How To Get A Short-Term Personal Loan To Address Significant Expenses With Ease

All of us take pride in the way we manage our finances, living within our means with a bit spare for emergencies and long-term savings. But sometimes we are faced with an unplanned expenditure and have no spare resources to fall back on. For most of us, the good old days, of living in a huge joint family with the support and back up of several earning members, are well and truly gone. Fortunately, in this case, the old adage “When one door closes, another one opens” is practical and true. Today, there are several banks and NBFCs, like IIFL Finance, that offer several loan products to help ordinary individuals during times of need. One of these products is a personal loan.

If you are faced with such a situation, here are some tips to help you secure a personal loan with ease.

Ensure You Have A High Credit Score:

One of the biggest advantages of short-term loans like personal loans is that it does not require any collateral. However, being an unsecured loan, one of essential requisites is a good credit score of 750 or above. This is because lenders want to ensure you are credit-worthy, that you will repay the loan on time, and will not default. You can check your credit score without cost on most credit bureaus websites.

Calculate The Loan Amount:

In most cases, it is easy to estimate the instant short-term loan amount that you need. If you are taking the loan for medical expenses, the bulk expenditure is usually covered by medical insurance. You will only need to pay cash upfront for the down-payment and for consumable not covered by your insurance plan. Usually, the hospital administrator or executives will provide you with an estimate of this amount. In other cases, where you need the personal loan to cover home furnishing or renovation, make a clear budget beforehand.

Research The Offerings On The Market:

There are several financial companies offering personal loans. In fact, there are so many, one is confused as to where to start! Perhaps, a good place is blogs on personal loans which compare the offering of different lenders. Once you do that, go to the individual personal loan page of the lenders short-listed to verify whether any specifics such as loan term or interest rates have changed since the writing of the blog. Finalise this list in the order of your preference looking at the following aspects:

Does the lender provided the loan amount you need?
What is the interest rate charged?
What is the repayment tenure?
What is the eligibility criteria?

Organise The Documentation Needed:

Lenders require you to submit documents proving you meet the eligibility criteria at the time of application. The eligibility criteria required by most lenders is as follows:

• You need to be salaried or self-employed for one and three years respectively
• Age between 23 or 25 depending on whether you are salaried or self-employed. In addition, most lenders require that you do not cross the retirement age during the loan term.
• Monthly income of INR 25,000/- and above
• Thus, you will require appointment letters or salary slips and bank statements to verify the above. In addition, lenders ask for KYC documents such as Aadhar and PAN card against proof of identity, age and address. You need not provide your credit report as lenders will secure this themselves.

Look For A Pre-Approved Offer:

Many Banks and NBFCs issue pre-approved offers to their existing customers. These offers usually come via mail or calls to you personally. Before approaching a lender for a loan, check if there is a pre-approved offer in your name and whether the loan amount and the repayment terms are competitive when compared to the terms of other lenders. If so, you can choose to make use of the pre-approved offer. If the terms are not so advantageous, you could dialogue with your Relationship Manager to see if they are willing to negotiate the terms.

Thus, if you are in need of a short-term loan to manage an upcoming or ongoing expense, you could consider the personal loan. However, do plan your loan and repayments wisely. Use a Personal Loan EMI Calculator to help you decide the loan term and plan repayments responsibly. IIFL Finance offers personal loans up to INR 5 Lakhs. Do not hesitate to apply to us for a personal loan and get in touch with our Loan Officers to clear any confusion you have.