Personal loans are a great financial instrument to give you an instant boost of money when you need it the most. In today's fast-paced life, getting a personal loan online is a matter of a few clicks. Personal loans can help you manage expenses, such as a wedding, home renovation, or higher studies. You can also use them to consolidate debt or pay for expenses while you’re getting a medical treatment. There are a few things to consider when taking a personal loan, which will help you plan the smooth repayment. Here's a checklist that you can use, to make it even more simple while applying for an instant personal loan.

Lender credibility

The first thing to check is the reputation of the lender. Is the lender reliable and established? You can gauge this by the number of years they have been around, the support they provide, the customer reviews they have online, and how promptly they address customer concerns. You may also check out their online interface and the availability of their customer care executives.

Important documents

When you apply for a personal loan online, keep the digital copies of your PAN card, identity proof, employment proof, experience documents, and recent account statements handy. Certain banks may also require Form 16 for the current or the previous 3 financial years. This may be the case if you’re applying for a large amount.

Credit report

The lender may conduct a background check to gauge your financial health and capacity to repay the loan on time. The first step is to check your credit score. A credit score above 700 is considered good and increases the chances of getting a loan smoothly. Most banks give a personal loan even if your credit score is between 500 and 700. Additionally, if you have other loans, the repayment history is verified.

The terms may be different for those who have a better credit score and good repayment history. This could translate to a lower interest rate or pre-payment charges when you apply for a personal loan.

Loan eligibility

Eligibility for instant personal loans is determined by your income, age, bank statements, and other ongoing loans. A bank is more likely to approve your application if your requested loan amount is within what you are eligible for and the EMIs are a small part of your monthly income.

Remember that the bank may deduct processing fees even if your loan gets rejected. So, it’s a good idea to check your loan eligibility before applying for an instant personal loan online.

Repayment capacity

Should you take a loan for a longer or shorter duration? A shorter tenure means the EMIs will be higher. You can use an online EMI calculator when applying for instant personal loans to know your repayment amount.

Consider your liabilities and plan for some emergency expenses before determining the loan tenure. An affordable EMI will reduce your financial burden and lower the chances of missing or delaying on payments.

Flexibility of payment options

With the growing popularity of personal loans, banks may offer affordable and convenient repayment options. Decide whether you want fixed interest rates or floating interest rates. With fixed interest rates, your interest amount and EMIs will not change through the loan tenure. With floating interest rates, you do not need to pay pre-payment or foreclosure charges (charges for closing part or your entire your loan early). Do check the pre-payment and foreclosure terms and charges to make the right decision.

Processing fee and other charges

All instant personal loans involve some processing fee and other charges for verification, processing of paperwork and loan amount disbursement. Find out all the charges on the personal loan app.

Terms and conditions

A written document of the terms and conditions will be provided. Do go through them carefully, so that you can plan your finances better.

Modern banks provide all information on the personal loan app to offer transparent lending services. Most bank websites also have an EMI calculator to help you make informed decisions. You can post queries or request a callback to clear your doubts before applying for an instant personal loan via the app.

This is a PR article which has been published as received without any editorial enhancement, or modification.. The Telegraph Online does not endorse or guarantee the accuracy, reliability, or completeness of any information presented in the article. The organization is not responsible for any errors or omissions in the content or for any losses, damages, or injuries arising from the use of the information provided in the article.