Personal Loan: Guide To Know Everything About Personal Loan

Let us tell you a little something about Aryan, a 24-year-old writer from Delhi

Aryan has got a new job in Mumbai and has to relocate soon. He is overjoyed and can’t wait to move to Mumbai and start a new life. Just when he is looking for accommodation, he realizes that he doesn’t have enough funds to cover his rental security, move to the new place, get furniture and necessary equipment, and his moving cost.

He doesn’t want to burden his parents by asking them for help; but he knows if he could get an instant loan online, he can comfortably pay it back with his new salary. But Aryan is not well-versed with instant loans and thinks who would even give him a loan for relocation; after all, loans are for bigger things like a new car or house.

Aryan meets his friend Diksha over coffee one evening and he tells her his struggle. Diksha suggests to him something called a Personal Loan, which is a type of instant loan.

Follow their conversation to know more 

Aryan: But What is Personal Loan?

Diksha: Personal Loans are one of the most versatile personal loans on the market today. As the name suggests, you can use Personal Loans for any personal need you may have. It can be your way out of unprecedented expenses. 

It is a type of unsecured loan, which means you don’t necessarily need to pledge collateral to secure it. It is authorized based on your income, credit history, credit score, among other criteria. 

I know people that have taken personal loans for medical emergencies, vacations, education, wedding expenses, purchasing consumer durables, etc.

Aryan: Okay, that is interesting, but where do I get a Personal Loan from?

Diksha: You can get a Personal Loan from any bank or NBFC (Non-banking Financial Company). In fact, many pre-approved loans can be disbursed instantly upon approval.

Nowadays, you can literally get a Personal Loan online with a few clicks without leaving home. A smartphone and a stable internet connection are all you need. You can also get an instant personal loan online from Freecharge. They require minimal documentation and the disbursal process is easy and instant.

Aryan: That sounds simple, but what next? How do I go about it?

Diksha: Okay, now first you have to select a lender. To have a hassle-free experience of getting a loan, it is best you check the terms of the loan on their website or app. Make sure you verify if a loan from a particular lender fits your needs or not.

Next, understand the loan amount you need. It is important you get only enough for your pressing needs and not more. After all, you only have to pay it back.

While you are at it, check your eligibility by entering some details in the eligibility calculator. You’ll just have to enter a few details like income, nature of work, credit history, and will tell you if you’re eligible for a Personal Loan or not. It can also give a rough estimate of how much you can borrow.

Aryan: I heard something about loan variables. What are Personal Loan Variables?

Diksha: Two important factors to consider when choosing a loan are your loan amount and tenor aka Personal Loan Variables. You can customize the loan amount and timeline to fix EMIs you can comfortably pay

The sooner you pay back your loan, the lower interest you will have to pay. But missing an EMI can affect your credit score, so be careful of that.

Aryan: Do you know what all documents I need for a Personal Loan?

Diksha: Normally, you will need to submit a basic KYC document such as a passport or a PAN card, proof of employment and income such as an employee ID card, bank statements, salary slips, etc. You can do this online on the lender’s website or mobile app too

Ensure all details entered in the application form are accurate to the best of your knowledge to avoid conflicts and rejection of your Personal Loan Application. You may also have to do a quick video verification as the last step before your loan application is approved.

Apart from this, every lender has different documentation requirements so it is best you read up on what is needed by them.

Aryan: But how do I actually get the Loan Money?

Diksha: After your loan is approved, you get your loan money directly in your bank account. You can now use this money for whatever needs you may have. The disbursal from your lender into your bank account is quick and doesn’t require a lot of waiting.

Aryan: So what will you say are the Benefits of a Personal Loan?

Diksha: According to me the top 3 benefits of personal loans are:

• Their flexible nature. You can use them for whatever needs you may have. You can also choose your loan term based on your repayment capacity making them extremely convenient.
• Unlike other loans, Personal Loan requires minimal documentation making the entire borrowing process super quick.
• The disbursal of a Personal Loan does not take a lot of time. In cases of pre-approved loans, it is quick and can reflect in your bank account almost instantly.