How to check your Personal Loan Status?

A personal loan is a type of unsecured loan that can be used for a variety of purposes like consolidating debt, financing a wedding, paying for a medical emergency, purchasing or renovating a new property, and so on. It is a popular loan option because of its quick disbursals and competitive interest rates. You can also get tax deductions if you use personal loans to start a business or renovate your property.

Lenders offer personal loans solely on the repayment capacity of the individual. However, since personal loans are unsecured loans, they often charge higher interest rates. If you cannot keep paying their monthly installments, it will negatively impact your credit score. Personal loans are a great option if you want quick cash or want to consolidate debts, but you should consider their potential pros and cons before availing of them.

Pros of availing of personal loans

Here are a few advantages of availing of personal loans.

• Quick access to funds: Personal loans are one of the most popular loan options because of their fast disbursals. Lenders offer personal loans on the basis of a borrower’s repayment capacity like income or credit scores. Personal loans also have flexible repayment options, fixed monthly EMIs, and comparatively lesser interest rates than other unsecured loan options.
• Building credit score: If you want to build a credit history, you can take a personal loan.. Since personal loans require you to pay off a fixed EMI amount every month, it is a good way to prove that you can repay debts on time. You can budget and plan your finances accordingly and build your credit history.
• Can be used for a wide variety of purposes: Another reason why personal loans are very popular is that they can be used for any purpose. You can consolidate debts, pay for a medical emergency, go on your dream vacation, or renovate your kitchen.

Cons of taking personal loans

Here’s why availing of personal loans may also backfire.

• Higher interest rates: Personal loans are unsecured loans, leading them to have comparatively higher interest rates than other loans. Make sure to evaluate your income and assets before taking a personal loan, as their monthly EMI amount would also be higher. Use a loan EMI calculator from Andromeda to gauge the EMI amount, plan your finances accordingly, and then avail of the loan.
• Risk of default: Since personal loans are unsecured loans, if you are unable to pay the monthly installments, there is no collateral to back you up and you run the risk of defaulting on your loan. To be on the safer side, you can apply for a joint loan with a co-applicant, who may take on the EMI burden if you are unable to do so.
• May impact credit scores: Every time you apply for a loan, lenders conduct a hard inquiry into your credit. These inquiries may impact your credit scores. If you use up too much available credit, it may also negatively impact your credit scores.

Can personal loans be secured?

You can secure your personal loans with collateral like a mortgage or a car and negotiate with your lenders for lower interest rates. Securing your personal loan with an asset becomes particularly helpful if you do not have good CIBIL scores. If you have missed paying EMIs, do not have a steady income, or have multiple ongoing loans, lenders may be reluctant to offer you a personal loan. In such cases, you can still make use of personal loans with reasonable interest rates if you can provide collateral.

Who can avail of personal loans?

Individuals between 21 to 60 years of age can take out personal loans. Both salaried and non-salaried individuals are also eligible to take personal loans. If you work at an organization, you must have a minimum of one year of experience with your current employer and at least two years of total employment. You must also be able to provide three months’ salary slips. If you are self-employed or run a business, you must provide alternative proof of income like business profit records, business address proof, or invoices. Most importantly, you must have excellent CIBIL scores and a steady income stream to avail of personal loans.

How to check your personal loan status?

The process of checking loan status may be different for every lender. Typically, banks and NBFCs provide you with an application number or a reference number that you can use to check if your loan has been approved or rejected. To check your personal loan status, follow these steps.

• Head to the official website of the lending firm, from where you have applied for your personal loan.
• Use your login ID and password to log in to the loan portal. You may also be asked to enter your contact number, registered birth date, and other basic details to log in to the portal.
• Once you have logged in, look for options like ‘Check Loan Status’ or ‘Application Status’ in the ‘Products and Services’ section of the web page.
• When you applied for your personal loan, you must have received a loan application number. Enter the number on the website. You may also be asked to verify your mobile number with an OTP.
• Follow the prompts to check your personal status. It could either be accepted, rejected, or in the processing stages.

If you are unable to log in and check your personal loan status or have any concerns regarding your loan application, reach out to your lenders’ customer service immediately.

When are personal loans a bad idea?

If you have a habit of overspending on unnecessary items and have racked up a huge credit card debt, it can be tempting to keep taking personal loans to consolidate them. However, if you cannot pay off their monthly EMIs, you will be in trouble. Also, every time you take a loan, your lender conducts a hard inquiry on your credit score. Availing of too much credit can negatively impact your credit score.

Make sure to submit documents with the latest and most updated information, when applying for a personal loan. Check your credit statements to ensure that there is no discrepancy. Once you have applied for a personal loan, lending firms will reach out to you within a week or two if you meet the eligibility criteria. While personal loans are a great option to get access to quick funds, there is also the risk of overborrowing and higher interest rates. It is very important to consider your financial situation and evaluate the loan terms, interest rates, and repayment tenure, before signing up for a personal loan.