Hyderabad is one of the tier I cities in India and has a blend of both North and South Indian culture. Hyderabad is considered the best city to live in India mainly because of its good schools, low pollution levels, crime rates and a thriving job market.
Thanks to its IT, pharmaceutical and financial industries, where millions of aspirants dream to get a job in Hyderabad.
Due to the advancement in the standard of living and ever-growing lifestyle changes, many Hyderabad is facing a lot of financial imbalance, where a common man and many working-class professionals are unable to fund even their necessities.
Savings are getting exhausted and they find no other reliable source to borrow money. That is when many people opt for a personal loan and if you are applying for the first time and do not have much idea about a personal loan, then don’t worry, this blog shall explain everything to you in detail.
What is a Personal Loan?
A personal loan is a lump sum amount provided to you by your lender to help you balance your finances and cover your unplanned expenses. Even after meticulously planning, some expenses will stun you. It could either be a medical emergency in the family, an impromptu trip with family or friends, paying up for your last-minute wedding expenses, paying for any home repairs or any other sudden financial expenses that will take you by surprise. But the fact is the cash crunch is real! These unplanned expenses can always put you in a fix and that is when a personal loan can save your day.
This is an era of personalization and customization and so have the personal loans undergone a makeover too. That is why lenders have gone a step ahead and designed these new-age loan products which are tailored to meet your financial requirements.
- If you have planned your dream wedding and do not want to compromise on your budget on your special day, then you can apply for a marriage loan.
- If you are a travel enthusiast and would like to explore some of the places that are included in your ‘list-of-destinations-to-see’ but are short of funds, you can apply for a travel loan. With a travel loan in your hand, you can manage expenses like paying for your flight tickets, accommodation, sight-seeing, etc.
Most of the personal loans available are unsecured; which means you need not pledge your assets such as gold, property, etc. to avail a loan. The next aspect of a personal loan is they are offered with flexibility. You can use a personal loan absolutely for any financial reason.
Why are Different Types of Personal Loans Available?
A natural question that would pop in everyone’s mind is why are there so many types of loans available when you can just take a personal loan? Well, it is simple! Different types of loans are designed to serve a specific purpose. Customization and specification define these new-age loans. Because of the availability of various types of loans, it becomes easy for you to prefer the loan as per your choice and under your preferred tenure and interest rates.
As a First Time Applicant, What are the Points I Need to Remember?
Your credit score plays an important role in determining whether you are eligible for a loan or not. Based on your credit score, your lender will be able to finalize your loan amount and the rate of interest applied. Since you are a first-time loan beneficiary, chances are you might not have enough idea about your credit score or credit history at all. But when you check, make sure that you have a good credit score.
Understand the Commonly Used Terms
Understanding loan and its concepts is no rocket science. So, don’t worry! But it is advisable on the other hand, to gain basic information about the loan, its terminologies, your EMI’s, interest component and also be aware of how your loan provider calculates the interest of your loan. This way, you will be in a better position to choose a lender who suits your requirements and you don’t end up paying huge amounts of money.
Select the Right Lender
There are many lenders like banks, credit unions, NBFC’s (non-banking financial companies) that extend online personal loans in Hyderabad. Hence, it becomes important for you to evaluate what works best for you based on the interest rate charges, loan amount provided, the flexibility of the payment allowed, the speed at which the loan is disbursed, repayment and other foreclosure charges provided. So, understand these terms clearly before finalizing on the best lender.
Check your Loan Tenure
Most lenders have a loan tenure of 24-36 months, providing you with enough time to repay the loan amount comfortably.
Keep your Documents Handy
Get your documents in place so that your loan is processed instantly and your loan amount is disbursed quickly without any hassle! Select a lender who has minimal documentation compared to lenders who ask you to provide so many documents to approve your loan.
Know about other fees/charges Applied
Before signing the fine print, make sure that you are aware of the processing charges applied on your loan. By knowing the total charges applicable, you can know the total amount that you will receive and repay accordingly.
Understand the Loan Agreement
Being a first-time borrower, it is very important that you go through the loan terms and conditions to avoid any unpleasant surprises in the future.
So, by following these tips, you are good enough to kick-start your first-ever personal loan journey in Hyderabad. Having a better knowledge of your loan can make your journey smoother and confident while applying for other loans in the future.
Why is your Loan Request Rejected for the First Time?
Before applying for a loan, it is advisable that you gather all the basic information about a personal loan and then proceed ahead. Not many gather enough information about the loans, and because of this lack of information, many requests get rejected. Following are the factors that may result in the rejection of your loan:
- Low credit score.
- Failure to fall under the minimum income criteria
- Insufficient document submission
- Inaccurate information provided in the application
- Applying for multiple loan applications
These are some of the reasons which can impact your loan eligibility. Hence, it is always advisable to keep an eye on your credit score, select the lender who suits your requirements, study the terms and conditions carefully and submit accurate documents. If you are careful with the factors discussed above, you can get approved for the first-time itself!