Personal Loans

A personal loan, as the name suggests, can be used for any personal expenses. It is usually an unsecured loan, comes with a lesser repayment tenure and a comparatively higher interest rate than other loans such as secured loans, vehicle loans, education loans and so on.

Though not strictly business loans, they can be used to meet business expenses by first-time entrepreneurs or start-ups as they would not meet the years-in-business and other criteria needed for business loans.

In the last 15 odd years, banks and financial institutions have realised the diverse uses of this loan, and have created specialised personal loans such as consumer loans, travel loans, vacation loans, marriage loans, and so on. Each of them have been modified somewhat to suit that specific need. For instance, with a travel or vacation loan you may get a credit card that gives you points every time you spend it on travel tickets, lodging, food, and other travel-related expenses.

Personal Loan – General Details

Maximum Personal Loan Amount

A personal loan can range from as low as Rs. 50,000 to Rs. 30 lakh or more

Interest Rate of Personal Loans

The average interest rates are usually around 11%-18% for an applicant with a good credit score though it is higher for people with low credit scores due to their riskier credit profile

Personal Loan Tenure

Personal loans are usually available for 1-5 years. However, you may get these loans for 7 years also from certain banks.

Age Criteria for Personal Loans

The borrower must be in the age group 21-60 years for most personal loans.

Minimum Income Requirement

The applicant should ideally have an income of Rs. 20,000 per month for salaried and around Rs. 25,000 for self-employed. In some cases, banks and FIs offer loans for people earning from Rs. 15,000 per month also.

Maximum Loan Allowable

This depends on the lending bank or financial institution but as a rule of thumb, you can get upto 1.5 times your yearly income provided the lending bank sees that you have enough balance in your savings bank account to pay the EMI.

Work Tenure Eligibility Criteria

The applicant should have been working for at least 6 months as a salaried employee or running a business for at least 2 years.

Documents Needed for Personal Loans

Copies of the following documents are usually needed for personal loan applications:

• Passport Size Colour Photo
• PAN Card
• Aadhaar Card
• Driving License or Voter ID Card
• Bank Statement for 3-6 Months
• Salary Slips for the Last 3 Months
• Company ID
• Form 16 or ITR for the Last 1-3 years

Paperless Personal Loans

Paperless personal loans or digital personal loans are now available from most of the banks and financial institutions in the country. These loan applications are done entirely online and you don’t have to go to a bank branch or hand over hard copies to a representative.

For instance, you can apply for personal loans from over 40 banks and financial institutions through one online form on our website. For the documents, all we need are soft copies.

Paperless Personal Loans – Additional Criteria for Loan Approval

Since these loans are applied for and approved completely online, certain other requirements have to be met

• How Salary Credited: You should receive your salary directly in your savings or salary account via online transfer and not by cheque or cash

• Net Banking Mandatory: You should have your Internet banking facility active for that account