Personal Loan

Personal Loan Interest Rates

Personal loan interest rates offered by private sector banks usually start from 10.49% p.a. However, some public sector banks may charge lower interest rates on personal loans. The final interest rates offered by banks and NBFCs on personal loans will depend on several factors, such as the desired loan amount, credit score, income, etc.

Comparing Interest Rates of Various Banks & NBFCs in India

Calculate your Personal Loan EMI

Get a Personal Loan Online at low interest rates Apply Now

Features & Benefits

• Collateral-free loan
• No end-use restriction
• Interest rate usually starts from 10.49% p.a.
• Loan amount of up to Rs. 40 lakh, which can exceed depending on lenders’ discretion
• Repayment tenure up to 60 months, which may exceed on case-by-case basis
• Top up loans for additional requirements are offered by many lenders
• Minimal documentation
• Quick disbursals

Fees & Charges

The fees and charges of personal loans usually vary from lender to lender and from case to case. The aforementioned table will give you a fair idea of the fees and charges related to personal loans:

Other fees and charges that lenders may levy on your personal loan include documentation charges, verification charges, duplicate statement charges, NOC certificate charges, swap and.

Types of Personal Loans

• Instant Personal Loans are approved instantly within a few minutes with none to minimal document requirements. Personal loans with instant disbursals are usually offered by banks and NBFCs to their select customers on the basis of their credit profiles.
• Short-term Personal Loans have short repayment periods ranging from a few days to 12 months.
• Pre-approved Personal Loans are usually offered by banks and NBFCs to their existing customers on the basis of their credit history, income, employer’s profile, etc.
• Consumer Durable Loans can be used to purchase any consumer durable items like smartphones, furniture, microwave, etc. The purchase amount gets divided into EMIs and can be repaid within the tenure decided. Some products may require a down payment or a processing fee while others may not.
• Personal Loan Balance Transfer facility allows borrowers to transfer their outstanding personal loan to a new lender for lower interest rates or better loan terms. However, transfer your outstanding personal loan only when the savings made through the transfer outweighs the cost of the loan transfer.
• Personal Loan Top Up is offered to existing personal loan borrowers who need additional funds to meet their financial requirements. However, this loan facility is only offered to select existing personal loan borrowers having satisfactory loan repayment history and/or have completed a specified number of EMIs.
• Personal Loan for Education is for individuals requiring funds for pursuing higher education in India and abroad, vocational courses, etc., and are unable to get a conventional education loan.
• Debt Consolidation Loan is for individuals struggling with multiple debt obligations as it allows them to consolidate their multiple debts into a single loan taken at a reduced interest rate and/or for longer tenures. The main purpose to apply for a Debt Consolidation Loan is to reduce the interest cost and EMI burden.

Personal Loan Eligibility Criteria

• Age: 18 – 60 years
• Salary: At least Rs 15,000 per month for salaried customers
• Income: At least Rs 5 lakh p.a. for self-employed customers
• Credit Score: Preferably 750 and above as having higher credit scores improve chances of loan approval
• Employment Stability: At least 2 years with a minimum 1 year of work experience in the same job for salaried
• Business Continuity: At least 2 years of business continuity for self-employed professionals
• Employment Type: Salaried employees working with reputed organisations, MNCs, Private and Public Limited Companies, Govt. organisations, PSUs, and large enterprises

Documentation for Personal Loan

• Identity Proof: Passport/PAN Card/ Voter’s ID/ Aadhaar Card/ Driving License
• Address Proof: Passport/ Aadhaar Card/ Lease/ Property Purchase Agreement/ Utility Bills (not more than 3 months old)/ Passport/ Driving License
• Income Proof For Salaried Individuals: Salary Slips/ Bank Account Statement/ Form 16
• Income Proof For Self-employed Professionals: Previous Years’ ITR/ P&L Statement and Balance Sheet/ Bank Account Statement
• Business Proof For Self-employed Individuals: Business Incorporation Certificate/ Professional Degree/ Certificate of Practice/ Partnership Deed/ GST Registration and Filing Documents/ MOA & AOA/ Shop Act License

How to Improve your Chances of Getting a Personal Loan?

How to Apply for a Personal Loan Online?

Paisabazaar.com allows customers to compare personal loan offers from 30+ banks and NBFCs and apply for the best suited offer online with ease. The steps for the same are as below:

• Enter your mobile number in the personal loan form.
• Enter personal details like desired loan amount, employment type, net monthly income, current residing city, bank where you receive your salary and company name.
• Provide OTP for verification and check for available pre-approved personal loan offers.
• For viewing more personal loan offers, provide more details like total EMI you pay currently, PAN, total work experience, tenure in current organisation, etc.
• Compare and apply for personal loan offer that best suits your requirements

FAQ

1. What is the minimum credit score required to get a personal loan?

Ans. It depends on the eligibility criteria set by the lender. Most lenders do not specify a minimum credit score for a personal loan. Some lenders might lend to applicants with low credit scores (less than 750) but the interest rate applicable is usually higher in such cases.

Read more: How to build/improve your credit score using Step UP Credit Card co-branded with SBM Bank India Ltd.

2. Can I cancel a personal loan after the loan amount is disbursed?

Ans. 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.

3. What is the minimum salary required to get a personal loan?

Ans. The minimum monthly salary required to avail personal loans 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.

4. Can I get a personal loan being a pensioner, if I have a pension account with one of the leading banks in India?

Ans. Yes, you can get a personal loan even as a pensioner, if you have a pension account with one of the leading banks. However, you should ensure that the bank where you receive pension funds offers personal loans to pensioners and you meet the eligibility criteria as specified by your prospective lender.

5. Can a student apply for a personal loan?

Ans. Generally, students are not eligible for a personal loan as a stable source of income and a good credit score are necessary prerequisites. However, if you have a stable monthly income and fulfil the lender’s other eligibility criteria, you may easily avail of a personal loan.

6. Can I get a personal loan if I have a home loan?

Ans. 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 personal loan.

7. Can I get a personal loan without a salary slip?

Ans. 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 fulfil 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.

8. Can I use a personal loan for marriage purposes?

Ans. Yes, you can avail personal loan to meet marriage-related expenditure as personal loans come with flexible end-use. Some lenders even provide personal loans specifically named as wedding/ marriage loans.

9. Can I take a personal loan from two different banks at the same time?

Ans. Yes, you may avail personal loans from two different lenders at the same time. However, it is not advised to do so as it will not only affect your credit score but also increase your EMI payout. It will be better to take one personal loan of a larger amount than two personal loans of smaller amounts. This way you can pay lower EMIs for a longer tenure and also improve your credit score. Moreover, you will save upon processing fees and other loan-related charges.

10. How do I cancel my personal loan after the loan is disbursed?

Ans. You cannot cancel your personal loan after the loan disbursement. However, you can prepay the loan amount. However, prepaying the personal loan may attract some prepayment or foreclosure charges, depending on the lender’s loan policies. Some lenders may also restrict personal loan prepayment or foreclosure till the repayment of a predetermined number of EMIs.

11. Are there any charges for prepaying my personal loan?

Ans. Prepayment charges of up to 5% plus applicable taxes are levied on fixed rate personal loans. In case of floating rate personal loans, as per RBI’s directives, no prepayment or foreclosure charges will be applicable.

12. Do I need to provide any security or collateral to apply for a personal loans?

Ans.  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 a secured personal loan when he is ineligible for availing unsecured personal loan or is charged very high interest rates for availing unsecured personal loan.

13. What are the tenure options for a personal loan?

Ans. The tenure of a regular personal loan usually ranges from 1 year to 5 years. However, some lenders like SBI, Tata Capital and Bajaj Finance offer personal loans for up to 7 years.

14. How to calculate EMI for a personal loan?

Ans. Banks and NBFCs generally use the reducing balance method to calculate personal loan EMI. And as for individuals, there are several personal loan EMI calculators available online on lenders’ websites and other websites. These EMI calculators also use the reducing balance method for calculating personal loan EMIs online.

15. What is the maximum loan amount I can get on my personal loan?

Ans. Lenders usually offer personal loans between Rs 10,000 and Rs 40 lakhs. However, the amount that they approve of is primarily dependent on your income and existing loan repayment obligations, if any. Some banks and NBFCs use the Multiplier Method, wherein the eligible loan amount is calculated on the basis of a predetermined multiple (ranging between 10 and 24 times) of an applicant’s net monthly income. Other lenders use the EMI/NMI Ratio, wherein the EMI of the proposed personal loan cannot exceed a pre-determined proportion of the applicant . Some lenders also use a combination of both of these methods to find the loan amount eligible of the applicant.

16. How do I obtain a duplicate repayment schedule for my personal loan account?

Ans. Usually, you can get a duplicate repayment schedule of your personal loan account by visiting the nearest branch/loan service center of your lender or logging on to your lender’s Internet Banking/Mobile Banking platform. To obtain a duplicate repayment schedule, you can also contact your lender’s customer care representative or loan officer to know the process as it may vary across lenders.