A financial emergency can knock your door any day. As the need for finance is unpredictable, it is not always that you will have a monetary backup. There can be times when you need funds urgently and don’t have enough savings to fund it. In such a situation, you might feel the need of a helping hand.
In a fiscal emergency, financial institutions can be your helping hand. There are many lenders who can offer you such a financial help. You can easily borrow a loan from these financial institutions to fund your fiscal crisis. There are many loan options available, which you can choose according to your needs. One of such loan options is a personal loan.
What is a Personal Loan?
A personal loan can be used to fund various financial needs, then may it be buying a house or a medical emergency or a business start-up. Personal loans are considered to be much convenient than other loan options as lenders don’t monitor the usage of the personal loan funds. You can purchase a car and send your child abroad for higher studies at the same time.
Talking about personal loan, applying for a loan is not that difficult. You can either apply for a personal loan online or visit the financial institution, to complete your loan application process. Applying for the loan online is much convenient as you can save a lot of time. It takes at least 72hrs for a personal loan application to get approved by the lender. It is not always that your financial institution will approve your personal loan application, at times your application can also get rejected.
There are many reasons why the lender might not consider you eligible for a personal loan. Here are some factors to check in order to fit the personal loan eligibility criteria:
A credit score is instrumental when it comes to borrowing a personal loan. You can maintain a good credit score by repaying the loan amount on time. Many financial institutions check the credit score before approving your personal loan application. If your credit score is high, your personal loan application will be processed fast as compared to the other applicants. Also, the financial institution can lend you a higher loan amount. Whereas, having a bad credit score can get your home loan application rejected or the application can have a slow processing if you apply for a personal loan from the banks. In case if you have applied for a personal loan from Non-Banking Financial Companies (NBFCs), then NBFCs are flexible regarding credit score. Thus, credit score plays a very important role while determining your personal loan eligibility.
When it comes to decisions related to money, income is what is considered first. In case if your personal loan application gets rejected, income can be one of the reasons for this. The financial institution will always ask for a salary slip, to check your personal loan eligibility. Depending on your income the lender decides whether you fit in one of the eligibility criteria or not. In case if you don’t have sufficient income to fit the criteria, then you can also apply for a joint personal loan.
Your personal loan eligibility also depends upon the loan documents that you submit to your lender. In case if the documents that you have submitted are incomplete, then there are chances that your personal loan application can get rejected. It is important to check all the documents before submitting it to the financial institution as documents play a crucial role.
Thus, it is very important to check the above things before applying for a personal loan, as you don’t want your personal loan application to get rejected when you are stuck in a financial emergency.