Personal loan is a form of credit which can help you manage unexpected expenses or unplanned emergencies. Since personal loans do not necessarily require you to keep any security with the banks, they prefer to extend loans to people with a steady and fixed source of income, such as salary. If you have experienced personal loans earlier, you would know the level of documentation generally required by banks and other factors considered while sanctioning a personal loan.
Documentation helps establish your identity, stability, and credit-worthiness. KYC documents are taken to prove your identity and address. Bank statements and salary slips depict your financial capabilities and expenditure habits. Although this gives them a fair idea of how much you can spare for EMIs against your proposed personal loan, but the amount of time consumed can be a big deterrent for first time applicant who is looking for a loan on an urgent basis.
Eligibility Parameters Banks Consider in a Personal Loan Application
So, what exactly do the banks look for in a personal loan applicant? How do they decide whether to process a particular application or not? Which elements increase the probability of you getting a loan?
- Credit Score: A good credit score reflects that you have paid all your loans in the past as and when due. Any default in repayment will affect the credit rating negatively and reduce your chances of getting a loan. Banks access your credit scores through credit bureaus like CIBIL, Equifax, CRIF etc.
- Source of income: Since there is no collateral security to cover a personal loan, banks want to assess whether you will be able to repay the loan on time. They prefer that you have a steady source of income and hence ask for salary slips and bank statements to verify the same.
- Job Stability:– Not only your income but also your work history affects your chances of getting a personal loan. Frequent job changes or long gaps in between may have a negative impact on your eligibility
- Residential stability: Banks may not prefer customers who have changed their residences very frequently. A stable address impacts your eligibility favorably.
A Personal loan is the best option when you need funds without denting your savings. But the cumbersome processes make it less desirable to apply for loans from regular institutions.
What is a better alternative than applying for personal loans from banks?
LoanTap offers salaried personnel a better option than a regular personal loan from banks. With the least amount of paperwork and faster processing, it is disrupting the conventional method of taking a loan from a bank. Let’s have a look at a few features of LoanTap’s tailor made loans that make it better than a regular personal loan from the bank.
- Faster and seamless processing: A simple online application followed by a visit by an official to collect documents is all that is required to take a loan from LoanTap. Loan application to disbursal does not take more than 24-36 working hours if the documents are found to be sufficient and correct
- Know your eligibility upfront: LoanTap calculates your eligibility upfront even before you have applied for a loan. Your credit score takes a negative hit every time it is checked. LoanTap pings credit bureaus only after you have cleared all other basic checks thereby avoids the negative impact on your credit score
- No foreclosure charges: Unlike a bank loan, LoanTap lets you make prepayment or part-payments after 6 months of servicing the loan, without any charges
- EMI free loans: LoanTap products are designed smartly to suit your pocket. You don’t have to pay EMIs. With EMI Free loans, you can pay interest on a monthly basis while part of the principal amount, called bullet payment, is paid every 6 months. Bullet payments are lump sum payments made towards the loan. This does not put undue pressure on your monthly budgets and lets you reap the benefits of freeing up some cash
So why do all the paperwork and wait for days to get the money? Check your eligibility instantly and get disbursal within 24-36 hours with LoanTap.
Choose a flexible and smarter version of personal loan. Choose LoanTap for quick EMI Free loans.EMI Free LoanPersonal Loan