Personal loans for most people have become synonymous with everyday life. Be it buying appliances, going on a holiday, starting a business or even meeting emergency expenses, personal loans are the easiest way to finance your needs and even the occasional indulgences. This type of loan can be used for anything from a wedding to paying for a child’s education, purchasing a gadget, or even a medical emergency. It is entirely up to you to decide what you want to do with it. That’s why it’s called a personal loan, after all.
Banks do not require any collateral when you apply for a loan, as you may be aware. As a result, it’s classified as an unsecured credit service. It requires the same minimal documentation as a credit card loan. On loans, banks charge a fixed interest rate.
Documents Required for Personal Loan
- Proof of Residence
- Proof of Identity
- PAN Card
- Latest 3 Months Bank Statement for salaried individuals, while self-employed needs to produce 6 months bank statement
- Passport size photographs
- Office address proof in case of self-employed
- Proof of office ownership and continuity of business for self-employed individuals
How much Personal Loan can you take on your Salary?
When thinking about taking out a loan the first question in your mind is – How much loan can I get? Other than the key question of maximum personal loan, it is also a matter of clearing all the required eligibility criteria.
The eligibility criteria differ for salaried as well as self-employed individuals. The eligibility criteria for applying for a personal loan are as follows:
- The applicant must be an employee of a private or a public enterprise with a basic minimum turnover as per the company policy.
- The applicant’s age must range between 21 to 60 years.
- The income should be at least Rs. 25,000.
- A self-employed person can avail of a loan calculated on the profit after tax based on the industry and should be in business for a minimum of 5 years.
- The applicant should have a minimum of 1-year experience and 6 months in the present company.
How to improve your Loan eligibility?
It is always a good idea to work on your eligibility a couple of months before applying for a loan. Here are a couple of measures to improve your eligibility for a loan:
- Pay off your existing debts that include credit cards and loans.
- Avoid applying for more than one loan at a time.
- Work on building a high credit score.
- Ensure you have the required documentation – such as PAN, Aadhaar, valid address proofs, salary slips, bank statements, etc.
Is it possible to get a Personal Loan with a monthly salary of less than Rs. 15,000?
Yes, you can get a personal loan with a low salary. Individuals with low incomes are frequently faced with a cash crunch due to a plethora of financial responsibilities. Low wages can be a barrier when applying for a personal loan; however, some banks or platforms like Omozing have come to your rescue to alleviate your concerns.
Even if your monthly income is less than Rs. 15,000, you can easily qualify for the loan.
How much Loan can you get on 15000 Salary?
Personal loan has been commonly accepted by borrowers belonging to different salary slabs. Those earning a salary of Rs 15,000 belong to the starting range of personal loan eligibility criteria. It means a minimum of 15,000 salaries is mandatory to avail a personal loan. The eligibility criteria are made simple with a minimum salary slab so that even the low salary income group can avail the benefit of personal loan.
Verification of monthly income is mainly done to probe the repayment ability of the applicant. With 15,000 salary, borrowers can easily avail small cash loans ranging from 50,000 to 1,50,000. This is easy to repay when broken down into EMIs. However, the loan amount can vary from lender to lender.
3 Ways to Repay your Personal Loan Quickly
You also need to have a precise understanding of how to repay your personal loan, quickly. Planning your repayment strategy smartly not only saves valuable time but also improves your overall financial standing.
Personal Loan Balance Transfer
If you have a credit card with a significant spending limit, or are displeased with your current lender, you can even choose to go for a personal loan balance transfer as a mode of repaying it off quickly. Under this facility, your previous outstanding balance is completely closed. Plus, you may get a higher loan amount sanctioned at a more affordable interest rate.
This makes sense if you are paying a higher interest rate on your personal loan and your credit card service provider offers you the option to transfer it at a lower rate of interest. Having said that, this is only possible if you have a good credit score.
Go in for Debt Consolidation Loans
You may struggle to repay your monthly EMIs on time if you have multiple debts including personal loans. To make sure that you do not lag behind in your personal loan payments too often, it is best to opt for a debt consolidation loan.
You can club all your loans, including credit card debts into a unified entity with a debt consolidation loan. As opposed to making several repayments on varying interest rates this results in a convenient single pay-out every month on a fixed interest rate. As a matter of fact, in most cases, you will be paying a lower interest rate with a debt consolidation loan on your monthly instalment making it easier for you to manage your finances better.
Foreclosing your Personal Loan
Personal loans are often used to fulfil short-term financial deficits. But a personal loan comes with an interest rate and a repayment tenure of 12 to 60 months. Therefore, while you were able to meet your immediate financial requirements, you are laden with a financial burden that requires you to pay back an additional interest component on the principal amount borrowed. Plus, you will have to abide by a minimum of a 12 month period repayment tenure.
The best way out here is to foreclose your personal loan if you have sufficient funds to do so. This can be done as soon as your lock-in period of the loan is over. Even though you may have to pay a penalty charge, prepayment of your personal loan saves on a lot of interest and definitely lessens your financial burden.
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