You can use a personal loan to finance various needs, ranging from emergencies and home renovations to education, holidays, or weddings.
Here are some easy steps to apply for a personal loan and ensure a fast disbursal process.
8 Steps to Apply for a Personal Loan
#1 – Check Your Debt-to-Income (DTI) Ratio
To calculate your DTI, divide your gross monthly outlay by total monthly income. The monthly outlay includes:
- Credit card bills
- Loan payments
- Other dues (apart from taxes, household expenses, and utilities)
Ensure that your DTI is not high. Then the chances of getting a personal loan approved will be higher. That’s because the lender checks the ratio to assess your loan repayment capacity and approves a loan accordingly.
#2 – Check Your Credit Score
Ensure to check your credit score before you apply for a personal loan.
If your credit score is high:
- Your application for a personal loan will have instant approval.
- You’ll be eligible to get competitive interest rates on your loan.
#3 – Get a Co-Signer
Getting a co-signer for a personal loan can help if:
- You have a high debt-to-income ratio
- Your credit score isn’t good enough for a loan approval
Consider choosing a friend or family member with a high CIBIL score as the co-signer to get a loan approved quickly.
#4 – Choose the Best Lender
Once you’ve worked on getting easy approval for a loan, compare the benefits offered by various lenders.
Choose the best lender who offers:
- Instant disbursals of personal loans followed by an entirely paperless, digital, online procedure of application
- Competitive interest rates
- Flexible repayment tenure up to 60 months
- Balance transfers of existing credit cards and personal loans at affordable rates
#5 – Run the Numbers
After choosing a lender, check its website has a personal loan EMI calculator. Then use it to check your monthly EMI with these steps:
- Select the amount of loan you want to take.
- Select the desired repayment tenure.
- Choose a reasonable interest rate.
Settle for the EMI amount that you can pay monthly.
#6 – Check Your Eligibility
Open the lender’s website and check the eligibility criteria to apply for a personal loan. If you meet the requirements under the salaried or self-employed category, you can proceed with the application.
#7 – Keep the Necessary Documents Ready
Before applying for the loan, keep all the required documents at hand for verification. For that, you’ll usually need the following documents:
- Bank statement
- A valid identity and address proof (like Aadhar Card)
- Income proof (like salary slips or income tax returns)
#8 – Apply for the Loan
If the lender allows you to apply for personal loans online:
- Visit the bank’s website or loan app.
- Fill the online application form. (As per your eligibility, the loan request shall be approved.)
- Upload all the documents necessary for verification.
- Once the documents are verified, your account will be credited with the loan amount.
Always prefer online applications of personal loans for instant disbursals so that you can use them to finance your big purchases, especially emergencies, right away.