A personal loan is an unsecured loan and is an excellent way for individuals looking for a quick way to fund various expenses like home renovation, debt consolidation, wedding, vacation, medical bills, etc. Personal loans come with a flexible tenure for easy repayment and can be applied online through various banks and NBFCs from the comfort of your home or office.
Personal Loan- Eligibility Criteria
- You should be an Indian citizen
- You should be at least 21 years
- Your maximum age should be 65 years at the time of loan maturity
- You should either be a salaried professional or a self- employed individual
- Your minimum monthly income should meet the income criteria set by the bank
- You should have a good credit score
Personal Loan- Documents Required
For Salaried Professionals:
- ID Proof: Aadhaar Card, Voter ID Card, Driving License, PAN Card, Passport, etc.
- Address Proof: Ration Card, Utility Bills (Electricity Bill, Telephone Bill, etc), PAN Card, Aadhaar card, Voter ID Card, Passport, etc.
- Income Proof: Bank Account Statement and Salary Slip of Last 3 months
For Self- Employed Individuals:
- ID Proof: Aadhaar Card, Driving License, Passport, PAN Card, Voter ID Card, Passport, etc.
- Address Proof: Ration Card, Utility Bills (Electricity Bill, Phone Bill, etc.), Aadhaar Card, Voter ID Card, PAN Card, etc.
- Business Proof: Proof of Business Existence, Certificate of Incorporation, Certificate of Registration with Appropriate Registration Body
- Income Proof: ITR of Past 2 years, Certified Profit and Loss Statement
What Are the Benefits of a Personal Loan?
- Collateral- free loan: A personal loan is an unsecured loan and therefore you don’t need to pledge any collateral or security to avail this loan
- Flexible end use: Unlike a home loan or a car loan, personal loans do not offer funds for any specific purpose and come with a flexible end use. Therefore, you can use a personal loan to pay medical bills, get married, go on a vacation, renovate your home, etc.
- High loan amount: A personal loan can be availed up to Rs. 40 lakh and can be used to deal with various finances altogether
- Hassle- free loan processing: You can easily apply for a personal loan online without visiting the lender’s branch. The online application process of a personal loan ensures hassle- free and quick processing
- Minimum documentation: The paperwork and documentation required to process the personal loan application is minimum and saves a lot of time. The documents can either be uploaded online or the lender may schedule documentation pickup from your home or office
- Flexible tenure: The tenure of a personal loan ranges from 1 to 5 years and all the lenders provide you the flexibility to choose the tenure as per your repayment ability and convenience
- Quick disbursal: A personal loan is an ideal option if you need funds in case of an emergency as it ensures quick disbursal of money once you finish with the loan application
Questions to Ask Yourself Before Taking a Personal Loan
What is my credit score?
Credit score is one of the most important factors checked by the lenders before sanctioning you a personal loan as it a 3 digit numeric reflection of your past repayments. Therefore, if you have been regular with paying your loan EMIs and credit card bills on time, you will have a good credit score. In case you don’t have a healthy credit score, improve it and then apply for a personal loan to avoid rejection of loan application.
Can I afford the personal loan I am taking?
Don’t take a personal loan because it is easily available or you have a pre- approved offer. Consider all the factors like the EMIs you would be paying, the EMIs you are already paying (if any) and your other monthly expenses. Even if you need a personal loan, select an amount as per your repayment ability so that you don’t overburden yourself with a lot of expenses and default on your loan repayment.
What would be my interest rate?
The interest rate of a personal loan starts from 10.50% and varies from individual to individual. The interest rate that you will get from the lender depends on your credit score, age, employer, repayment history, etc.
Can I prepay my personal loan?
You must ask your lender if you can prepay the personal loan. You should also know about the prepayment charges (if applicable by the lender). Although, most of the banks allow prepayment of a personal loan but some might have a lock-in period of 6 or 12 months.
What would be the other fees and charges if I take a personal loan?
Apart from the loan amount and interest rate, there are other fees and charges included when you take a personal loan. They are processing fee, late payment penalty, foreclosure charges, EMI bounce charge, loan cancellation charge, repayment mode swapping charges, etc. Therefore, it is important to understand the total cost of a personal loan before you apply for it.
Where can I use the Personal Loan EMI Calculator?
To analyze the EMIs you would be paying throughout the tenure and to evaluate your repayment ability, you can use Paisabazaar’s Personal Loan EMI Calculator before you apply for the loan. This way, you will have an idea about your future EMIs and will borrow funds as per your repayment ability.
How can I get a personal loan with the lowest interest rate?
You can easily compare various personal loan offers from different banks at Paisabazaar and then choose the one offering the lowest interest rate as per your eligibility.