A Personal Loan for salaried professionals is usually termed pre-approved. However, not every salaried individual can qualify for a pre-approved loan. Sometimes it does not work out because the loan offer may not be suited to one’s requirements. Moreover, it also depends a lot on your relationship with the lending institution.
The term pre-approved is just a marketing approach because when you apply for it, you’ll discover a lengthy process from documentation to final approval of the loan. Therefore, there is nothing called pre-approved in the entire process. However, there are still many ways to avail of a Personal Loan in a less complicated manner. Here are some valuable tips for salaried professionals hoping to get a Personal Loan.
1. Choose Your Loan Amount Carefully
A Personal Loan for salaried people comes with specific terms and conditions. Sometimes you may come under the influence of the sales representatives and take a loan that is way higher than what you require. It will result in higher EMIs, and your monthly burden will increase as monthly instalments are higher. So first, calculate your requirements and see how much interest rate you can pay. Doing this will enable you to go for the amount you can afford to pay conveniently.
2. Know Your Eligibility Requirements
A Personal Loan for salaried individuals comes with specific terms and conditions, so it is essential to know your eligibility for the loan you are targeting. Apart from this, a rejected application will bring your credit score down and you may be flagged as a risky borrower. If your credit profile does not match the requirements, don’t apply for it, and always go for a lender who offers a flexible eligibility policy. The minimum monthly salary to qualify for a Personal Loan is as low as ₹20,000 and 2 months of steady employment. Also, you need to submit the last 3 months’ salary slips in the process.
3. Keep Your Credit Score Healthy
Your credit history and CIBIL score play the most crucial role in making you an ideal candidate for a Personal Loan. A lender will check your credit score and entire credit history before considering your loan application. If you fail to qualify for the minimum credit score, your application will be rejected outright. Moreover, as stated above, multiple applications reduce your credit score. So, the best way to proceed with a Personal Loan is to clear your existing debts and improve your credibility as a borrower. In addition, it is advisable to maintain an average amount in your bank account.
4. Choose Your EMIs Wisely
The Equated Monthly Installments (EMIs) should be such that they do not affect your monthly budget. The goal of an EMI is to help reduce your loan burden month by month. Choose a comfortable tenure and affordable EMI option while repaying your loan. Low monthly instalments depend on the term of the loan, apart from other factors. Never be in a hurry while choosing your EMIs. Most flexible lenders offer loan tenure for 36 months which automatically lower your EMI plan.
5. Enquire about Hidden Costs
The Personal Loan rates vary according to lenders. Get accurate information on that, as it will significantly impact the repayment. Always choose a loan with a low-interest rate. There are a lot of associated taxes that the lenders charge while finalizing a Personal Loan. This fee covers almost 5 to 7% of your total loan amount, most notably the upfront fee you must pay before final processing the loan. Discuss with your lender properly and see how much they will deduct in the form of taxes from the total loan amount, as this might cut down a considerable portion of the money you are borrowing. Go for those lenders who charge a comparatively low processing fee, with no upfront fee involved.
As you have seen, many things are hidden behind this pre-approved Personal Loan for salaried individuals. Once you understand these things, you can make the right decisions. First, compare the Personal Loan rates of different lenders and see which one will work out in your best interest. Be careful while applying for a Personal Loan, as you are the one who holds the responsibility to pay it back.