Budgeting is a great practice. Everyone should plan their expenses to spend money efficiently. However, life is uncertain, and unplanned expenses can always emerge. It could be a surprise vacation with your friend, unexpected medical expenses, or festivals.
A personal loan helps you manage your unplanned expenses. You can get an instant personal loan of up to Rs. 25 lakh to meet your urgent money requirements without disturbing your budget. Here’s a quick guide to managing your unplanned expenses using low-interest personal loans.
What Is a Personal Loan?
A personal loan is an unsecured (collateral-free) loan for meeting your urgent money requirements. Lenders offer personal loans based on the borrower’s credit history, employment status, income level, and repayment capacity.
The maximum personal loan varies from lender to lender, but most banks and NBFCs set a limit of Rs. 25 lakh. However, the maximum loan amount you can get will depend on your income, credit score, and repayment capacity.
Why Take a Personal Loan to Manage Your Expenses?
The biggest advantage of a personal loan is you can use it to create an emergency fund. If you’re living paycheck to paycheck and a sudden need for money arises, a personal loan can be a dependable option. You can fulfill your instant money requirements using the received loan amount and repay the loan later.
Let’s look at some other advantages of a personal loan.
- Multi-Purpose Loans: You can use the personal loan funds for various purposes, such as going on a vacation, buying a motorbike/car, paying your medical bills, repaying your friend, and more. Personal loans are highly versatile.
- Repay Your Debt: If you have other low-amount, high-interest loans like credit card loans, you can take a personal loan to repay them. Since personal loans have lower interest rates, you can save up on interest rates.
- Quick Procedure: Unplanned expenses are often urgent, and you need money instantaneously. Since personal loans are unsecured loans, the approval process takes less than a week. Thus, you can meet your needs quickly.
- Low-Interest Rates: Personal loan interest rates oscillate between 8.15% and 24%. However, most lenders fall into the 10-15% bracket. This is much lower than the 18.24% (average) interest rate of credit card loans.
- Improve Credit Score: Maintaining a healthy credit score is crucial. You may need a bigger loan later, and a good credit score will be crucial for that. Getting a personal loan and repaying it on time is a helpful way to improve your credit score.
Personal Loan Eligibility and Required Documents
Both salaried and self-employed professionals can apply for a personal loan. The applicant should be a resident Indian of over 21 years of age at the time of application and under 65 years at the time of loan maturity.
The minimum required income is Rs. 20,000-30,000 per month, depending on the lender. The minimum work experience needed is one year for salaried professionals and six months for self-employed individuals.
The applicant should have a minimum credit score of 750 with a good credit history.
The following documents are needed to apply for a personal loan:
- A filled and signed application form
- Proof of identity, address, and age
- Salary slips of last three months
- Bank statements of last six months
- Form 16 income tax returns
- Financial statements or proof of income for self-employed
Get Low-Interest Personal Loans in Minutes
Fullerton India offers instant personal loans up to Rs. 25 lakhs at flexible interest rates starting at 11.99% only. The approval process is completely online, and the funds are credited to your account in as quick as 30 minutes.