An instant personal loan is a low-cost and convenient product. It is unsecured which means no collateral needs to be deposited. The entire process of obtaining the loan is online that cuts the hassle of physical visits and paperwork. The outstanding portfolio of small-ticket loans with lenders had reached ₹39,700 crores in March 2020 from ₹26,700 in March 2019 growing 48% in a year. Its increasing popularity is due to its simplicity and the ability to cater to diverse needs like two-wheeler purchases, travel expenses, medical emergencies, wedding costs, home renovation and education and course fees.
But LazyPay personal loan lenders require you to tick off a few eligibility boxes. This makes it easy for you to meet both planned and unplanned expenses. You may also pick the most suitable repayment period between 3 to 24 months at affordable interest rates. So, here’s how to qualify for a personal loan in 2023 and reap the benefits.
Complete KYC
The lender will allow using your limit freely once the KYC procedure is done. The RBI has made it mandatory for all financial institutions. This is necessary to verify the address and identity of all customers who would like to carry out any transaction with them. It prevents any fraudulent activities and keeps the lenders safe. Choose either the Aadhaar-based KYC or the In-Person Verification (IPV) KYC. You may complete it on the LazyPay app which can be downloaded from the Google Play Store or the App Store. It is also the first step to activating your enhanced credit limit if any.
Salaried Individual
Make sure you have a fixed income from your employer. A LazyPay personal loan (Xpress cash) is specifically designed for salaried millennials between the ages of 22 and 55 years. This is because you have regular predictable earnings and are capable of clearing the EMIs. You are less likely to default due to income stability which might otherwise attract penalties. This is also difficult for the digital lender since a personal loan is unsecured without collateral. They obviously need the loan to be repaid and a salaried person is usually considered to be more credible.
Loan Amount
Try to get loans that can be paid back without hassle. A reliable lender offers up to ₹5 lacs with a ₹1 lac credit extension limit. But avoid requesting more than required. The application will be turned down if your monthly income is too low for the desired loan. Know your daily budget well, consider existing liabilities, check the interest being charged and find out the processing fees to arrive at the right amount. Make sure the EMIs are not more than 40% of your total salary.
Credit Score Check
This is the most vital parameter for an unsecured loan. Since there are no assets pledged as a safety net, the digital lender solely depends upon your score to approve the loan. A ‘good’ score between 670 and 739 shows that you have been transparent with previous payments. You are less likely to default on the EMI payments and clear the instalments in a timely manner until the loan is fully paid. Individuals who come across as financially committed have a high chance of receiving the loan of their choice. The closer your score is to 900, the better your credibility as a trusted borrower to get the loan. Make sure the number never falls below 580 which is considered ‘poor’ in the financial world.
Existing Debts
Check if you have too many pending debts already. While a personal loan can be used for debt consolidation, try not to use it simply to stay afloat. Clear the previous payments for a clean financial situation. Bring down the debt-to-income ratio below or equal to 36%. It should never be as high as 43% which could be troublesome. Pay off the most expensive ones first and keep track of your bills. Automate the payments, if possible, to avoid forgetting. Plan for prepayment as well to be free of the burden quickly.
Updated Documents
You will require PAN card, identity proof and address proof via Aadhaar card, bank details for repayment set up and a pen and a paper for signature upload. The documents must be updated and contain complete information true to your knowledge. Inadequate or false data can grow suspicion and lengthen the verification methods.
The loan application might be cancelled altogether if the papers are fake. So, cross-check each one carefully and make sure it is updated to avoid complications in the loan disbursal. Also, your signature must match the other documents else you could have to go through the entire loan process once again.
Putting these tips into action can help qualify for a loan without hiccups. Pay interest only on the amount used for a seamless borrowing experience in 2023 and beyond.