Finance

5 Things To Consider Before Applying For A 5 Lakh Loan

Finding oneself in need for Rs. 5 lakh loan is a common phenomenon these days. Many banks and other lending institutions are relatively more flexible now in offering loans than they were previously. However, getting the asked for amount instantly is not what every bank will offer you. In fact, most of them do not. For this, you will have to apply for an instant cash loan. Through the option of instant cash loan, you can get help quite easily and quickly.

However, whether you should go for the traditional method of loan or for an instant cash loan is a matter worth considering. So, before you apply for a loan, here are five things you must keep in mind-

The Approval Period

Many banks take longer than a week for the loan amount to be processed and approved. Only then will the amount be transferred to your bank account. With instant cash loan, however, you can get a Rs 5 lakh loan or even more approved within a day only. The amount, too, will be transferred to you as soon as your application process is completed.

So, if you are looking for funds immediately, an instant cash loan is a great option. The benefit of instant cash loan is whether the situation is urgent or not, you will get the loan amount much faster.

Credit Score

Credit score refers to your creditworthiness in numerical values. The higher your credit score is the higher creditworthiness you hold in the eyes of the lender. On the basis of your credit report, the lender can decide whether he can trust you with the loan amount or not.

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The credit score is the entire summation of your credit history up to the present. A bad credit score will lower your chances of getting a loan approved. Even if you manage to get a lender, he will provide the loan at a higher interest rate which, if not paid on time, will further damage your credit score.

Your credit report is a determining factor to decide whether you will get a loan or not. 

A credit score of anywhere above 700 is considered good. But if you do not have the requisite numbers, there are still options to get the loan, just apply for Rs. 5 lakh loan with a low credit score!

Eligibility And Documentation

For an amount as high as Rs 5 lakh, eligibility criteria are not lenient. Your credit score, age, salary etc play quite an important part. If you do not live up to the expectations of your lender there is no chance of you getting a loan. All the requisite documents will be asked for while applying for the loan. The paperwork will be quite a lengthy and tedious process and if they are not up to the mark your efforts will go in vain.

It is, therefore, important to find lenders who are not strict on the point of eligibility. One sure way of finding them is to look for instant cash loans rather than applying in a bank. The eligibility criteria are quite simple even for a Rs 5 lakh loan. Moreover, the documentation process involved in an instant cash loan is next to nil. So, this will make the overall process of application highly effective and efficient.

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Loan Tenure

How much time you are being given to repay a loan is also an important thing to consider. You should always look for a lender who provides a flexible payment tenure. You can trust a lender if he gives you a repayment period as long as 36 months. Once you are in a position to choose between different payment tenures you can easily pick the one most suitable to you.

Depending on your salary or income, you can choose the EMI amount accordingly. An important thing to note about EMIs is that if you choose to go for the option of a high EMI amount, then you can pay the loan much quicker as well as with lower interest charges. On the other hand, if you have chosen a longer tenure, your EMI amount will be low but the accrued interest charges will be high. So, here too, you can choose which EMI payment option suits you best.

Accessibility

Ease of accessibility in getting a loan would be all too welcome. With banks, you often have to visit their branches for loan application. Instant cash loans, on the other hand, allow you the accessibility of their service right from a mobile app. So, you can just sit at your home without needing to go out anywhere and a Rs 5 lakh loan will be sanctioned to you as soon as possible.

All of these factors play an integral role in applying for a loan. Since it is quite likely that you will take a considerable period of time before repaying the loan amount, it is important that you access all the benefits and services you can get from your lender.

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