PERSONAL lOAN FAQ'S

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A. The documents required to avail a personal loan vary from lender to lender. However, most of the banks and NBFCs require a proof of identity, a proof of address and a proof of income.

A. With a plethora of personal loan offers available, choosing the best one can be challenging for some people. But worry not and follow the below tips to choose the best personal loan offer:

• Compare interest rates: Do not go for the first offer that comes your way. Always compare personal loan interest rates offered by different lenders before choosing a deal.
• Compare other loan fees and charges: Do check the associated loan charges and fees before settling for an offer as they might affect your budget despite a low rate of interest.
• Check for repayment flexibility: Check for prepayment and part-payment options and the associated charges to better plan your repayment schedule.
• Calculate EMI payout beforehand: Before you apply for personal loan, you need to be sure that you will be able to repay the loan on time without any penalties.

A. You can get a lower rate of interest on your personal loan by following the below tips:

• Maintain a good credit score as it is suggestive of financial stability and repayment capability. Higher the credit score, greater are the chances of availing a personal loan at a lower rate of interest.
• Apply for loan at a bank with which you already have a savings account or fixed deposit. Good pre-existing relationship with the lender has a positive impact on your repayment ability, which may help you to get a loan at a lower rate of      interest.
• Banks and NBFCs often release special personal loan offers during festive season. These offers generally have an attractive rate of interest. Thus, applying for a personal loan during the festive season may help you get a loan at a lower      rate of interest.

A. While getting a personal loan application approved completely lies in the hands of the lender, the below steps can be followed to avoid rejection:

• Carefully check the eligibility criteria set by the bank/NBFC and ensure you meet them.
• Check for inaccuracies in your credit report as they might affect your credit score and hence your chances of getting a personal loan. 
• Reduce your outstanding debt by paying any existing loan installments and credit card dues.
• Keep your credit utilization ratio below 40%.
• Avoid multiple loan applications at once.

A. The impact of GST on personal loans has not been much as it is not levied on EMIs. However, the service tax has increased from 15% to 18%. As a result, the one-time costs including processing fee, prepayment charges, etc. will rise.