Personal Loan

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Personal loan is a short to medium term unsecured loan granted to an individual. It is commonly used to meet such financial needs as wedding expenses, unexpected medical costs, home renovation and others. Flexibility of usage, minimal documentation and quick processing make personal loan a preferred financing option. Unlike other loans, it usually has a shorter repayment tenure ranging from 1-5 years. Depending upon the individual applicant's profile and lender, the APR (Annual Percentage Rate) of a personal loan may vary from 10.25% to 35%.

Features and benefits of Personal Loan

  • Collateral-free loan
  • No end-use restriction
  • Interest rate starting from 10.25% 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 to case basis
  • Minimal documentation
  • Quick disbursals

Eligibility Criteria for Personal Loan

The personal loan eligibility criteria mentioned is generic in nature and actual eligibility factors may differ from one lender to another.

For Salaried:

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

For Self-Employed:

  • Age: 18 - 60 years
  • Credit Score: Preferably 750 and above as having higher credit scores improve chances of loan approval
  • Business Continuity: At least 2 years of business continuity for self-employed professionals

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What are the documents required for Personal loan?

For Salaried:

  • 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

For Self-Employed:

  • 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 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

Frequently Asked Questions

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 score (less than 750) but the interest rate applicable is usually higher in such cases.

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 your repayment capacity, which in turn depends on your monthly income and credit score.

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 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.

Ans. Yes, you may avail personal loan 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.