Personal loans are unsecured loans that you can avail of without any security or collateral with minimal documentation. When you apply to new-age NBFCs like Clix Capital online, you get quick approval on personal loans, which offers access to instant money. However, like other loans, you must repay them in equated monthly instalments (EMI).
Here, we cover everything you need to know about personal loans.
When to Take a Personal Loan?
Personal loans are multi-purpose financing options that cover almost every monetary requirement. Some reasons to apply for a personal loan are:
- Vacation or holiday financing
- Cover wedding expenses
- Renovate, improve, or repair a house
- Pay medical emergency bills
- Consolidate debts to ease loan burden
- Finance higher education
Personal loan quick approval makes them the preferred financing option for immediate cash needs.
Benefits of Taking a Personal Loan
Here are a few benefits of taking a personal loan:
- No collateral, security, or guarantor is required
- Streamlined procedures due to minimal documentation requirements
- Disbursal takes just a few hours after approval
- Flexible repayment tenure makes repayment easy
- Being multi-purpose loans, they can finance borrowers’ different aspirations
So, personal loan benefits are abundant. However, don’t forget to check the eligibility criteria.
Personal Loan Eligibility Criteria
NBFCs conduct due diligence while evaluating personal loan applications. Most importantly, they verify your financial stability, credit score, income, and financial obligations that vary between lending institutions. The eligibility conditions include the following:
Age: Check the lending institution’s minimum and maximum age requirement before applying for a personal loan.
Income: Your monthly salary is crucial to personal loan quick approval and interest rate.
Employment: You must have a stable job with a regular income and sufficient work experience.
Credit Score: The credit score gives a perspective of your credit history to the loan provider, based on which they determine the loan amount and interest rate.
Documentation Requirements
Some necessary documents are:
- Identity proof
- Residence proof
- Income proof
- Passport size photograph
- Application form
Factors Affecting Personal Loan Interest Rates
Interest rate is one of the most significant charges a borrower pays for a loan. Although finance providers offer competitive interest rates, your interest rate depends on several factors, including income, credit score, financial obligations, loan tenure, etc. Use a personal loan interest rate calculator to determine your loan application’s applicable rate and make an informed choice.
Calculating Personal Loan EMIs
Calculating monthly EMIs is crucial to planning loan repayment. The mathematical formula to calculate the EMIs is
EMI = P × r × (1 + r)n/((1 + r)n – 1)
Here, P = Loan amount, r = interest rate, n = number of months in the tenure
However, there is no longer a need to calculate the EMIs manually, as you may use a personal loan EMI calculator to estimate the future EMIs and select a loan term with budget-friendly EMIs.
Many people apply for a personal loan to meet their big-ticket expenses. One reason for their increasing popularity is quick approval. personal loans are unsecured, so you get them without collateral. You can avail of a personal loan from a reputed NBFC like Clix Capital and get instant approval.
