Easy steps to get a Personal Loan through Savings Account
3 min read
May 16, 2024
A Personal Loan can be an ideal solution when you need quick financial support for unexpected expenses, major purchases or special events. Known for their simplicity and accessibility, Personal Loans are a popular choice among borrowers. Let us understand how to get a Personal Loan through a Savings Account and determine if this type of loan is the right choice for your financial needs.
How to get a Personal Loan through a Savings Account
Getting a Personal Loan through your Savings Account involves several steps, which can vary slightly depending on your financial institution. Here's a general pathway:
- Step 1: Review your Savings Account to ensure it reflects consistent and regular savings.
- Step 2: Check for any pre-approved loan offers from your bank, which can often be found through Internet or mobile banking.
- Step 3: Apply for the Personal Loan directly through your bank’s website or by visiting a branch. Ensure your documentation is in order, including identification and proof of address.
- Step 4: Discuss your loan options, focussing on the amount, tenure and interest rates. Use your Savings Account as a bargaining chip to secure better terms.
Key factors lenders evaluate when approving Personal Loans
When applying for a Personal Loan, lenders evaluate several critical factors to determine your eligibility. Understanding these factors can significantly enhance your chances of approval, especially when you're exploring how to get a Personal Loan through a Savings Account.
1. Credit score: Your credit score is a vital indicator of your creditworthiness and is the most crucial factor lenders consider when approving a Personal Loan. A high credit score demonstrates that you are a responsible borrower, decreasing the likelihood of defaulting on the loan.
2. Income : Income stability is essential for lenders. Lenders will evaluate your salary, the nature of your employment and other income sources to ensure you can manage the loan alongside your regular expenses.
3. Debt-to-income ratio: This ratio is used to assess how much of your income is allocated towards debt repayment, helping lenders determine if you have the financial capacity to take on additional debt. A high debt-to-income ratio might signal financial overextension, potentially leading to loan denial.
4. Employment history: A consistent employment history reassures lenders of your financial stability and ability to repay the loan. Long-term employment in a stable job sector suggests financial security, improving your prospects for loan approval.
How can you use a Savings Account to get a Personal Loan?
Your Savings Account serves multiple roles in securing a Personal Loan:
- Proof of financial health: Regular deposits and a growing balance are indicators of stable finances.
- Collateral alternative: While Personal Loans are typically unsecured, demonstrating the availability of funds can act as a psychological collateral for lenders.
- Relationship leverage: A long-standing relationship with your bank, evidenced by your Savings Account, can facilitate smoother negotiations and quicker loan approvals.
Also Read: Top 10 reasons for getting Personal Loans
Conclusion
Leveraging your Savings Account to secure a Personal Loan can simplify your access to funds when you need them the most. A Personal Loan can provide the necessary financial flexibility when you need it most, whether for unexpected expenses or significant life events.
With Axis Bank, you can access Personal Loans up to ₹40,00,000 with competitive interest rates starting at 10.99% p.a.. You can reap the benefits of an online, paperless application process and enjoy quick approval within 30 seconds, making it easier to manage life's big expenses.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.
