It is an unsecured loan taken by individuals from a bank or a non-banking financial company (NBFC) to meet their personal needs. It is provided on the basis of key criteria such as income level, credit and employment history, repayment capacity, etc.
Unlike a home or a car loan, a personal loan is not secured against any asset. As it is unsecured and the borrower does not put up collateral like gold or property to avail it, the lender, in case of a default, cannot auction anything you own. The interest rates on personal loans are higher than those on home, car or gold loans because of the greater perceived risk when sanctioning them.
Personal Loan is your solution for instant cash and can be used for traveling, wedding, medical emergency, home renovation, or anything else. To know how to get an easy Personal Loan, first check the personal loan Eligibility criteria. Know your EMIs using the Personal Loan EMI Calculator and apply for a personal loan to finance your needs. Make sure you maintain a good credit score and a clean credit history to avail personal loan easily."
Individuals who can take a Personal Loan
Documents required for Personal Loan Application form
Eligibility criteria
Although it varies from bank to bank, the general criteria include your age, occupation, income, capacity to repay the loan and place of residence.
To avail of a personal loan, you must have a regular income source, whether you are a salaried individual, self-employed business person or a professional. An individual's eligibility is also affected by the company he is employed with, his credit history, etc.
For what purposes can it be used?
It can be used for any personal financial need and the bank will not monitor its use. It can be utilised for renovating your home, marriage-related expenses, a family vacation, your child's education, purchasing latest electronic gadgets or home appliances, meeting unexpected medical expenses or any other emergencies. Personal loans are also useful when it comes to investing in business, fixing your car, down payment of new house, etc.
Repaying the loan
Unlike a home or a car loan, a personal loan is not secured against any asset. As it is unsecured and the borrower does not put up collateral like gold or property to avail it, the lender, in case of a default, cannot auction anything you own. The interest rates on personal loans are higher than those on home, car or gold loans because of the greater perceived risk when sanctioning them.
Individuals who can take a Personal Loan
- Salaried Employees
- Salaried doctors
- Employees of Public and private limited companies
- Government sector employees including Public Sector Undertakings and central and local bodies
- Minimum age of 21 years Maximum age of 60 years at loan maturity
- Minimum net monthly income – Rs. 15,000 or $250
Documents required for Personal Loan Application form
- Photograph
- Age proof ID
- proof Income
- proof Bank statement
- Residence proof
- Signature
- verification proof
Eligibility criteria
Although it varies from bank to bank, the general criteria include your age, occupation, income, capacity to repay the loan and place of residence.
To avail of a personal loan, you must have a regular income source, whether you are a salaried individual, self-employed business person or a professional. An individual's eligibility is also affected by the company he is employed with, his credit history, etc.
For what purposes can it be used?
It can be used for any personal financial need and the bank will not monitor its use. It can be utilised for renovating your home, marriage-related expenses, a family vacation, your child's education, purchasing latest electronic gadgets or home appliances, meeting unexpected medical expenses or any other emergencies. Personal loans are also useful when it comes to investing in business, fixing your car, down payment of new house, etc.
Repaying the loan
It can be repaid in the form of EMIs via post-dated cheques (PDC) drawn in favour of the bank or by releasing a mandate allowing payment through the Electronic Clearing Services (ECS) system.
Prepayment/foreclosure charges
If you decide to pay off your loan before its tenure has completed, you get charged an additional fee called prepayment/foreclosure charge/penalty. This penalty usually ranges between 1 and 2% of the principal outstanding. Some banks, however, charge a higher amount to foreclose a loan.
Prepayment/foreclosure charges
If you decide to pay off your loan before its tenure has completed, you get charged an additional fee called prepayment/foreclosure charge/penalty. This penalty usually ranges between 1 and 2% of the principal outstanding. Some banks, however, charge a higher amount to foreclose a loan.
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