Build your credit history as you take your first personal loan

4 MinsMarch 19, 2020

For those of you who have just started working, access to formal loans can be a blessing. Now you can afford the deposit for your rental home, the foreign holiday you have been dreaming of or the latest home theatre system as a gift for your parents.

As a salaried employee, you can get access to a personal loan easily and repay it through Equated Monthly Instalments (EMIs) at your convenience. But ensure that you don’t go overboard when it comes to borrowing nor default on your repayment. Read on to know how you can avail of a personal loan easily and build a good credit record for yourself.

credit score


You can maintain a good credit record by:

  • Paying your utility bills, credit card bills, and loan EMIs on-time.
  • Avoiding too many loan applications, as they raise questions on your creditworthiness and usually pull down the credit score.
  • Avoid applying to several banks or lenders for a loan; as it gives the impression that you are constantly seeking a Loan, and then not many banks/institutions are willing to lend.
  • Ensuring that you apply for a Loan only when the chance of your Loan being approved is high.
  • Maintaining a fair balance between secured and unsecured loans, since they have a bearing on the credit score.
  • Repaying all loans on time, including credit card dues
  • Limiting the use of EMI facility on credit card/s
  • Ensuring all closure formalities are completed when you close a loan/s and updating records with credit information bureaus

Benefits of good credit history / record include faster Loan approval and disbursal, flexible repayment terms, and in some cases lower interest rates and other fees. But remember that a good credit record takes time to build and does not happen overnight

[Also Read: Personal Loans for Emergency Needs]

24x7 Personal Loan by Axis Bank

If you are new to credit you can look at 24x7 Personal Loans by Axis Bank that offers an instant and simple digital solution. Existing customers of Axis Bank can avail of the loan with no documentation, while new customers may have to undergo minimum documentation. Besides, there is no penalty for early closure of the loan.

Salient features

  • Loan tenures ranging from three months to five years depending on your need
  • Least turnaround time for disbursal if you meet the eligibility criteria and your documentation is complete
  • Option to pre-pay or close the loan before the tenure without penalty or charge

Documents required when applying for a loan

When you apply for a loan the bank will ask you for documents to show income proof, age proof, residence proof, and Income-Tax Return. These documents will help the bank get an idea of your repayment capacity, occupation, your employer (public limited or private company), whether the income you have stated is correct and if you pay tax on it, and so on.

When you take a loan, as a prudent Loan planning exercise always make it a point to use the EMI calculators. Axis Bank’s Personal Loan EMI calculator will enable you to understand how much your EMI outgo will be.

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.