A personal loan is an emergency fund that gives you money to meet big expenses related to education, marriage, vacations, home renovations, or anything else. Over the years, the number of individuals applying for a personal loan has increased. As a result, banks have become more vigilant about the loan approval process. With that said, let’s take a look at some of the common issues you may face when applying for a personal loan online.
Rejection of the application
This is one of the most common reasons for not being able to get a personal loan. Make sure you fill out all the details on the application form accurately, as the bank will review every detail, verify your credentials, and check your credit score. If there is a disparity between the information provided in the application and that collected by the bank, the chances of rejection of the loan increase.
Before saying yes to a personal loan, it is always a good idea to check and compare interest rates. Talk to several lenders before accepting an offer. The easiest way to do this is to check the interest rate and EMI of a personal loan on the bank’s website calculator. For example, IndusInd Bank has an online loan calculator where you can enter all the details and view the interest rate as well as the monthly EMI you need to pay.
All financial institutions check the applicant’s credit score before approving the application. If your credit rating is low, the bank may not approve your application. This will again have an impact on the credit rating. So, it is important that you work on your credit score before applying for a loan.
When you visit a branch for apply for a personal loan, you will need to submit many documents such as proof of identity, proof of address, bank statements, proof of income, etc. However, this step can be removed by applying for a personal loan online. IndusInd Bank follows a 100% paperless process for the approval of personal loans. You can fill out their loan form online and save yourself the hassle of paperwork.
Other problems encountered
Besides the issues listed above, there are other issues that individuals face when deciding to take out a personal loan.
- Deciding on the loan amount is a common problem facing borrowers. Some banks may offer personal loans of up to 20-25 lakhs, but that doesn’t mean you have to take the full amount. Decide on the amount actually required and your payback capacity. Remember, you have to pay monthly IMEs with interest.
- Choosing a lender is another problem. There are many banks and financial institutions offer personal loans, but how do you decide which one to go with? Compare lenders on different criteria including interest rate, eligibility criteria, required documents, repayment flexibility, approval time, and customer experience. This will make your task easier.
Having a prior idea of ââthe problems encountered when applying for a personal loan will make things easier for applicants.