There are times in life when an unexpected expenditure hits us and make us face a tough time. In an ideal world, every one of us is equipped with the emergency fund which we are to use in emergencies. But in the real world because of the highly expensive lifestyle, most of us are left with no or very less emergency fund which is not enough for fighting emergencies. In such situations, we are to depend on borrowing or using a credit card.
Personal loans are the form of borrowing where an applicant can avail an emergency fund without collateralizing any of the assets. A personal loan is a much-preferred credit product as this way of availing fund is not only cheaper than credit cards; it is even fast in processing too. An online personal loan generally disburses within the same day of applying. Because of being disbursed within a business day, such loans are also known as Same Day Loans.
Same day loan is just another name of online personal loans which are multipurpose and of course fast in disbursal. One can use a personal loan for any purpose such as a medical emergency, urgent travel, funding a vacation, a job loss or any other kind of use. If you can satisfy the eligibility criteria of the lender, you can avail the same in a hassle-free manner. Here are the general eligibility criteria which one needs to fulfill in order to avail a personal loan online.
Income– Income of the applicant is the first eligibility criteria which one has to fulfill as this is the prime parameter to gauge the repayment capacity of the borrower. The maximum amount which one can borrow also depends on the net income of the borrower. With a high monthly income, one can have a loan of a bigger amount.
Age– The age of the applicant is also checked while applying for an online loan. A loan is approved to the applicant only if the applicant is more than 21 years and less than 60 years old. Let’s say, an applicant has applied for a loan at the age of 58. In this case, a loan may be granted to him/ her but the loan must be closed before the applicant reaches 60. It means the applicant will have to repay the loan within 2 years.
Credit Score– A credit score is a numeric expression provided by the credit rating agencies which expresses your previous credits and your repayment habits towards the credits. All your loans and credit cards will be reflected in the credit history included any late or missed payments. A credit score ranges between 300 to 900. A score above 750 is considered eligible for the loan.
Employer– Along with the income, the employer of the applicant is also checked. If the applicant is employed by a reputed employer, he/she is about to get a loan in an easier way as compared to the one who works for an employer who has a debt on him. In the case of a self-employed applicant, the employer checks the business history of his business before sanctioning the loan.
Employment– The employment history of the applicant is also checked while sanctioning the loan. If it is found that the applicant has changed the job frequently, it is taken as a un stability of the applicant which may result in not approving the loan.
FOIR– The FOIR is the short form of Fixed Obligations to Income Ratio which is a way to calculate the applicant’s total financial obligations including the present loan. A personal loan is repaid through EMIs which is a fixed amount. The total outgo of a person including the applied loan should not cross more than 50% of the net monthly income. If you have to pay more than 50% of your income in repaying your debts, a lender will not approve a new loan to you as the chances of defaulting the loan increases.
If you find that you can satisfy all the criteria of the lender, then the next comes the documents. There are some documents which you are to provide in order to prove your eligibility. When you are going for an online loan, you don’t need to submit the documents physically. What you need to do is to upload the scanned copies of your documents to the website of the lender.
Here is the list of the basic documents required by almost all lenders
1) Identity Proof– One has to prove the identity of himself when you apply for loan online or in a conventional way. One can submit any of the given documents for an Identity Proof -PAN card, Passport, Driving License, Aadhar Card, Voter ID, Govt. issued ID-card.
2) Certificate and Proof of Business Existence– This document submission is applicable only for self employed employees. One can submit any of these -PAN,sales tax/ excise/ VAT/ service tax registration, Copy of partnership deed, Trade license, certificate of practice, registration certificate issued by RBI, SEBI.
3) Address Proof– One has to submit documents which ensure the address of the applicant. One can submit any of these for an address proof- Passport, Driving License, Election ID card, Electricity/ Telephone/ Mobile bill.
4) Income Proof– One has to submit the bank statement which is not more than 3 months old for an income proof.
5) Age Proof– This is the last but a very important document which one has to submit in order to prove yourself eligible for the loan. One can submit any one of the below mentioned documents as an age proof. PAN card, Passport, Driving License, Voter id card, Birth certificate, Employee ID card (only for PSU/ Government employees), School/ college leaving certificate.
The documents that are mentioned above are the basic documents which almost every one of us possesses. A PAN card, an Adhaar card and the bank statement are considered as the primary documents for a personal loan approval.
One can avail a personal loan in one day from a number of lenders such as public banks, private banks and NBFCs. The terms and conditions and the loan cost vary lender to lender. One must check all the options available to get a cheaper and convenient deal. The loan agencies like Finance Buddha are doing well in comparing the top leaders of the nation and making a loan seeker find the best loan option.