Why are personal loans emerging as the preferred means of financing?
Personal loans are one of the easiest ways to gain access to the credit available in the Indian financial market. With a hassle-free online application, quick approval and easy EMIs, both salaried and self-employed individuals find personal loans as the means to fill the gap in their financial undertakings. Here’s why.
Until a decade ago, it was a common occurrence to borrow money from friends and family as well as to simply get a credit card and swipe it first and worry about repayment later. Thankfully the scenario isn’t the same anymore. So what has changed?
Not only have lenders been offering more competitive loans, but as consumers our credit culture has also undergone an overhaul. With millennials gaining access to jobs that pay well and the climate of consumerism in full bloom, we have access to an affluent lifestyle and believe in our ability to meet monetary requirements without being dependant on our friends and relatives. Our financial knowledge has also improved, and today we have confidence in our own capacity to repay a loan. In this scenario, a personal loan, rather than being considered a taboo, is looked at as a convenient way of bridging a financial gap.
What is a personal loan?
A personal loan is an unsecured loan and is usually sanctioned to consumers who belong to a low risk category. Salaried individuals or self-employed individuals with a steady source of income are the preferred candidates who are given loans by lenders across the board. The age group of personal loan seekers usually various from early 20s to late 30s, who find the online application and online approval of a personal loan very convenient.
Here’s how you can check if you are eligible for a personal loan:
If you are wondering how a personal loan can come to your rescue, here are some reasons where a cash infusion can be of great help:
- Medical Emergency
Half the time, having health and accident insurance is not enough. Thus a medical emergency in a family is one of the top reasons why consumers avail personal loans.
- Business Needs
We are living in a time where start-upsare very common, and a personal loan makes it easy for entrepreneurs to commence their dream project. It also helps you expand your existing business by augmenting your capital needs.
- Wedding and other social functions
Marriage ceremonies are an integral part of our culture. Everyone aspires to have that dream wedding they have always imagined, and a personal loan may facilitate just that!
- Funding your child’s education or investing in yourself
In this competitive world, pursuing world-class education can be an expensive affair. Global exposure also puts pressure on individuals, who then want increase their knowledge and training with more certification. Whatever is the need, a quick personal loan will never let you or your child miss an opportunity.
- Home repairs and renovation
Whether it is buying consumer durables and electronics or investing in revamping your home, a personal loan can make this transition easier.
- Down payment requirement
With property rates increasing with each year, the down payment amount has also gone up. Many people who fall short by a few lakhs take a personal loan for the deficit amount.
- Dream holiday
With the increase in disposable income, every family now plans for an annual holiday overseas. Personal loans are a popular choice for funding their dream vacation, as the cost of the holiday may be paid in easy instalments.
- Balance Transfer
Personal loansalso help refinance your existing debt with lower interest rate. Hence, it’s a great idea to transfer your outstanding balance from a credit card to a personal loan.
If you find resonance in the scenarios above, use our personal loan calculator to begin your journey towards finding a personal loan:
Documents needed for availing a personal loan
Personal loans have also gained prominence today because of their uncomplicated application process and easy documentation. These are some of the usual documents required for a personal loan application:
- Identity Proof:
Submit an identity proof (such as passport or driving licence copy, PAN card, Voter ID card, credit card with photograph or employee ID copy).
- Residence Proof:
Submit a proof of residence from any of the following: Passport copy, Voter ID or Ration Card if you reside at the same address as the one mentioned in it. If you are residing on rent at your current address, you can submit utility bills as a residence proof.
- Proof of Income:
Salaried individuals are expected to submit the previous financial year’s Form 16, their salary slip and 6-months bank statement
Self-employed individuals have to submit IT Returns for the past two years, the balance sheet as well as the profit & loss account as the proof of income.
More questions? Read our personal loan FAQs here:
With an easy set of documents as well as the quick access to funds that personal loans offer, they have emerged as a preferred way of financing small and medium size expenses. Do check the personal loans on offer by Bajaj Finserv, which not only charge low interest rates, but also give you the choice of choosing the tenure. To know more, click here: