Things to Remember while Taking Online Personal Loans

In recent years, digital lending has become more prominent than traditional. On the edge of the covid pandemic, people needed contactless funds while stay safe at home. Here comes a boom in online personal loans. You can use digital media to apply for loans, pay your dues and manage your finances. You can proceed with this lending with various mobile applications and technologies for authentication and credit evaluation. When a transaction between borrower and lender occurs, a lender gives money to the borrower in exchange for some interest.

Still, some people prefer traditional methods, even when online personal loans rapidly increase. In terms of convenience, you get a much more upgraded experience of online personal loans than traditional ones. As there is an increase in city workers, it affects online loans too. They occurs a rapid growth in the digital market world which helps many lenders expand their organisation worldwide. Nowadays, it’s easy to get an online loan. And it has hoped to be a widespread one in the future too. You can get an instant personal loan through Buddy Loan.

This article will help you know more details about online personal loans.

Online Personal Loans

Online Personal Loans are unsecured loans provided by lenders with minimum documents followed by a quick approval. Use the loan for anything, including home renovation, travel, destination wedding, medical expenses, starting your business, paying consolidated debts, etc. You can’t predict when you will be in a situation that demands urgent cash. You can manage your finances without draining your savings with an instant online personal loan. In emergencies, opting for an online loan is a wise decision to take into account as it comes with low-interest rates and repayment tenure of your choice. You can apply via Buddy Loan, a loan aggregator, to avail more benefits like instant funds, easy EMIs, and attractive rates. Online loans are paperless as all the details are stored digitally. Thus, you can be free from lengthy paperwork.

Personal Loan

Features and Benefits of Online Personal Loans

Collateral-free -: You don’t need any assets to guarantee your loan. You can quickly obtain the loan online with a good credit score and proper documentation.
Flexible loan tenures -: Depending on your eligibility, you can get a loan amount upto 15 lakh rupees with a repayment tenure from 6 months to 5 years.
Minimal documentation: You need essential documents for verification, such as identity, address, and income proof.
24/7 availability -: You can get a loan anytime in this digitised period. You can directly apply from a mobile application or website of the related lender.
User convenience-: Technically, you can apply for a loan anytime from any part of the world. You only need a reliable lender’s official website or mobile application and a good internet connection. You are on the board to apply for a personal loan online.
No physical contact-: No need for you to go and visit a bank or person directly to apply. You can apply online by uploading the required documents through your smartphone. During the covid period, it became a massive relief as, at that time, people preferred to stay home rather than go out.
Easy approval -: As the process becomes digital, the verification finishes soon, and the approval will also occur quickly.
Flexible reason -: You can utilise the loan for any personal reasons. No one will demand the reason for the loan as it’s purely upon you to decide. You can keep your reason secret even if you want. Whether it is a medical emergency or higher studies, it doesn’t matter to lenders.
Better interest rates -: Usually, you will get interest rates starting from 11.9%. But if you have a good credit score, you will likely get a low-interest rate.
Quick disbursal -: Once your loan is approved, the lenders will transfer the amount to your account within 24 – 48 hours.
Faster process -: Unlike traditional loans, online loans applied through a mobile app or website are faster in application, verification and approval.

No hidden fee -: Other than a GST and processing fee, you will have no other fees.
Safety of your loan -: The details you share will be confidential from any third parties.

Online Personal Loan Eligibility

Most banks provide online personal loans with different eligibility criteria. Listed below are the most common eligibility factors that lenders examine.

Your citizenship – Are you an Indian?.
Your age should be between 21 to 60.
You must have at least one year of employment in your current working company.
Your monthly income should be above Rs.18,000.
If you are self-employed, you must have been in your business for over three years.
Your credit score should be above 700.

Know your credit score to get more benefits from an online personal loan. Check it on Buddy Score

Also Read: Personal Loan Eligibility: A Detailed Guide on Eligibility Criteria

Required Documents for Online Personal Loan

For applying for an online personal loan, listed below are the necessary documents.

Salaried Individuals

Identity and Age proof.
Complete the filled application with a photograph.
Address proof – Landline bill, utility bills(water/gas/electricity), Voter ID.
Bank statements for the last three months’.
Salary slips for the last three months’.
Income tax returns for the last three years’.

Self-Employed Individuals

Identity and Age proof
Duly filled application with a photograph.
PAN card.
Address proof – Landline bill, utility bills(water/gas/electricity), Voter ID.
Bank statements for the last three months’.
Salary slips for the last three months’.
Income tax returns with computations of the last three years.
Audited Balance Sheet and Profit & Loss statements for the last three years.

Things to Remember When Taking Online Personal Loan

Taking Online Personal Loans

During an emergency, opting for an online personal loan is a big commitment, which requires immense dedication from you to pay it back on time. Indeed, a properly maintained online personal loan is an answer for most of your financial troubles. There are certain things you have to notice while proceeding with an online loan.

Analyse the loan amount carefully -: Even Though digital loans are quick, you should always check your necessity and apply for only that much. It will help you avoid the tensions of extra EMIs in the future.
Check the partner -: Evaluate whether the lender from which you are planning to get a loan is a reliable one registered under RBI. Every online loan lending application has a connection with NBFCs. So collect the details regarding the certain NBFC and double-check it with the RBI official website.
Repayment tenure -: According to your monthly budget and income, you can select a tenure period from 6 months to 5 years. With an EMI calculator, check how much monthly due you have to pay for a specific tenure and proceed with what is best for you.
Check for hidden charges -: Make sure you pay only the essential fees for the loan approval. You have to pay only GST and a processing fee that varies from one another.
Looking for prepayment options is a must -: Even if you opt for a longer-term loan, you can still pay off the amount soon. But you should know if there are any prepayment penalties or charges.
Read the documents thoroughly -: Some fees will never disclose before the loan approval. Before applying, check the documents clearly to make them error-free.
Check before transferring documents -: You should check the lender’s identity before submitting the documents. Once after a proper KYC verification, share your documents with the lender. It will help you to avoid identity theft.
Monthly Income -: Your income is a fundamental factor determining your approval of a loan and the interest rates you get. A responsible person with a high income is likely to have greater repayment capacity than people with a low income. Usually, they can get a low-interest rate on their loans.
Credit Score -: It is an essential factor that lenders consider before approving a loan. A credit score mirrors your overall financial transactions, including your loans, monthly payments, credit behaviour, and past credit history. A higher credit score above 700 will highlight your credibility to the lenders. Eventually, you will get a low-interest rate also. A low score shows your poor credit history, which can affect your loan approval.
Pay off previous loans and debts -: It is most important to pay off your previous loans, overdue credit card bills, and monthly EMIs to get a good credit score. It will exhibit your credibility, which influences the lenders. Multiple loans at a time can be riskier for you.
Stay away from online frauds -: As the internet has been widespread, there are several online frauds too. While applying, if any non-verified application asks for your details, such as address, PIN, or bank account number, then beware of them.
Employer’s status -: If you work for a well-known, reputed organisation, you are considered more responsible for making on-time payments. Thus, you have a higher probability of much more flexible lending policies.
Debt-to-income ratio -: Debt-to-income ratio is the ratio of all debts divided by total income. You should maintain it well to avoid troubles in future. How much you earn and how much EMI you pay are substantial.
Relationship with the lender -: If you are a long-time customer of a bank with a good credit history, you are a trustworthy person to the lender. So you have a greater chance of getting low-interest benefits and quick procedures than a new customer.
History of defaults -: Like a credit score, you should check if there are any defaults in your credit history. If that is so, you have to pay high-interest rates, or you might get rejected for the loan. Lenders prefer people with mostly no defaults in their credit over the past 12 months.

Also Read: How Can You Get A Personal Loan Online Without Income Proof?

Conclusion

Choose online personal loans only when you are in urge for finance. So any troubles related to it can affect your loan application and approval and shatter your situation very poorly. So, whether online or offline, whenever you are applying for a personal loan, always check the above things carefully to avoid any tension and troubles in future. A small step can help you from more stumbling steps in future.

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Frequently Asked Questions

Q. Is it possible for an online personal loan with a low salary?
A. Yes, you can get a personal loan even with a low salary. Sometimes you might get high-interest rates.

Q. What is the tenure for an online personal loan?
A. You can get a repayment tenure of 6 months to 5 years.

Q. How long does it take for a personal loan disbursal?
A. Once your application is approved, the amount will be disbursed directly to your account within 24 – 48 hours.

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