9 Steps to Follow When Taking a Personal Loan from Lenders in 2023

A personal loan is a popular choice among borrowers due to the absence of any end-use restriction. You can use this money to cover travel expenses, finances for higher education, home renovation costs, medical emergencies, wedding costs, and so on. You can follow some hassle-free steps for getting a personal loan from Muthoot Finance or any other financial institution. 

9 Steps for Taking a Personal Loan from Lenders

Below are some steps that you can follow to apply for a personal loan:

Step 1: Conduct a Thorough Research on Lenders 

It is imperative to conduct an extensive research on lenders offering personal loans. You must go through their websites to check the interest rates at which they offer credit to their borrowers. 

You can also check if they provide any additional offers to their customers. Accordingly, select the most affordable option so that you can quickly pay the monthly instalments on time without any additional financial burden. 

Step 2: Check Your Existing Credit Score

The next step is checking the eligibility criteria that the lender has set for a personal loan. The most crucial among them is the credit score bar. Since a personal loan is an unsecured type of credit, lenders usually take this score into consideration during loan approval.

However, if you have a less-than-perfect credit score, there is nothing to worry about. There are several ways to increase it. Moreover, you can resort to bad credit loans if a strong need arises while you have a poor financial profile. Nonetheless, you must first identify the main reason behind your low CIBIL score to effectively resolve it. 

Step 3: Finalise a Guarantor for Your Loan

In case you are in urgent need of funds but do not have sufficient time to improve your credit score, you can arrange a guarantor. However, you should keep in mind that he or she must have a good credit score.

You can request any of your family members to be your guarantor. This increases your chances of loan approval as the creditors know whom to approach in case you are unable to repay the credit on time.  

Step 4: Determine the Loan Amount Eligibility

Once done, you should decide the loan amount that you will be taking. For this, you can use a personal loan eligibility calculator available on the official website of your preferred financial institution.

Furthermore, you should also calculate the monthly instalments that you will have to pay on that amount using an online EMI calculator. Thus, you can select an optimum amount that will be sufficient for your needs and will not attract higher EMIs.

Step 5: Decide an Appropriate Loan Tenure

Selecting a convenient loan tenure is another challenging task that you should perform with caution. Most lenders generally allow their customers to choose a suitable repayment tenure as per their convenience.

For a shorter tenure, you will have to pay a higher EMI on your credit. So, while deciding the duration, you should consider your income, monthly budget and the payable EMI to select an appropriate tenure.

Step 6: Arrange All the Essential Documents

Some essential papers that you will need during the application for a personal loan are KYC documents such as an Aadhaar card, Voter ID card, divining license, etc. You might also have to produce some utility bills to serve as address proof.

In addition to this, you will have to submit bank account statements and salary slips to serve as income-proof documents. However, these requirements can vary with lenders. So you must make sure that you arrange all the documents beforehand for a smooth process. 

Step 7: Fill out the Loan Application Form

Once you have made all the preliminary decisions, you should proceed with the application process. You can quickly access the credit application form from the official website of your preferred financial institution.

You will have to enter some basic details about yourself in the form. Then you can enter the chosen loan amount and repayment tenure to proceed. Finally, upload the necessary documents to complete your application process.  

Step 8: Verify the Information Provided

Before you submit your application, you must cross-check all the information that you have entered along with the necessary documents. This is essential as any wrong information can lead to the rejection of your application.

You should also cross-check all the information that you have filled in a page before proceeding to the next one for extra precaution. Once done, you can click on the ‘Submit’ button to complete the application fill-up process.  

Step 9: Make the Necessary Payments

There are several financial institutions that charge only minimal processing fees for loan applications. However, this amount varies considerably with the lenders and typically ranges between 3% and 4%. Paying this fee after submitting your application completes the entire procedure.

You can follow these steps to apply for a personal loan from Muthoot Finance or from any other financial institution. However, you should keep in mind that you must go for a lender having a good market reputation. This ensures that you do not become a victim of fraud while taking a loan. 

Instagram Followers & Likes $1

Hot Topics

Related Articles