Get a personal loan at the best possible rate with a bit of planning

5 MinsMar 15, 2021

You never know when you may find yourself in need of money. For instance, there could be a medical emergency in your family, or your house may need urgent repairs and so on. Even in case of planned events like sending your children overseas for higher education, their wedding expenses, or a foreign trip, you may find you need more money than what you had planned for and saved. In such situations, a Personal Loan comes in handy, as it is a loan that can be utilized for almost any purpose.

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A personal loan is an unsecured loan; which means you do not have to pledge or mortgage your assets such as gold, securities/bonds, car, house, etc.

That being said, before disbursing a personal loan, a bank usually conducts a thorough background check and due diligence to evaluate your credentials, whether you are salaried or self-employed, the nature of work, the type of organisation you work at (whether proprietorship, partnership, private limited or public limited), your residual working lifespan, your financial stability, and your repayment capacity.

Your repayment capacity, credit behaviour and creditworthiness are exhibited by the credit score assigned in the credit report, which the bank sources from credit information companies. Higher your credit score (of 750 and above), the better it is for you, the applicant, as your Personal Loan application could be processed sooner.

Here are seven pointers to keep in mind so that you get a Personal Loan easily:

  • Maintain a healthy credit score (Higher the credit score (750 and above), the better it is)
  • Do not submit multiple loan applications (It can weigh on your credit score)
  • Make sure you have not availed of a personal loan in the last six months (It does not depict a very healthy picture of your finances)
  • Ensure your EMIs do not exceed 40-50% of your net take-home pay (It could raise doubts about your repayment capacity)
  • Avoid creating a credit card debt (Use a credit card with discipline and pay all your dues on time)
  • Maintain a fair balance between secured and unsecured loan (Since it weighs on your credit score)
  • Consolidate debt as far as possible (In the interest of your financial wellbeing)

 

[Also Read: How a Personal Loan can help in debt consolidation]

Keeping a good track record in handling loans/credits may make you eligible for pre-approved Personal Loan offers.

If you have a high credit score, it may give you the power to bargain for the best rate of interest, which will in turn help reduce your EMI (Equated Monthly Instalment). The high credit score may also help in lowering the processing fee on the loan or in some cases, help in waiving it off.

Axis Bank offers Personal Loan for amounts ranging from Rs 50,000 to Rs 15 lakh at a competitive rate of interest and with flexible repayment tenure.

The three key benefits of availing of a Personal Loan from Axis Bank are:

  • Minimal documentation and speedy approval of loans 
  • Attractive interest rates
  • Flexible repayment tenure ranging from 12 months to 60 months with Equated Monthly Instalment (EMI) facility to ease your repayment burden (Currently, a two-month moratorium is offered wherein no EMI is charged)

 

You may also transfer your existing high-interest Personal Loan to Axis Bank and enjoy a lower interest rate.

To know how much you need to pay per month, there is a Personal Loan calculator at your disposal. You can choose your tenure and the amount that you are comfortable repaying each month for the chosen tenure.

And to keep a track of your Axis Bank Personal Loan, you may place a request for a Statement of Account or Repayment Schedule.

You also have the option to part-prepayment and foreclosure of the Personal Loan, if wish to repay it sooner. Axis Bank levies zero charges in such cases.

Who can apply for a Personal Loan?

A salaried individual, self-employed––whether in business or profession––are eligible to apply. You need to be between 21 to 60 years of age with a certain monthly net income criteria set by the lender. In the case of Axis Bank, the minimum monthly net income net requirement is Rs 15,000, with minimal documentation.

With that said, when you apply for a Personal Loan, do the following:

  • Evaluate your needs to know the loan you require
  • Compare personal loan interest rates, processing charges, the penalty for pre-payment/foreclosure, etc., because all these charges add to your cost.
  • Recognise how much will be the EMI on your personal loan (using the Personal Loan EMI calculator)
  • Choose the loan tenure such that the EMIs do not turn out to a burden
  • Ensure that you maintain a high credit score
  • Finally, when you make up your mind, keep all your necessary documents ready and apply by duly filling in a personal loan application form.

 

If you are an existing customer of Axis Bank, you can apply for a Personal Loan on the bank’s mobile app or through your internet banking account.

When you apply for a Personal Loan, you don’t need to disturb your existing finances earmarked for vital goals viz. child’s education needs and your retirement. Moreover, the assets you have built with years of hard work are not required to be pledged or mortgaged, since it is an unsecured loan.

So, consider applying for a Personal Loan when you need money for whatever be the purpose. But ensure you are borrowing for the right reasons and borrow within your means.

Disclaimer: This article has been authored by PersonalFN, a Mumbai based Financial Planning and Mutual Fund research firm. Axis Bank doesn't influence any views of the author in any way. Axis Bank & PersonalFN shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.