We need money to fulfil any dream we have that we may not always be able to achieve because of financial limitations. But does that mean we should stop dreaming at all. With so much growth in the number of banks and financial institutions, it is possible to borrow money to fulfil one’s dreams.
Borrowing from friends and relatives is not a recommended way to raise funds for your use. Any delay in repayment can affect your inter-personal relations with them. Fortunately, some help is on the way. A loan lends you money when you need to cover important expenses for major life events, such as a wedding, higher education, vacation, or home improvement. A quick online personal loan also helps you when you need quick cash to handle any unplanned event. However, before applying for a personal loan, it is important that you know these six problems and knowhow to deal with them.
Some of the problems in life can be solved financially, but often there are situations where we may need more money than we currently have. In such cases, people borrow money from lenders such as banks and NBFCs. Among the loan options, Personal Loans are one of the easiest ways to get financing for travel, marriage, home renovation, and any emergency purposes. However, some people face rejection when it comes to their loan application process. So below are the Common issues faced by personal loan customers.
- FAILURE IN THE FIRST STAGE
Believe it or not, a lot of loan applicants do not even pass the initial stage of verification. They are rejected based on basic criteria such as age, income, poor bank guarantees, or supporting documents that do not meet lender's requirements.
One way to avoid such a situation would be to ensure the eligibility criteria of lending banks. When completing a loan application, you should be cognizantof statingall the details correctly. The bank will check your credit report and verify your details. If both parties are incompatible, there is a good chance your application will be rejected. It is also possible that your credit report confirmations are incorrect. You should rectify those mistakes immediately to avoid bank rejection.
- CREDIT SCORE
Your credit score is an honest reflection of your financial discipline and creditworthiness. And this is one filter where no bank compromises. Banks need to verify your creditworthiness before lending to avoid the risk of defaulting. No bank can invest in anyone unless they are sure of their ability to repay the loan.
As an applicant, what you can do before you apply for a loan is to regularly check your credit score and find ways to improve it. This will help to keep the credit score in your favor whenever you finally decide to apply for a personal loan.
As mentioned earlier, all banks and financial institutions do your credit check when applying for a personal loan
- STABLE SOURCE OF INCOME
No bank can lend money to a person who does not have a stable source of income to pay for regular EMIs for personal loans.Financial stability is very much important when it comes to lending money. If you change jobs regularly or do freelance work, chances are your loan application will be rejected.
No lender can lend money to someone who does not have a regular source of income to pay for a basic EMI for personal loans. When considering your loan application, one of the necessityto qualify is to have a standard source of income or business. If your income is lower than the lender's eligibility or if it fluctuates, your chances of getting a Personal Loan may decrease.
- CHOOSING A PAYMENT PERIOD
Most lenders allow you to choose therepayment tenor.You can choose a loan period of 12 months to 60 months or higher. However, many borrowers find it difficult to choose the right repayment timing. This is where the EMI calculator will help.
The EMI Personal Loan Calculator is a tool that you can use to calculate your EMI rating for the specific loan amount and loan period. Ideally, you should adjust the loan amount or loan period until you reach the amount of EMI you can afford each month. Remember, the longer the loan tenure you choose, the lower will be your EMI, but the higher will be your outgoing interest.
On the other hand, short-term loans result in higher EMI but savings on interest rates. Therefore, the term of the loan you choose depends on your income and your ability to repay.
- LOAN PERMIT
If you are applying for a personal loan, the main concern is whetheryour application will be approved or not. To increase your loan eligibility, you must first assess your creditworthiness and make sure you are fully compliant.
Next, check your credit score and make sure it is 750 or more, as your lender will rely heavily on your credit history to approve your loan application. If you follow these steps, you can be sure that you will get your loan approval in a short time.
- EMI MANAGEMENT
Once you have received your loan approval and have the amount of the loan deducted from your bank account, it is time to repay the loan at EMI and interest rate. You must plan your EMIs even before you apply for a loan. Have a sound budget, keep your expenses under control and prioritize your EMI payment above all other obligations. Paying EMIson time improves your eligibility for future loans.
- CHOOSING A LENDER
Many borrowers find it difficult to choose a lender. When it comes to simple personal loans, you will find hundreds of lenders out there, each claiming to be the best. However, since one size does not fit all, one lender is not the best for all borrowers.
You should compare lenders based on their loan amount, interest rate, repayment period, eligibility criteria, document requirements, customer service, and other parameters. Lastly, choose one that offers your required loan rate at a competitive interest rate with favorable terms and conditions.
So, if you are looking for a personal loan, Poonawalla Fincorp offers the best interest rates with quick personal loans online. Our application process, eligibility criteria, and documentation requirements are straightforward, and anyone can easily fill them out.