Where can you apply for a personal loan? Check these 5 trusted options

Borrowers can seek a personal loan from any of the prominent loan providers which include banks, non-banking financial companies, digital lending platforms, among others.

Typically, one tends to seek a personal loan from a bank, but if the bank turns down the application, then you can approach an NBFC or digital lending app.

These are the five key options for seeking the loan:

1. Banks: As mentioned above, one can seek a personal loan from a different financial institution which includes public sector banks such as State Bank of India (SBI), Punjab National Bank, Bank of Baroda, or private sector banks such as ICICI Bank, Kotak Mahindra Bank and Axis Bank.

Advantages of seeking loan from bank

A. Competitive interest rates.

B. Wide range of personal loan amounts.

C. Established customer service networks.

2. Non-Banking Financial Companies (NBFCs): Some of the NBFCs include Bajaj Finserv, Tata Capital, Bajaj Finance, Muthoot Finance, Aditya Birla Finance also provide personal loans. Some of the advantages of NBFCs include flexibility and faster approval processes than banks.

3. Digital Lending Platforms: There are a number of digital lending platforms which include Paytm, MoneyTap, KreditBee, CASHe and Lendingkart, among others. Some of the key advantages of availing a personal loan from these applications include minimal paperwork, instant approvals and disbursals.

4. Peer-to-Peer (P2P) lending platforms: There are some peer-to-peer lending platforms that provide personal loans, which include Lendbox. These platforms connect borrowers with individual lenders and use as a platform to facilitate between the two. Some of the advantages include transparent terms and potentially lower interest rates.

5. Co-operative Banks: Though it is not a very sought after option, borrowers tend to approach smaller institutions which offer personal loans to members. They are quite popular among semi-urban and rural areas. Some of the key advantages include personalised services and competitive rates for members.

Steps to apply for a personal loan:

1. Eligibility: First of all, you need to make sure you meet the lender's criteria such as income, age, credit score.

2. Documentation: Some of the common documents include ID proof, address proof, income proof, and bank statements.

3. Compare options: You can use online loan comparison tools to check interest rates, processing fees, and repayment terms.

4. Online or offline application: Apply through the lender’s official website, mobile application, or by visiting the nearest branch.

5. Loan disbursal: Post-approval, the loan amount is usually credited directly to your bank account.

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