputation of the organization: The financial institutions also evaluate your employer’s foothold in the market. After all, if your organization has a good reputation in the market, then the chances of your growth become higher; thus, helping you to repay the loan amount swiftly.
- Credit score: Banks and NBFCs (non-banking financial companies) look into your credit score and history to gauze your loan repayment capability. Thus, ensure that you have a credit score of more than 750 before you decide to apply for small personal loans.
How to improve your eligibility?
You can easily improve your chances of obtaining an urgent personal loan amount by following these steps:
- Repay all of your current and previous debt on time.
- Compile all the documents required (make sure that you don’t miss out any of them).
- Let the financial institutions know about your loan repayment defaults beforehand (if you have any).
Hope this article helps you to obtain a personal loan easily. Further, one must remember that the eligibility criteria of each and every financial institution vary from one another. Thus, the best thing to do would be to contact the particular financial institution or check through the aggregator sites.