A personal loan is an emergency fund that gives you money to meet big expenses related to education, wedding, vacation, home renovation, or literally anything else. Over the years, there has been a rise in the number of individuals applying for a personal loan. As a result, banks have become more vigilant about the loan approval process. Having said that, let’s look at some of the common problems you may face while applying for a personal loan online.
This is one of the most common reasons for not being able to get a personal loan. Make sure that you fill in all the details accurately in the application form as the bank will go through every detail, verify your credentials and check your credit score. In case there’s any disparity in the information provided in the application and the one fetched by the bank, the chances of loan rejection increase.
Before saying yes to a personal loan, it is always wise to check and compare interest rates. Talk to multiple lenders before accepting an offer. The simplest way to do so is to check the interest rate and EMI for a personal loan on the calculator of the bank’s website. For example, IndusInd Bank has an online loan calculator wherein you can enter all the details and it will show the interest rate as well as monthly EMI you need to pay.
All financial institutions check the credit score of the applicant before approving the application. If your credit score is low, there’s a possibility that the bank will not approve your application. This will again impact the credit score. Thus, it is important that you work on your credit score before applying for a loan.
When you visit a branch to apply for a personal loan, you will have to submit loads of documents such as identity proof, address proof, bank statements, income proof etc. This step can, however, be eliminated by applying for a personal loan online. IndusInd Bank follows a 100% paperless process for personal loan approval. You can fill out their loan form online and save yourself from the hassles of paperwork.
Other Problems Faced
Apart from the above-listed problems, there are other issues individuals face when they decide to go for a personal loan.
Deciding the loan amount is a common problem faced by borrowers. Some banks might offer personal loans of up to 20-25 lakhs, but that doesn’t mean you have to take the entire amount. Decide how much amount is actually required and what’s your payback capacity. Remember, you have to pay monthly EMIs along with interest.
Choosing a lender is another problem area. There are many banks and financial institutions offering personal loans, but how do you decide which one to go with? Compare lenders on different criteria including interest rate, eligibility criteria, documents required, repayment flexibility, approval tenure, and customer experience. This will make your task easier.
Having a prior idea of the problems faced when applying for a personal loan will make things easier for applicants.