Personal Loan: How to choose the right payment plan? Here are some essential points to keep in mind

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Frequently Asked Questions (FAQs) The required documents for a personal loan application can differ based on the lender, but here’s a general checklist: Optional documents (depending on lender) The approval duration for a personal loan can vary based on the lender and your specific circumstances, but it generally falls into these categories: There are various alternatives to personal loans that you might consider, each with its own advantages and drawbacks: The best option for you depends on factors like the amount needed, interest rates, repayment terms, and risks. Consider your specific needs and financial situation before deciding.

While there isn't a universal minimum credit score requirement for personal loan approval in India, most lenders seek credit scores ranging from 720 to 750 and higher to grant favorable interest rates and loan conditions. Applying for a personal loan can impact your credit score in a few ways, both positive and negative.

Here's a breakdown of what to expect: Every time you formally apply for a loan, including a personal loan, the lender performs a hard inquiry on your credit report. This inquiry can cause a temporary dip in your credit score, typically by a few points.

It's important to note that multiple hard inquiries within a short period (usually considered within 30 to 45 days) can have a more significant impact on your credit score compared to a single inquiry. This is because lenders might view this as you being “credit hungry" and potentially a higher risk borrower.

Obtaining a new loan, such as a personal loan, is categorised as "new credit" by credit agencies and is incorporated into your credit score. Regular and timely payments on your personal loan can notably boost your credit