Thursday, September 13, 2018

How to Get a Personal Loan When You Have a Low Salary?

Financial emergencies may crop up unannounced in anybody’s life. At such times, all you want is a hassle-free source of funds to tide over the crisis at hand. The easiest solution lies in availing a Personal Loan. 

But what if you have just begun your career and do not have a handsome pay packet yet? For people facing such a dilemma, a low salary Personal Loan is the answer. So even if you do not draw a very high salary, you can try to apply for a Personal Loan for a 20k salary.

How to get a Personal Loan for low salary

While traditional lenders may shy away from granting low salary Personal Loans, you can apply for a Personal Loan for low salary from other leading, full-range financial service providers. 

For instance, if you are drawing a salary for at least six months you can upload your KYC documents such as Aadhaar card, PAN card or passport, an address proof, your salary slips for the past three months, a passport size photograph and then submit your application.

After document verification, you can be eligible for an instant approval on a Personal Loan in spite of a low salary. Some financial services providers also provide the facility of an instant loan without too many documents.

Collateral-free loan

If you are contemplating applying for a ow salary loan, you have little reason to worry as there is no security or collateral required for such a loan. Further, low salary Loans are instant loans without too many documents and do not require you to provide any security or collateral. Once your eligibility is verified by the bank, the loan amount is disbursed to your account within 24 hours.

Competitive rates of interest

The interest rate on a Personal Loan for a 20k salary varies between 15-24%, with an additional processing fee of 1.5-2%, depending upon your eligibility. You can choose a repayment tenure of 12 to 60 months depending on your convenience. 

With such easy terms and conditions for repayment, a low salary Personal Loan can be a shot in the arm if you are in a financial bind, such as a medical emergency or clearing your debt. It can also come to your aid for a variety of other reasons.

Personal Loan uses

For instance, if there is a wedding in your family or home renovation work, a low salary Personal Loan can come to your aid. You may even take a loan if you have been planning to take a vacation. 

In fact, it is always wiser to take a Personal Loan for a vacation rather than burdening your credit card, as a Personal Loan is a more economical form of credit with the leeway to make repayments over a longer period.

Your credit score matters

While there is no dearth of low salary Personal Loan products, you may need to check your eligibility criteria for such loans. A Personal Loan like any other form of credit is disbursed after a lender is assured of your repayment capabilities. 

One criteria to assess creditworthiness is your credit score, assigned to you by a credit bureau. This is a three-digit score in the range of 300-900, assigned to you based on your credit behaviour or credit repayment patterns.

To avail credit including a Personal Loan for low salary, you need to ensure your credit score is at least 750 and above. A high credit score can be maintained by following basic financial discipline such as timely repayment of your existing credit lines such as credit cards, keeping your credit utilisation (or the amount of credit you use, as against the total credit limit made available) under 30% and not applying for too much credit in quick succession.

Plan your repayment

If your credit score is satisfactory, you can be reasonably sure of accessing a Personal Loan for low salary at competitive rates of interest. You can also check your eligibility for such a loan by using online tools such as a Personal Loan EMI calculator to plan your repayment schedule. Opting for a low salary Loan, can help you to not only take care of your financial need at hand, but enhance your credit as well.

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