When you need extra money for family and personal emergencies such as a wedding or hospitalisation, you might decide to go for a personal loan. Personal loans are a convenient way of getting additional funding because they require fewer documents and are processed faster than any other retail loan.
There are several ways to apply for a personal loan:
If you already have an account with the bank from where you want to take the loan, the processing would be faster. Eligible customers can also get instant loan approval and have the loan amount remitted to their account within a day or two.
The process of sanctioning of a personal loan is simpler than property loans such as home loan and car loan. This is because, in case of property loans, the bank has to verify not just your financial information, but also the credibility and eligibility of the asset that you are purchasing with the loan amount. For personal loan, you are the collateral security yourself, so the bank has to do a background verification only on you.
The two key elements in ensuring approval for your personal loan application are to maintain a credit score of 750 or more, and to ensure that you provide all the documents sought by the bank. Once the loan is availed, the onus of repayment lies with you and the bank can levy penal interest on outstanding balance if EMI is not paid on time. If you miss several EMIs, the bank can also take legal action.