Major Issues Faced by Personal Loan Borrowers
You require funds to meet any dream you have that you may not always be able to attain because of financial restrictions. However, does that infer you must stop dreaming? With so much growth in a number of financial institutions, it is possible to borrow funds to meet your dreams.
Borrowing from companions and relatives is not an advised way to enhance funds for your usage. Any delay in the repayment can impact your interpersonal connection with them. Luckily, you can opt for some assistance. A loan like Nira Personal Loan or Shriram Finance Personal Loan can cover your crucial expenditures for major life events like weddings, vacations, higher education, or home improvement. A preapproved personal loan even assists you when you require instant cash to manage any unplanned event. However, before placing an application for a personal loan, it is necessary that you know major problems and has the know-how to face them.
Few of the issues in life can financially be solved, but often there are scenarios where you need more funds than you currently have. In these cases, you borrow funds from lenders like NBFCs and banks. Amongst the loan options, a personal loan is one of the simplest ways to get funding for marriage, travel, home renovation and exigency purposes. However, a few of you may witness rejection when it comes to your loan application process. Read on to know some of the popular problems faced by personal loan customers –
Failure in the initial stage
Believe this or not, many loan applicants do not even get approval in the starting stage of verification. They get rejected based on basic parameters like income, age, supporting documents or poor bank guarantees that do not mitigate the lender’s needs.
One way to avoid these situations would be to make sure the eligibility parameter of lending banks. When conducting a loan application, you must be cognizant of mentioning all the details accurately. Banks will review your credit report and authenticate your details. If both parties are not compatible, there’s a good amount of chance your application may get rejected. You must initially check your credit report before placing an application for a loan to know where you stand and the chances of being eligible for a loan. In case of any mistakes in your credit report, ensure to rectify them as soon as possible to avoid bank rejection.
Also apply for: Shriram Finance Personal Loan
Credit score
Your credit score reflects your credibility and financial discipline. And this is one of the important filters that no lender compromises. Banks require you to authenticate your credibility before lending to avoid any risk of default. No bank can invest in you unless they are completely sure of your potential to repay the personal loan.
Being an applicant, what you can do before you place an application for a loan is regularly check your credit profile and find out ways to ameliorate it. This will assist in keeping your credit profile in your favour when you decide finally to place an application for a personal loan.
As mentioned before, all financial institutions do their credit check when placing an application for a personal loan.
Stable income source
No bank can lend funds to an individual who does not have any stable income source to pay for regular equated monthly instalments (EMIs) for a personal loan. Financial stability is extremely crucial when it comes to lending funds. If you switch your job frequently or are into freelance work, the chances of your personal loan application approval may be lower.
No lender can lend funds to anyone who does not have a periodical income source to pay for the basic EMI for a personal loan. When factoring your loan application, one of the requirements to qualify is to hold a standard income source. In case your income is lower as compared to the lender’s required eligibility, your chances of availing personal loan may be less.
Selecting the payment period
Most lenders permit you to select the payment tenure. You can select a loan period of between 1 and 5 years or higher. However, many of you may find it tough to select the correct repayment timing. Here’s where the personal loan EMI calculator will assist.
A personal loan EMI calculator is a financial instrument that you can use to compute your EMI for a specific loan proceed and loan tenure. Ideally, you must adjust the loan proceed or loan tenure until you reach the EMI amount that you can afford every month. Note that the longer the repayment tenure you select, the lower will be your loan EMI and the higher will be your prevailing interest component.
On the contrary, short-term personal loans indicate higher loan EMI but savings on the rate of interest. Thus, the term of the personal loan you select is based on your income as well as your potential to repay.
Loan permit
If you are placing an application for a personal loan, the major concern is whether your loan application will be approved. To enhance your loan eligibility, you should initially evaluate your credibility and ensure you are completely compliant.
Next, review your credit profile and ensure it is 750 and above, as your lender will depend heavily on your credit history for loan application approval. If you follow such steps, you can completely be sure that you will get the loan approval within a short time period.
EMI management
Once you have received your personal loan approval and get your loan amount deducted from your savings bank account, it is time to repay the personal loan at an interest rate and EMI. You must plan out your loan EMIs even before you place the application for a personal loan. Design a sound budget, keep your expenditures in control and prioritize your EMI component above all your obligations. Repaying your EMIs on time ameliorates your personal loan eligibility for future loans.
Selecting a lender
Many find it extremely tough to select a lender. When it is about simple personal loans, you may fund various lenders out there, each of them, whether Shriram Finance personal loan or Nira personal loan to be the best. But as one size does not fit all, a lender isn’t best for all borrowers.
You must compare the lenders based on their loan proceeds, rate of interest, repayment tenure, eligibility parameter, customer service, document requirements and others.
