A Complete Guide for Your First Personal Loan

Understanding the world of personal finance can be complicated, especially when it comes to the various types of financing options and how they work. One of the most commonly used forms of credit is the personal loan, which can be used for a huge variety of purposes. Moreover, with technological advancements, the process of applying for a personal loan has become very straightforward. In fact, you can get a personal loan disbursed to your account in just a matter of minutes, by applying for instant personal loans online. Let’s take a look at what personal loans are and how they work.

What is a personal loan?

A personal loan is a type of unsecured loan, which the borrowers can utilize for any purpose they desire, such as funding higher education, paying medical bills, undertaking home repairs, purchasing a vehicle, etc. Due to the versatile nature of personal loans, it is up to the individual to decide how they want to use their sanctioned personal loan amount. Since personal loans are generally unsecured, applicants do not need any collateral in order to apply for them.

How do personal loans work?

Like any other form of credit, you are required to pay back the loan amount, plus interest in the form of Equated Monthly Instalments (EMIs) over a predetermined period of time. The loan amount sanctioned, as well as the interest and tenure of the personal loan, can depend upon a variety of factors, the most important being your credit score.

In order to qualify for a personal loan, you need to ensure that your credit score remains high by timely repayments of the existing loan EMIs or credit card bills that you have. The higher your credit score, the more likely it is that your personal loan will be approved.

Usually, the repayment for your loan begins from the first month after your loan is disbursed. The monthly payments that you make towards your personal loan, consist of both the original principal amount as well the interest. Next, let’s take a look at how to apply for a loan.

How to apply for a personal loan?

Your first loan finance may seem daunting, but online processes have made it easier. All you have to do, in order to apply for your first personal loan is visit the website/app of the financial institute that you are seeking a loan form

On their personal loan page/app section, you will be prompted to fill in your personal details, including your name, phone number, email, and identification. You may be asked to upload some necessary documents such as your Aadhaar and PAN details for verification purposes. Once you have submitted the necessary details and your Know Your Customer (KYC) process is completed, the bank will inform you about the maximum sanctioned limit that you can avail for your personal loan, as well as the tenure and interest rates applicable.

If you believe the loan terms are agreeable, you can apply for the personal loan directly through the bank’s website/portal. For instance, IndusInd Bank Instant Personal Loans offer a hassle-free loan application process, along with other valuable benefits such as:

· A fast and 100% digital application process, so you can apply for the loan online from the comfort of your home

· Affordable and competitive personal loan interest rates

· A flexible repayment tenure that you can customize as per your needs, between 1 to 4 years

· Quick loan disbursal after approval of the digital application

Moreover, if you are unsure about how much EMI you will need to pay, you can simply use a Personal Loan EMI calculatorto understand your monthly payments.

Key takeaways

Personal loans can be a useful tool that you can utilize in times of crisis to cover any financial liabilities or emergency expenses. You can also use personal loans to expand your business, purchase new products, upgrade your home, and so much more. However, it is important to ensure that you take a personal loan after carefully considering your repayment capabilities to ensure a stable financial future.