For many years now, bank loans are usually the last option when it comes to solving a financial problem. Many people tend to use bank loans to resolve their issues immediately and deal with paying the interest later on. That kind of outlook has certainly changed in today's world.
We now look at bank loans for many different purposes aside from needing emergency funds to get us out of trouble. Many people now use bank loans to pursue their business or higher education while others simply want to fund their next big purchase or vacation. Numerous factors influence why people choose to use a bank loan for their financial needs.
If you are curious about how to qualify for a bank loan and the general process of application, you can check the guide below.
Research and Find the Best Bank Loan
With so many banks in India offering different kinds of bank loans, it can be tough to determine which one suits you the best. You should always do your diligence and research what kind of bank loan you need.
Some are meant for cars, personal, business, and even for your education. Do not forget to check the interest rates, any extra charges, and the duration of your loan as well as your agreement.
This will help you formulate how many months you want to pay for the loan and how much you need to budget. Additionally, there are many websites that allow you to calculate your loans before you even apply for them.
Once you have considered all the factors, you can then proceed to the next step.
Compare Rates
Once you have chosen the bank loan that you like, there is one more thing that you need to do before you apply for the loan. You must still be open to changing your mind when a new and better bank loan presents itself.
This is why it is important to compare the rates of other bank loans before you fully decide. There are also a lot of websites that help you compare different bank loans depending on the benefits, the interest rates, and many other features. It is very essential that you compare loans with each other to ensure that you get to choose one that best fits your needs.
You should look out for the most affordable annual percentage rate or APR and the amount of time you need to pay off your debt. These are only a few of the most important elements that you need to consider before you fully make up your mind.
Learn the Requirements for the Bank Loan
Now that you have fully chosen the bank loan that you want, you should now learn and prepare the requirements for the bank loan. A lot of banks demand that you be at least 18 years old and above to apply.
You must also have a good income that can support the lifestyle and assure them that you can pay for your loan monthly. Most banks do not disclose the maximum requirement for each loan as it will always depend on your creditworthiness and if you are trustworthy.
The most effective way to illustrate this is by having a good credit score and providing documents that will prove that you have a job with an income or you own a business with an income.
Some banks send invites to their clients and customers before they can apply for any bank loan. Many banks also require you to undergo a pre-qualification check or a credit score check which may or may not affect your credit score.
Review the Terms and Conditions
Most banks especially those that have an official website will always advertise their financial products online. It is required by law to provide all the details of the bank loan on the website which means that you will also see a copy of their terms and conditions.
The terms and conditions are the guidelines that will tell you how much you can loan and how long you need to pay for it. This agreement will also let you know what you can and cannot do when you apply for the loan.
Many banks forbid their applicants to use their bank loans for betting and many other activities. Always make sure that you read the loan agreements to confirm the total loan amount, your monthly payment amount and your interest rates are correct.
Submitting Your Application
Once you are ready, you can now place your application. You can visit the bank of your choice and apply. Make sure that you bring your documents and have all of the information prepared.
If you apply at the bank's official website, you will need to select which bank loan you like to have and fill up an application form. You will then need to upload the documents on the application form.
Make sure to review all of the information before you submit it. Sign the loan agreement to continue with the application process.
It will take a few days before they will provide you with their decision while when you apply directly at the bank, they can provide you with an answer immediately. It all depends on the bank's processing time so be sure to keep your lines open.
What to Do After Your Application
Once you are approved, you should be able to receive your money within a week. Many banks will require you to open an account or if you already have one, it will be credited to that account.
When you receive your money, you should now formulate a plan on how you need to repay your loan. Most banks offer a repayment plan or have payment options for your convenience but if you want to take control of your finances, go ahead and plan and make a monthly budget.
This will help you avoid late payment fees which can take a toll on your budget as well as your credit ratings.
Also Read: What are 3 types of loans a bank makes?
Conclusion
When it comes to bank loans in India, there are many things to take into account. Make sure to adhere to the advice above to ensure that your application is easy and you have a better chance of getting approved for your bank loan.
