A personal loan is, no doubt, the best financial tool that helps in bridging the gap between income and expenses. However, there are some important prerequisites and some considerations that need to be made for the best use of borrowing. A personal loan is an unsecured loan and that makes the eligibility criteria very high. The loan provider runs a check on various aspects before offering an approval or a denial. There are things that every borrower must know before applying for a loan. The approval comes after all the hard work you do after recognition of the right set of criteria. A loan is a huge aspect and it has various things that need to be given importance to. Starting from types of loan, eligibility criteria, rate of interest, documents, loan calculator and everything else that plays an important part in borrowing. Enhance your experience of borrowing with a perfect way of gaining knowledge about various aspects of a personal loan.

What is a personal loan?

A personal loan is a flexible form of loan that can be used for anything and everything. It is close to having cash in your wallet that can be flexibly used. A personal loan is an unsecured loan that does not need any collateral or security to be attached to it. The rate of interest is high, but it can be avoided with good eligibility criteria and finding the right loan provider. A loan is not an easy process. It needs various aspects in proper order. Find out everything that you need to know about a personal loan before you go for it.

Documentation for a personal loan

● Identity proof (copy of passport/voter ID card/driving license/Aadhaar)
● Address proof (copy of passport/voter ID card/driving license/Aadhaar)
● Bank statement of the previous 3 months (Passbook of the previous 6 months)
● Two latest salary slip/current dated salary certificate with the latest Form 16
● Proof of End use
● Proof of Residence:-Leave and License Agreement/Utility Bill (not more than 3 months old)/Passport (any one).
● Income proof (audited financials for the last two years)
● KYC Documents: Proof of Identity; Address proof; DOB proof.
Types of personal loans
● Instant personal loan: An instant personal loan is an advanced form of loan that is also known as a same-day loan. It is helpful during any instant need or emergency because the amount is disbursed on the very same day. The entire process, from application to disbursement, is digital. This is a great feature that offers instant funds.
● Secured personal loan: A secured personal loan is one that has a security or collateral attached to the loan. In a secured loan, the risk is low and approval is very high. The chances of getting a loan approval on a secured loan are high.
● Unsecured loan: An unsecured loan is one that does not have any security or collateral attached. A personal loan is generally an unsecured loan. The rate of interest is high and approval will be difficult if the eligibility criteria are not met.
Eligibility criteria for personal loans
● Good credit score: A good credit score is important because a personal loan is unsecured. A score above 650 is very important for an individual that is looking to borrow. A credit score is a representation of the creditworthiness and credit background of an individual. This score helps the loan provider make a decision about the loan application. Based on the score, it is either rejected or approved.
● Good income: Income is directly responsible for repayment on time. A good income is very important for loan approval. Without a sufficient income monthly, it will not be possible for the individual to manage fixed obligations with debt EMI monthly. It is very important to increase the source of income and build wealth before applying for a personal loan.

Personal loan interest rate
How to calculate personal loan interest? To calculate the rate of interest, use a loan calculator. It will make the calculations easy and quick. The rate of interest should always be low. There are various ways to get a low rate of interest. One should have good eligibility criteria and look for the right loan provider. Compare the rates of interest among the best financial institutions and then settle for the right one. Keep negotiating on the right cost of the loan.

Wrapping up
Personal loans should always start with a loan calculator. It helps you to decide your EMI, compare the rate of interest and helps you to choose the right loan provider. Visit Clix Capital to find the answer to - how to calculate personal loan interest. It will be easy for you to get it.

Clix Capital Services Private Limited
Corporate Address: 901b, 9th Floor, Two Horizon Centre, DLF Phase V, Gurgaon, Haryana, India – 122002
Website: https://www.clix.capital/
P: 1800 200 9898
E: [email protected]