Personal Loan

While you can apply for a personal loan directly with banks/NBFCs, making direct loan applications with multiple lenders can significantly reduce your credit scores and thereby, reduce your chances of getting the loan.

To avoid this, you should visit online financial marketplaces like Paisabazaar, which allows you to compare personal loan offers from multiple partner lenders without adversely impacting your credit scores.

Personal loan interest rates offered by leading banks and NBFCs start from 10.49% p.a. depending on the credit profile of their loan applicants. However, some public sector banks may offer lower interest rates to their personal loan applicants.

Banks and NBFCs check an applicant’s personal loan eligibility based on his age, credit score, income, loan repayment capacity, occupation profile, employer’s profile, etc. Due to varying credit risk policies, the eligibility criteria may vary across lenders.

Therefore, applicants would have to check their eligibility by individually visiting the branch or website of various banks and NBFCs.

For most individuals, a lender offering the lowest interest rate on personal loans would be the best as it will help them save on the overall interest cost of the loan. However, besides considering the interest rates, parameters such as the loan amount, tenure, processing fees and the time taken for loan approval and disbursal must also be considered when looking for the best bank for availing a personal loan.

Applicants with a credit score of 700 and above usually have higher chances of availing personal loans. However, many banks and NBFCs offer loans to individuals with low CIBIL score/credit score but charge higher interest rates to compensate for the higher credit risk associated with those lenders.

The tenure of a regular personal loan usually ranges from 1 year to 5 years. However, some lenders offer maximum loan tenure for 6 to 8 years.

The EMI on Rs 5 lakh personal loan will depend on the interest rates charged by the lender for the loan tenure availed by you. Hence, use an online EMI calculator to calculate your EMI for different tenure and interest rate values.

Instant personal loan is a personal loan variant, which is usually disbursed within a few minutes of making the loan application. This loan facility is usually pre-approved in nature and lenders usually offer this facility to their select existing customers having a good credit profile.

Regular personal loan schemes, on the other hand, have the same features as instant personal loans except that regular personal loan schemes have turnaround time of 2-7 days for loan disbursal and the eligible loan amount is usually higher than what is offered through instant personal loan by the same lender.

The minimum monthly salary required to avail a personal loan varies from lender to lender. However, for large lenders like private and public sector banks, the minimum income eligibility is Rs 15,000 per month and above.

Yes, you can get a personal loan without providing salary slips. You can submit your bank account statement/ a copy of Form 16/ employee certificate from the employer, etc. as proof of income to fulfill the eligibility criteria.

However, it is always recommended to confirm the list of required documents with the lender as it may vary from one bank to another.

Yes, you can apply for a personal loan even if you already have a home loan. However, the chances of getting the loan approved will depend on whether you have adequate repayment capacity to repay the proposed loan.

Lenders are free to levy prepayment/foreclosure charges on personal loans availed at fixed interest rates. However, the RBI has barred the lenders from levying these charges on loans availed at floating interest rates.

In some cases, you may cancel a personal loan after disbursal subject to the terms and conditions of the lender. Loan cancellation will lead to cancellation charges and processing fees.

Please note that all banks do not allow loan cancellation once the amount is disbursed. However, you can always prepay the loan amount as per the terms and conditions of the bank and save on the interest component.

Some lenders use EMI/NMI ratio while some may use a multiplier method to determine their applicant’s eligible loan amount. As these ratios may differ across lenders, the maximum loan amount that you can avail on Rs 60,000 salary would also vary.

Traditionally, personal loans are unsecured loans, which implies that the borrower does not need to pledge collateral or security to avail the loan. However, some lenders also offer secured personal loans wherein the borrower needs to provide security or collateral to avail the loan.

An applicant should opt for the secured loan facility only when he is ineligible for availing unsecured loan or is charged very high interest rates for it.

Pros: Personal loan comes with several benefits like no restrictions on end usage (other than speculation), no collateral/security requirements, minimal to no documentation and quick processing.

Cons: The interest rates are usually higher than its secured alternatives like gold loan, loan against property, etc. Also, its short repayment period/tenure (usually till 5 years) leads to higher EMIs, which in turn reduces the EMI affordability and overall loan amount eligibility of the borrower.

The minimum income requirements set for availing personal loans vary across lenders. While the minimum monthly salary requirements set by top lenders usually ranges between Rs. 15,000 and Rs 30,000, some lenders also offer loans to applicants having lower monthly income.

Yes, you may avail personal loans from multiple lenders at the same time, provided the lender of your second personal loan is satisfied with your repayment capacity. However, it is better to take a single loan of a larger amount from the lender providing lower interest rates and/or better terms and conditions.

Yes, the proceeds of a personal loan can also be used for financing various business requirements except for any speculative activities.

You can make personal loan EMI overdue payments online through the bank’s internet banking platform, mobile application, UPI app or other digital payment systems such as NEFT/RTGS, digital wallets (e-Wallets) and payments apps.

You can also visit the lender’s branch to make overdue payments through offline modes like cash, cheque and demand draft (DD).

Lenders offer personal loans to pensioners in the form of pension loans. However, these loans are offered only to those pensioners who maintain their pension account with the respective bank.

Those who had availed their personal loans at higher interest rates and are now eligible for lower interest rates due to their improved credit profile should avail balance transfer facility.

However, before making the transfer, they should calculate the net savings from the transfer after factoring in various costs associated with the transfer. If the savings are not significant, then they should continue with their existing loan.

Your existing lender will provide you with a no-dues certificate after the complete repayment of your personal loan.

If your EMI bounces, the lender may charge penalty fees, EMI bounce charges, or cheque bounce charges. Additionally, the default can be reported to credit bureaus, which may negatively impact your credit score.

Personal loan insurance can provide financial security by covering your outstanding loan repayments in case of unforeseen circumstances like death, serious illness or disability. However, purchasing this insurance is not mandatory while availing personal loan. If your existing life insurance policy already offers adequate coverage for loan repayment, you may not need to purchase additional loan protection policies.

To get a personal loan from any financial institution, you would need to provide them with a legitimate income proof, comprising Bank Statement, Salary slips, Letter of Employment from employer etc. You would not be able to avail a personal loan from a Bank or NBFC without income proof. In case of a pre-approved loan, where the lender already has proof of your income, there may be no need to re-submit income proof.

Repo rate is the rate at which the RBI lends to Banks. It has a direct impact on the Bank’s lending rates. If repo rates go up, interest rates for personal loans are also likely to increase.

No, insurance for personal loans is not mandatory. The insurance, however, can protect you in case of unforeseen circumstances like death, disability or select circumstances that result in loss of income. Personal loan insurance provides coverage to manage EMIs during these difficult times. Usually, this insurance is provided by the lender’s partner only and cannot be taken separately. If you take insurance for a loan, the premium is usually added to your loan EMI.

No, personal loan or any kind of loan is not treated as your income, and is not taxable.

Some lenders use a multiplier method to calculate your eligibility, where your net monthly income (NMI) is multiplied by a pre-decided number (usually between 10 to 24) to calculate eligibility. If the number, for example is 15, then you may get upto Rs 4.5 lakh. But your existing debt also plays a big part in determining how much personal loan you can get. Do note, lenders prefer that the EMI to NMI should not be more than 50%-55%. So even if you have no debt, lenders would prefer to offer a loan amount and tenure that would keep your EMI around Rs 15,000 (for a salary of Rs 30,000).

With a CIBIL of 600, it would be very difficult to get a personal loan. Banks usually prefer offering personal loans to consumers with a CIBIL Score of 750 and above. Even with a score of over 700, you may have options. But at 600, you should opt for secured options like Gold Loan. Also, work on your score to ensure you have more options in future.

Yes, you can close your personal loan before the tenure of the loan ends. But you would need to pay pre-closure charges to the lender Bank or NBFC. Pre-closure charges vary lender to lender and is usually 2%-5% of the outstanding loan amount. Generally, the earlier you close your loan, higher the pre-closure charges. For instance, HDFC Bank charges 4% of the principal outstanding if you close the loan in the first 24 months, 3% of in case of 24-36 months and 2% if you close after paying 36 months of EMIs. Do note you also pay GST on the pre-closure charges.

Once you pay the pre-closure charges along with the full outstanding amount of the personal loan, ensure you get a no dues or loan closure certificate from the lender.

Paisabazaar.com offers personal loans through a fully digital process with minimal to no documentation, thereby facilitating maximum convenience and faster disbursals. For pre-approved offers, the loan amount can be credited on the same day of application – subject to the applicant’s credit profile.

Instant personal loans are usually pre-approved by lenders and offered to their select existing customers based on their credit profiles. Since the lender already holds the customer’s KYC details—such as proof of identity, address and income – no fresh documentation is usually required during loan processing.

Prospective borrowers can start by checking personal loan offers from banks or NBFCs where they already have deposit, loan, or credit card accounts. This is because most lenders offer preferential interest rates to their existing customers. Additionally, they can visit online financial marketplaces like Paisabazaar to compare personal loan rates and other loan features offered by various banks and NBFCs. Then, they should use the Personal Loan APR Calculator to compare the actual borrowing cost after factoring in the interest rates, processing fees, login fees, etc.

The primary objective of transferring personal loan to other lenders at lower interest rates is to generate savings in interest cost. However, some also transfer personal loans due to service issues or reduce their EMI burden by opting for longer tenure than the residual tenure of the original loan. Hence, the best bank for personal loan balance transfer would depend on the needs of the borrower. The best way to find the optimum personal loan balance transfer option is to visit online financial marketplaces like Paisabazaar and compare personal loan balance transfer options offered by multiple lenders.

Banks and NBFCs usually offer pre-approved personal loans to their select existing customers based on your credit profile. Such pre-approved loans are usually disbursed within a few seconds or minutes of making the loan application.

You can pay your personal loan EMIs by issuing Standard Instructions (SI)/ NACH/ECS mandate to your bank or by submitting post-dated cheques to your lender. Some lenders also require the employers to deduct the EMIs from their employee’s (borrower’s) salary.

Choosing the right tenure for your personal loan is crucial as it directly impacts your EMIs as well as the total interest cost of the loan. Note that your EMI decreases with the increase in the loan tenure and vice-versa whereas longer loan tenure results in higher total interest cost and vice-versa. Thus, opt for longer tenure only when you lack adequate repayment capacity after considering your monthly contributions for your unavoidable financial goals. Otherwise, opt for a shorter tenure.

Your chances of loan approval may vary from one lender to another based on the varying credit risk assessment of the applicants and the internal credit risk policies of the lenders. On rejection of your personal loan application, first approach banks/NBFCs with whom you maintain your deposits, loans and/or credit card accounts as many lenders prefer to lend personal loans to their existing customers. Then, visit online financial marketplaces to compare the personal loan offers from other lenders and then, apply for the loan accordingly.

Lenders offer personal loans to retired individuals in the form of pension loans. Just like personal loans, pension loan proceeds can be used for various personal financial needs like children’s marriage, home renovation, medical bills, etc. However, unlike personal loans, retirees can avail pension loans only from banks with which they maintain their pension accounts.

Yes, you can avail a personal loan without providing salary slips. You can submit your bank account statement/ a copy of Form 16/ employee certificate from the employer, etc. as proof of income to fulfill the eligibility criteria. However, it is always recommended to confirm the list of required documents with the lender as it may vary from one bank to another.

The minimum income requirements set for availing personal loans vary across lenders. While the minimum monthly salary requirements set by top lenders usually ranges between Rs. 15,000 and Rs 30,000, some lenders also offer personal loans to applicants having lower monthly income.

Yes, you can apply for a personal loan even if you already have a home loan. However, the chances of getting the loan approved will depend on whether you have adequate repayment capacity to repay the proposed loan.

Many lenders offer pre-approved personal loans with instant disbursals to their select existing customers having good credit profiles. Thus, consumers should first check for such pre-approved offers with banks and NBFCs with whom they have an existing banking relationship.

After checking for pre-approved offers, visit online financial marketplaces to compare personal loan offers from various banks and NBFCs offering quick disbursals, preferably within the same day of making the loan application.

Personal Loan EMI Calculator helps consumers determine the amount they will have to pay each month towards servicing their personal loans.

Using this online calculator, consumers can also quickly calculate the interest cost and total amount payable against various combinations of loan amounts, interest rates and loan tenures in no time.

The consumers can also determine the best possible tenure for their personal loans after considering their repayment capacity and plan their loan repayment better.

Consumers can check instant loan offers straight away from the respective mobile apps of the bank/NBFC with which they have/had a banking relationship. Here we have listed top 10 instant loan apps in India, which individuals can use to apply for instant personal loan online:

1. Paisabazaar App
2. HDFC Bank Loan Assist App
3. IDFC First Bank Limited
4.KreditBee
5. Money Tap
6. PaysSense
7. CASHe
8. YONO SBI
9. Open by Axis Bank App
10. SMFG India Credit InstaLoan App

Students can apply for personal loans only if they satisfy the various eligibility requirements related to age, income, credit score, etc. set by the lenders.