A loan is the lending of money to a borrower with the underlying premise that the borrower will return the borrowed principal amount along with pre-decided interest within a specific timeframe. Loans are of various types, but in the broad sense, they fall into two categories – secured and unsecured loans. A secured loan needs a collateral or an asset as security. So, in case you default in repayment, the lender has your assets to rely on and close the loan. Unsecured loans do not require the pledging of collateral or asset. Because lenders have nothing to fall back on in the event of default, unsecured loans have higher interest rates than secured loans. Unsecured loans include short-term business loans, Flexi loans, education loans and the most popular of them all – personal loans. Read on to know how you can apply online for personal loans and the benefits of online loan applications.
A personal loan is a kind of unsecured loan that allows one to borrow funds for a specific tenure from a bank or non-banking financial company (NBFC). A personal loan is one of the most popular loan types as it is collateral-free. It does not require the pledging of a personal asset like a home, car, or insurance policy to serve as security or guarantee. However, the lender charges higher interest rates on personal loans to cover the increased liability. The general interest rate starts from 10% per annum and can go up to 15% to 20%, depending on the lender. You have to pay the principal amount and the interest charged during the repayment tenure through monthly payments or EMIs. Personal loans have a repayment tenure of 1 to 5 years. The maximum personal loan amount is in the hands of the lender, but general loan sanction amounts range from Rs. 25 lakhs to Rs. 60 lakhs. Most borrowers now apply online for personal loans because of the many benefits of online loan applications.
When you apply online for personal loans, will your loan application will likely get approved quickly. You can get the loan amount within a matter of a few days or hours as opposed to a few weeks in an offline application. There is also an instant approval/ disbursal feature that ensures your loan gets approved and disbursed to your bank account within the same day and sometimes, within a few hours.
One of the core benefits of online loan applications is the minimal documentation required. The entire process becomes hassle-free as the bank or NBFC requires the submission only of a few documents. The documents include:
Before you apply online for personal loans, you have the liberty to compare various personal loan options from several lenders. You can find a personal loan lender offering you the best, most competitive interest rates. You can also check your loan eligibility or make soft inquiries without hurting your credit score. For any loan, the lender will check your CIBIL score and credit history to see your repayment capacity. Ideally, lenders require a minimum credit score of 750 but some lenders even sanction loans for scores 650 and above.
When you apply online for personal loans, you do not have to go down to the bank or NBFC to submit the documents as the entire process from application, verification, and disbursal is paperless. You can visit the lender’s website and fill in the application through step-by-step guidance right from the comfort of your home. One of the best benefits of online loan applications is that it is accessible round the clock.
Many lenders have their own user-friendly apps or personal loan apps that you can link to your bank account. You can manage every aspect of your account – right from tracking your spending, to paying your monthly EMIs for the loan and accessing dedicated customer support. You can upload documents and receive funds all in a matter of minutes.
A tool you can use before applying for a loan online is the free EMI calculator. An EMI calculator helps you assess how much you must pay towards a loan after considering factors like loan amount, tenure, and interest rate. You can input various loan values into the EMI calculator and ultimately get an accurate personalized quote suited to your budget and needs. You will also get a clear breakup of your EMIs. All you must do is visit the EMI calculator section on the lender’s webpage and enter the desired loan amount, interest rate, and tenure.
Lenders have a general standard when it comes to the eligibility criteria for personal loan applications. These include:
There are no cons to online loan applications, only pros! Applying for a loan online is becoming the golden standard, and it is rare for a lender to not have a digital space for loan applications. At Poonawalla Fincorp, you can apply online for a personal loan or any other loan in easy steps and get your funds disbursed to your bank account the same day. You can also get guidance on how to go about the process.
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