A personal loan helps you in situations where you may not have the required finances, like paying for higher education, weddings, medical emergencies and more.
But what if you have a low salary and are wondering if you will qualify for a personal loan? You may assume that it is not possible to get a loan but one such option is a low salary Personal Loan. But here’s a silver lining. You can apply for a personal loan even if your income is low.
Let’s look at how you can avail a personal loan:
1.Check your eligibility
Before you proceed to apply for a personal loan, check your eligibility. Different financial institutions and banks have different rules and guidelines for the eligibility. Make sure you meet the eligibility criteria before you apply.
- Fill the application
Once you are eligible for a personal loan, you can fill the requisite form. You will be required to complete basic, personal and salary details. Accordingly, you will be provided with loan offers. You can also check your EMI through the personal loan EMI calculator available on the lender’s website.
- Submit documents
Once you have filled out the form, you will be asked to submit the necessary documents. You may need to submit ID proof, salary receipts, address proof, etc. depending upon the lender’s requirements. You can submit the documents manually by visiting the branch or uploading the documents online, depending on the lender.
- Verification and approval
Once you have completed the application process, the lender begins to verify your documents and complete the loan procedure. You may need to meet the bank official for a final processing. Once they complete verification procedures, they will approve your loan application.
- Loan against your investments
Having a low income may mean you may not have a lump sum kept aside . Therefore, to prepare yourself for any contingencies, you may have invested some of your savings. Do you know that you can avail a loan with the help of your investments? There are various instruments such as Fixed Deposit (FD), Insurance policy, etc., against which banks allow you to apply for a personal loan irrespective of your low income.
Additional Reading: How to Get a Personal Loan When You Have a Low Salary?
- Loan on your Fixed Deposit (FD)
You can take a loan against your FD amount. The best part about itis, you are not required to furnish your salary proof to take a loan against the fixed deposit. Depending on the lender’s terms, you may receive 80-90% of your FD amount as a loan. Moreover, the process of taking a loan against your FD is also comparatively simpler and faster.
- Loan against your insurance policy
Many insurance companies provide loan facilities against an insurance policy. The interest rate on loan against an insurance policy is much lower than a regular loan from banks/financial institutions. However, the amount of loan depends upon the surrender value of the insurance policy. It could also dependent upon your premium amount and your credit score.
Building wealth takes time, but it should never decide how you live your life. Loan acts as a catalyst in supporting your finances if you have begun on the path towards wealth creation.