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PERSONAL LOAN

Personal loan is a loan a person gets from lenders called Banks & NBFC (Non Banking Financial Corporation) and payback with interest over multiple years. It fulfils your current financial needs. Most personal loans are unsecured that are not booked by any collateral. You can use the money borrower for any purpose. Lenders provide loans on the basis of their credit appraisal policies like income criteria, credit score of borrower, previous repayment experience with existing customers. 

Personal loans become a very common need for everyone. It has become a basic need for every family. As personal loans are coming with flexible ends and these loans can be used for any personal expenses also. Compared to other loans the application procedure of the personal loans is very easy. An unsecured loan which is very helpful for anyone to meet their current financial needs is a personal Loan. The security levels and the lengthy procedures for taking a loan are not there for personal loan.

These are available with very short procedures. The complete details are given here. You can follow the article to know the complete details. Your loan lender will provide you all the flexibilities to use with the fund provided by the bank as per your needs. Personal loan is used for following purposes i.e.:

  • Marriage Expenses

  • Holiday Expenses

  • Home Renovation Expenses

  • Medical Expenses

  • Education Expenses

Personal Loan Benefits 

1. You can get loan at attractive interest rate

2. It is a simple process with very little documentation.

3. You can apply in minutes and get the money in less than 72 hours.

4. You can avail additional tax benefits on your personal loan.

5. Repay at your convenience using the flexible repayment options.

Personal Loan Types

There are two types of personal loan that is :

Secured Loan : Secure loans are those loans which are secured by an asset. Eg. Home loan, Gold Loan, Property loan 

The benefits of Secured loan is :

  • Lower Interest Rate

  • Secured Business Loan

  • High Loan Amount

Unsecured Loan : Unsecured loans don’t have assets for collateral. These loans may be more difficult to get and have higher interest rates.

The benefits of unsecured loans :

  • No collateral

  • Higher Interest rate

  • Smaller Amount

  • The creditworthiness of the borrower is important

Personal Loan Fees and Charges

To apply for a personal loan you have to pay fees and charges applied by the Bank. The following charges are taken from personal loan i.e processing fee, prepayment / foreclosure charges etc.

TYPE 

CHARGES

Processing fees 

0% to 3% of the loan amount

Interest Rate 

8.80% p.a.

EMI bounce charges 

Rs.1000

Penal Interest 

2% per month 

Penalty for prepayment or foreclosure of loan  

2% to 4% 

Duplicate Statement

Rs.200 and Rs.500  per instance

Personal Loan Eligibility Criteria 

The age limit required to apply for the personal loan should be minimum 21 years of age at the time of applying the loan and the maximum age is 68 years at the time of maturity of loan. The applicant should get a minimum Rs. 5000/- salary monthly for personal loan. 

Eligible

Salaried person, self employed professionals, retired person, business owners, student, homemaker

Age

21 years to 68 years

Minimum Income 

Rs.5000 p.m.

Work Experience

1 to 3 years

What are the Docusments required for Personal Loan?

Any applicant who is going to avail for a personal loan must have to submit the following documents. These documents are the requirements for the lenders who are providing you the amount of loan.

1. Passport

2. Aadhaar Card

3. PAN Card

4. Voter’s ID Card

5. Driving License

6. Photograph

7. For Salaried Employee : Last 6 months Bank Statement, Last 3 months Salary Slip and 2 years Form 16.

8. For Self Employed : Last 1 year bank statement, 3 years ITR, Business profile (service tax, company profile)

Personal Loans for All Your Special Needs

Personal loans are a suitable option for you to fulfil your diverse financial needs. Utilize a personal loan to meet various funding needs such as –

  • Medical emergency - Avail personal loans online with minimal documentation to address medical emergencies, which requires immediate funding.

  • Debt consolidation - Consolidate multiple debts into one with an instant, high-value personal loan.

  • Higher education - Provide complete financial support to your child during higher education with high-value personal loans. Meet all financing needs such as course fees, travel expenses, hostel charges and more with customised personal loans in India.

  • Home renovation - Manage the necessary home renovation and repair expenses with an instant loan and repay over a flexible tenor of your choice.

  • Used cars - Apply for a personal loan online to finance the purchase of a used car. Avail a loan at competitive interest rate and repay in easy EMIs.

  • Wedding - Meet the high-end expenses of a grand wedding or plan post-marriage trips with the help of a personal loan.

  • Travel - Fulfil your travel goals with funds availed against simple eligibility criteria. Cover all the expenses, including flight tickets and hotel bookings during your trip to a national or international destination.

How to apply for Instant personal loan Online?

The application process for a personal loan is simple and convenient. Proceed with the following steps to apply for Personal loans 

1. Check your credit score :

You must need to apply for only those places that you fulfil the credit score eligibility.

2. Choose the offer that’s suits you best :

Compare the offers available from various lenders and go through the terms and then select the best offer.

3. Check eligibility and amount :

On the basis of your credit score check the upper limit that you can apply for loan.

4. Fill the application form :

Fill the required information in the application form correctly.

5. Documentation :

Banks need proof of everything so you must show the proof of all required documents like residence proof, age proof and income proof.

6. Approval & Disbursal :

Once you fulfil the application form correctly and banks are satisfied with everything your loan will be approved. Now you have to check the terms and conditions and sign the agreement.

What are the payment modes available in personal loan?

There are a number of repayment modes which are offered by lenders. Although these modes might differ from lender to lender, the most common modes of repayment can be summed up as follows:

1. Electronic Clearance System or ECS: The ECS or Electronic Clearance System is one of the most commonly used repayment methods. It is an electronic mode through which funds are transferred from one bank to another.

2. Post Dated Cheques or PDCs: Post Dated Cheques, as the name suggests, are cheques which are issued by you for a future date. The lender will use these cheques on the mentioned date to deposit or encash the amount mentioned on it.

3. National Automated Clearing House: The National Payment Corporation of India (NPCI) offers a program called NACH to all the banks and financial institutions. The NACH allows the processing of transactions in real time. This method can be used for your loan repayments.

4. Debit mandate or standing instruction: You can give an instruction to your bank to pay off a particular amount of money to another bank or bank account at a regular interval. This is known as standing instruction or debit mandate. Your bank will be paying off the stipulated amount towards the repayment of your loan on a regular basis through this system.

Compare Personal Loan Interest Rate Offering by the Banks in India

BANKS

INTEREST RATE

AXIS Bank Personal Loan

12% to 24%

SBI Personal Loan

11.30% to 16.40%

SBI Xpress Bandhan

12.15% to 15.15%

SBI Xpress Credit Personal Loan

11.50% to 12%

HDFC Bank Personal loan

10.75% to 21.50%

Kotak Mahindra Bank Personal Loan

10.50% to 16.99%

Yes Bank Personal Loan

20.00% to 22.00%

Citi Bank Personal Loan

10.50% to 17.99%

ICICI Bank Personal Loan

10.99% to 16.25%

Standard Chartered Bank Personal Loan

11.00% to 19.20%

IDBI Bank Personal Loan

12.00% to 14.00%

RBL Bank Personal Loan

14.00% to 23.00%

HSBC Bank Personal Loan

10.50% to 17.84%

IndusInd Bank Personal Loan

11.00% to 16.75%

Bank of Baroda Personal Loan

7.65% to 12.65%

Bank of India Personal Loan

12.15% to 14.15% 

Canara Bank Personal Loan

12.05% onwards

How to calculator EMI of Personal Loan 

The one who wants to know the procedure of calculating the EMI on their personal loans can follow the details given below.

EMI is the Equated Monthly Instalment. This EMI is calculated using the following formula as

EMI = [P x R x (1+R)^N]/[(1+R)^N-1]

Where,

P stands for your loan amount  

R stands for the interest rate per month 

N stands for the number of monthly installments.

Bank offered Financial Products 

BUSINESS LOAN

CAR LOAN

COMMERCIAL LOAN 

EDUCATION LOAN

GOLD LOAN

HOLIDAY LOAN 

HOME LOAN 

LOAN AGAINST PROPERTIES 

LOAN AGAINST SECURITIES

PERSONAL LOAN

PROFESSIONAL LOAN

TWO WHEELER LOAN

FAQ's On Personal Loan

1. How much interest rate is charged by Personal Loan?

The interest rate charged by Personal Loan is 8.80% p.a.

2. What happens if a personal loan is not paid?

If the borrower fails to pay the EMI, the bank charges a penal interest on the overdue amount. Financial lenders usually charge a penal interest of 2%-3% per month of the overdue amount.

3. Which formula is used to calculate EMI of Personal Loan?

The formula which is used to calculate EMI of Personal Loan is :

EMI = [P x R x (1+R)^N]/[(1+R)^N-1], where P stands for your loan amount, R stands for the interest rate per month, N stands for the number of monthly installments.

4. What is a personal loan?

A personal loan is a type of unsecured loan that you can borrow from a bank or financial institution if you require funds to pay for your financial needs.

5. How does a personal loan work?

You borrow a loan when you are in need of credit. Once you submit your loan application to a lender for a personal loan, the lender verifies and approves it. Post this, the loan amount is disbursed into your bank account. Once you receive the loan amount, you will need to repay the lender via EMIs over the course of the loan repayment tenure.

6. How much work experience is required to get a Personal loan?

From 1 years to 3 years work experience is required to get a Personal Loan.

7. How can I repay my personal loan?

There are a number of ways by which you can repay your loan. These include:

  • Via Electronic Fund Transfer (EFT)

  • By cheque

  • By physically paying at a branch of the lender

  • Via standing instruction for automatic deduction from your account

8. How much processing fee is required to get a Personal Loan?

The processing fee is from 0% to 3% of the loan amount required to get a Personal Loan.

9. How much penalty charged for prepayment or foreclosure of loan when applying for a Personal Loan?

From 2% to 4% penalty charged for prepayment or foreclosure of loan when applying for a Personal Loan.

10. What is a pre-approved personal loan?

A pre-approved loan is one where the customer can apply for a loan and possibly doesn’t need to submit documents or go through the verification process as he/she shares a healthy relationship with the bank as an existing customer and has a clean repayment record.

Last Updated on : 09/Nov/2020

Know More About

Personal Loans

You're eligible for a Personal Loans if you:


Are legally adult enough to handle it


Have still got it


Get a regular pay check


Make more than a basic buck

Your eligibility depends on:


Earn more than minimum income required


Maximum allowed Personal Loans is Rs. 10K to Rs. 45 lakhs


EMIs of other loans loweryour eligibility

Boost your eligibility by:


Pay off your credit card bills


Choose longer tenure loan up to 5 years

Nothing gets done without that paperwork (which we'll happily carry over to the bank for you, no sweat). Here's what you'll need:

  • 1. Photo ID and age proof
  • 2. Signed application form with photograph
  • 3. Residence proof
  • 4. Last 6 months bank statement
  • 5. Documentation for salaried applicants:
    • Last 3 months salary - slips
    • Form 16 or Income Tax Returns
  • 6. Documentation for self-employed applicants:
    • Last 3 years Income Tax Returns with computation of Income
    • Last 3 years CA Certified / Audited Balance Sheet and Profit & Loss Account

Personal Loans Interest Rates

Updated on 25 Nov 2017

Personal Loans Details
Interest Rate (Monthly reducing balance) 12% - 24%
Processing Fees Varies with bank
Loan Tenure 1 year to 5 years
Pre-closure Charges Varies with bank
Guarantor Requirement Varies with bank

Personal Loans EMI Calculator

Loan Amount

|
1L
|
50L
|
100L
|
150L
|
2Cr

Interest Rate

%
|
5
|
10
|
12.5
|
17.5

Loan Tenure

|
1
|
10
|
20
|
25
|
0
|
120
|
240
|
300


Your Monthly Loan EMI


₹24,959