Personal Loans

What is A Personal Loan?

Personal Loan is an unsecured loan disbursed to individuals based on various parameters like income, repayment capacity, employment history, past credit track record and credit score. Banks and NBFCs (Non-Banking Finance Company) both disburse these loans. The end use of funds taken through Personal Loan could be a variety of reasons based on the personal need of the individual - Medical Emergencies, Vacation planning, marriage, meet temporary cashflow mismatch etc.

Why choose a Personal Loan?

A temporary cashflow mismatch is a very common problem especially in the early stages of the career when the savings are not enough to meet any sudden expenditure. Personal Loans are designed by the banks specifically to meet these temporary cash crunch phases. Personal Loans are quickly processed and disbursal times are amongst the shortest. Personal Loans are unsecured loans- meaning they are given with any security or collateral.

  • Quick Disbursal: Emergencies/cash crunches come unannounced. The prime need at that point is the speed at which finances can be arranged and other matters take a back seat. Hence Personal Loans are designed as easier to process and fast to disburse.
  • Less Paperwork: Personal Loans doesn't requires any collateral or a guarantor(in most cases). It also doesn't requires any field verification of assessment of the borrower's asset. Thus the paperwork required for Personal Loans is minimal.
  • Simple Terms: Personal Loans comes with simple-to-understand terms.

Features and Benefits of Personal Loans

  • No Fund's end-use restrictions: Personal Loans are true to their nomenclature. Though the other loans are disbursed with a clear mandate as to where the loan amount can be used, Personal loans have no such restrictions. The loan amount can be used as per the discretion of the borrower. Ther can be used to meet the personal needs of the borrower- marriage expenses, vacations, medical emergencies etc.
  • Requires no Collateral: Personal loans are given based on the profile of the borrower, earning capacity, other debts, prior credit history and employment details. It doesn't require any kind of security or asset cover or any other kind of collateral.
  • Flexible Tenure: Personal loans are usually given for a period of 12 months to 60 months depending on the various parameters. So depending on the repayment schedule and repayment capacity of the borrower, there is an option to choose the desired tenure.

Personal Loan Eligibility:

Each Lender has different criteria for lending Personal loans, though most of them broadly fall under the limits mentioned below:

Personal Loan Eligibility Details

Particulars Salaried Self-Employed
Age(Min-Max) 23 years to 58 years 28 years to 65 years (25 years for doctors)
Income Rs.17,000 (Rs.25,000 for metro cities)
  • Minimum turnover of Rs.40 lakhs for non-professionals
  • Minimum turnover of Rs.15 lakhs for professionals
CIBIL Score Above 750 Above 750
Minimum Loan Amount Rs.75,000 Rs.75,000
Maximum Loan Amount Rs.20,00,000 Rs.50,00,000

Documentation needed to apply for a personal loan:

For Salaried:

  • Proof of Identity: Passport, Driving License, Voters ID or PAN Card
  • Proof of Residence:-Passport or utility bills
  • Latest 3 months Bank Statement of Salary Account
  • Salary slips for last 3 months.

For Self-Employed:

  • Proof of Identity: Passport, Driving License, Voters ID or PAN Card
  • Proof of Residence:-Passport or utility bills
  • Income proof: Audited financials for the last two years.
  • Last 6 months Bank statement.
  • Office address proof.