In this article we will try and give you a heads up with regards to everything that can go wrong while applying for a Personal Loan.
Rejection on the first stageBelieve it or not, most loan applicants do not even pass the first stage of verification. They are rejected on the basis of basic criteria like age, income, poor-bank verifications or even proof-documents which do not satisfy the lender’s requirements.
One way of avoiding such a situation can be by making sure that the eligibility requirements of lending banks have been carefully read and by following them accurately step by step.
Credit ScoreYour credit score speaks more about you, than you could ever do yourself. It is truly an honest reflection of your financial health, good or bad. And this is the one thing on which no bank compromises upon. It is extremely important for banks to verify your creditworthiness before lending because it’s their money that is being invested in you. No bank would invest in someone if it was unsure of the person’s capability to repay back the loan with interest.
As an applicant, what you can do before applying for a personal loan is to regularly check your credit score and find ways of improving it. This will help tilt the scales in your favor whenever you finally decide to apply for a personal loan.
Regular Source of IncomeNo bank would lend money to a person who doesn’t have a regular source of basic income sufficient enough to pay the basic EMI for the personal loan.
Hidden ChargesMost people tend to ignore the charges over and above the interest rate. You mustn’t. In reality, these charges can become a hefty sum. Some fees that are not mentioned out rightly are –
- Processing fees
- Fines on missed instalments
- Charges on pre-payment
- Charges on pre-closure
- Transactional fees
Learn more about your Personal Loan Eligibility here
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
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