Every person has a different financial requirement. However, if two things are common among the people, it is the growing expense and the need for instant cash in an emergency. Sometimes people do meet the expenses, sometimes They are just out of their finances
In these kinds of situations, a personal loan is one of the easiest options to explore. There are plenty of top lenders such as HDFC Personal loan, SBI personal loan or ICICI personal loan offer it at a decent rate.
However, before applying here is a small list of checklists you should follow. It will provide you a clear path regarding taking the loan.
The Types of Personal Loans
First, let’s begin with the basics. There are two types of personal loans available in the market. The secured and unsecured loans. For a secured loan, you need to present collateral. For an unsecured loan, there is no such requirement. The borrower’s risk assessment is done on rating credit reports and CIBIL score. The loan is offered to both salaried individuals and self-employed professionals.
- The personal loan numbers have increased due to digitalization.
- The cost to take the loan is easy, quick processing.
- NBFCs and loan apps are making the way into tier-2 or tier-3 cities.
The basic rule is the same as any other loan product. You take the loan without collateral and pay it back over the years with interest. More than the loan amount or the cheap interest choosing the right lender is equally essential. So, here is the checklist you should follow.
Why you need the loan – Start with clearing the loan purpose. It will help you to understand, which lenders you should focus, and which to avoid. Let’s say you are a freelancer or a businessman, then HDFC personal loan for self-employed could be a better choice compared to other lenders.
The loan amount – As the purpose gets clears, find out how much you need. This amount should be exactly what you need and a penny more. Because you may get the loan easily, however, the fact is there is interest on it. Sobetter you , take the minimal loan amount.
Credit report & CIBIL score – Now, . We are assuming here that you are aware about the basics of CIBIl scores. It is a financial health indicator. It ranges from 300 to 900. Here are the rating agencies you can contact to find out your score.
- Investment Information and Credit Rating Agency of India
- Credit Analysis and Research ( CARE ) Limited
- Acute Ratings & Research
- Brickwork Ratings India Private Limited
- India Rating and Research Pvt Ltd
- Informetrics Valuation and Rating Pvt. Ltd
Here is some lender’s score requirements as an example.
- HDFC personal loan requires a minimum of 650 score.
- Fullerton India required a minimum of 750 score .
- ICICI Bank requires a 700 score.
Which Documents you will need?
One of the best things about a persona loan is, it needed minimal documents company to any other loans. So, check various lenders’ documents requirement prepare them. Let’s take a look at HDFC personal loan for self-employed documents requirement.
- Identity proof
- Address proof
- Bank statement
- Financial documents
- Any other require documents
How many types of lenders are there?
Currently, there are 3 types of lenders offering personal loans in India.
- A big bank such as HDFC personal loan or ICICI Bank personal loan
- NBFCs such as Bajaj Finserv
- Loan apps such as LoanTap, MoneyTap
It is essential to find out the best lender to avoid any issues in the future. Do check with your bank or an NBFC, if they are willing to offer you a loan at a lower interest rate.