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Factors affecting your Eligibility for a Personal Loan

For a hassle free loan process, ensure you are up to the mark on each of these parameters

Monthly Income

Your monthly income will be the critical factor determining your loan amount and the interest rate.


The age criteria may differ from lender to lender, but those aged between 21 and 58 years are more likely to get a loan.

Monthly Expenses

Your ability to pay back a loan is judged to some extent from your monthly expense, making it an important factor for evaluation.

Any Other Loan

When it comes to Loans, it’s not more the merrier. Your chances improve if you don’t have another loan to your name.

Credit History

A good credit history is like good health. Maintaining one does not hurt. And it only helps when you want a loan.

Job Stability

Your loan amount eligibility is likely to jump significantly, if you are employed at your current organisation for more than 2 years

Relationship with Lender

A good understanding with the bank goes a long way in negotiating better terms for a loan. Being a known and trusted customer helps.

Category of Your Employer

Working at a well-regarded company adds to your reputation and also your loan eligibility. A Fortune 500 Company on your visiting card helps!

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A personal loan is a non-collateral (unsecured) loan that provides funds to salaried as well as self-employed individuals. A borrower can take a personal loan for any unforeseen financial need. In today's time when everything is digitizing, getting a personal loan is quicker through online process. The main advantage of a this loan is that it offers higher loan amount, attractive interest rates and flexible repayment period without any security.

Why take a Personal Loan?

A personal loan is a great way to meet up the financial needs in a temporary financialcrisis. One of the main reasons why people opt for a personal loan is that it is a non- collateral loan and there are no conditions when it comes to usage of the fund.

  • Easy Loan Availability:There are many options available to take a personal loan and a borrower can choose any bank of their choice according to their requirement.
  • Minimal Documentation: There is no asset verification required for a personal loan, hence there is minimal documentation.
  • Quick Loan Approval:With an option to apply for a loan online and less documentation, a borrower can get quick loan approval.

Features and Benefits of Personal Loans

  • Unsecured Loan: A personal loan is given on the basis of the financial stability of the borrower. Unlike other loans, there is no security for a personal loan.
  • Freedom to Use Funds: A borrower has the freedom to use the loan money for any purpose be it a personal need or a professional one.
  • Flexible Loan Tenure: There is flexibility in tenure that makes it more convenient for a borrower to pay back the loan amount.
  • Higher Loan Amount: On the basis of the income profile, generally, a borrower can get a loan of Minimum of ₹ 10,000/- up to the Maximum of ₹ 15 lakhs to ₹ 20 lakhs.

How to apply for a Personal Loan

The process of applying for this type of loan can be understood in 3 simple steps:

  1. Check Eligibility: There are many online portals available to check personal loan eligibility. After knowing the options, a borrower can easily choose the best offer as per the suitability.
  2. Compare Best Personal Loan Rates: The next step is to compare the personal loan rates of all the available options and then take a decision.
  3. Apply Online: Once the borrower is sure, he/she can apply for it online.

Top Banks providing Personal Loans in India

In India, almost all private and public sector banks offer personal loan at attractive rates with the flexible loan amount and tenure period. Here are some of the top banks in India that provide personal loans:

HDFC Bank Personal Loan:

HDFC Bank has special rates and offers for HDFC bank account holder The bank offers instant loan approval at competitive interest rates ranging from 11.49% to 19.50% per annum depending upon the profile of the borrower and the loan repayment capacity. An individual having minimum monthly income of ₹ 12,000/- within the age of 21 years to 60 year

ICICI Personal Loan:

ICICI Bank personal loan is a multi-purpose loan with no collateral or security to salaried as well as self-employed individuals. A salaried person can take a loan up to ₹ 20 lakhs whereas a self-employed person can avail the maximum loan of ₹ 30 lakhs. Also, the interest rate on the loan starts from as low as 11.59% per annum with a flexible tenure facility up to 5 year

Bajaj Finserv Personal Loan:

Bajaj Finserv provides a personal loan to all the salaried applicants of India at attractive interest rates that start from as low as 13.99% p.a. The maximum loan tenure and maximum funding from the noted NBFC are 1-5 years and 25 lakhs, respectively.

Axis Bank Personal Loan:

When it comes to taking a personal loan, Axis Bank is one of the best options available in the financial market of India. Axis Bank loan offers the maximum loan up to ₹ 15 lakhs with interest rates starting from 15.50% per annum. The bank provides flexible loan tenure from 12 months to 60 months.

SBI Personal Loan:

State Bank of India offers a personal loan without any security The bank offers interest rates as low as 11.90% per annum up to a maximum of 14.90% p.a. The maximum loan amount that can be availed is ₹ 15 lakhs with the flexible tenure up to 5 year

Kotak Mahindra Bank Personal Loan:

Kotak Mahindra Bank personal loan is available for all Indian residents who are employees of a reputed company and are between the age of 21 years and 58 years On personal loan, the bank has attractive interest rates with minimal documentation and flexible repayment options. For a personal loan, the maximum loan amount is ₹ 15 lakhs with the interest rates ranging from 11.29% to 14.29% per annum.

Documents required for a personal loan

The documentation process for a personal loan is easy independent of the bank. Since a personal loan is a non-collateral loan (unsecured loan), the documents required are less as compared to other loans. The general list of documents that a borrower must have if he/she is applying for a loan are as follows:

For Salaried Individuals

  • Loan Application Form
  • 2 Passport size photos
  • Salary Slips for last 3 months
  • Identity Proof PAN Card or Driving License or Voter ID Card or Adhaar Card, etc.
  • Residence Proof (Driving License/Voter ID Card/Adhaar card, etc.)
  • Last 3 months Bank Statements
  • Employment Proof
  • Signature Proof

For Self-employed Individuals

  • Loan Application Form
  • 2 Passport size photos
  • Identity Proof PAN Card or Driving License or Voter ID Card or Adhaar Card, etc.
  • Office Residence Proof
  • Income Proof: Audited financials for the last 2 years
  • Last 6 months Bank Statements
  • Employment Proof
  • Signature Proof

Personal Loan Eligibility

Different banks different eligibility criteria when it comes to offering a personal loan. In general, the eligibility is:

Eligibility for Salaried Individuals

  • Minimum age of the applicant: 21 years
  • Maximum age of the applicant: 58 years
  • Minimum work experience: 1 Year
  • Minimum Net Monthly Income: ₹ 20,000

Eligibility for Self-employed Individuals

  • Minimum age of the applicant: 24 Years
  • Maximum age of the applicant: 65 Years
  • Minimum work experience: 3 Years
  • Minimum Net Annual Income: ₹ 1 lakh

Personal Loan Application Form

A borrower must fill in the below-given details in the loan application form:

  • Name of the applicant/s
  • Date of Birth
  • Residence Details
  • Purpose of Loan
  • Office Address for self-employed
  • Income Details

Personal Loan Interest Rates

The personal loan interest rates vary from bank to bank depending on the eligibility criteria. The interest rates on this loan for self-employed and for salaried is different in some of the banks. Here are the personal loan interest rates of the top 5 banks in India:

Lenders Interest Rate (p.a) Loan Amount (in ) Tenure (in years) EMI per lac(in ) Processing Fees Prepayment Charges
HDFC Bank 11.49%-19.50% For Salaried-Up to ₹ 25 lakhs. For Self-employed- Up to ₹ 15 lakhs 5 2,419-2,649 Up to 2.50% of the loan amount or Minimum of ₹ 1,000/- & Maximum of ₹ 25000/- for Salaried Customers Up to 4% of the principal outstanding + service tax
ICICI Bank 11.59%-22.00% For Salaried- Up to ₹ 20 lakhs For Self-employed- Up to ₹ 30 lakhs 5 2,199 Up to 2.25% of loan amount + service tax 5% of principal outstanding + service tax
Bajaj Finserv 13.99% onwards Upto 25 lakhs (only for salaried) 5 2,326 2.25% to 3% of the loan amount 4% on principal outstanding + applicable taxes
SBI 11.90%-14.90% Up to ₹ 15 lakhs 5 2,247-2,461 1% of the Loan Amount + applicable Service Tax 3% of the principal outstanding + service tax
Kotak Mahindra Bank 11.29%-14.29% Up to ₹ 15 lakhs 5 2,199-2,877 Up to 2% of the loan amount+ service tax 5% of principal outstanding + service tax
Axis Bank 15.50%-24.00% Up to ₹ 15 lakhs 5 2,419 1.50% to 2.00% + service tax as applicable NIL

Personal Loan EMI Calculator

Personal Loan EMI calculator is the tool that is used to calculate the monthly installments of the loan amount according to the tenure and rate of interest offered. Since the calculator is available online, a borrower can easily calculate the EMIs in advance. In general, the rate of interest offered on personal type of loan ranges from 11.50% to 24% per annum. For example, a borrower takes a loan of 15,00,000 for the tenure of 5 years and the interest rate that he/she gets is 12.50% per annum. Now the EMIs he/she will have to pay back to the bank can be seen in the below table:

Table for EMI per month, Total Interest Outgo and Total Amount

Amount (in ) Interest Rate (p.a) Loan Tenure (in Years) EMI (in ) Total Interest Outgo (in ) Total Amount (Principal + Interest) (in )
15,00,000 12.50% 1 13,362 10,349 1,60,349
15,00,000 12.50% 2 7,096 20,306 1,70,306
15,00,000 12.50% 3 5,018 30,650 1,80,650
15,00,000 12.50% 4 3,987 41,376 1,91,376
15,00,000 12.50% 5 3,375 52,481 2,02,481

Amortization Table

Year Principal (in ) Interest (in ) Balance Amount (in )
1 23,039 17,461 1,26,961
2 26,090 14,410 1,00,871
3 29,545 10,955 71,326
4 33,457 7,043 37,869
5 37,904 2,610 0

Can Mutual Funds be used for Personal Loan?

The borrowers who have invested in shares, mutual funds or similar instruments, can take a personal loan against them. The rate of interest offered on personal loan against Mutual Funds or alike instruments is lower as compared to the loan rates on an unsecured loan. In general, the loan against mutual funds interest rates ranges from 10.20% to 18% per annum.

Factors Affecting Personal Loan Eligibility

There are certain factors that are kept in mind while availing the personal loan to the borrower. Some of the common factors that affect personal loan eligibility are:

  • Monthly Income- The monthly income of the individual plays a very important role in the calculation of the loan sanction amount and the interest rate.
  • Age- Banks have set certain age criteria for offering a personal loan. However, the general age limit for an individual is between 21 Years to 58 Years
  • Monthly Expenses- On the basis of the monthly expenses, the loan repayment capacity of an individual is decided by the bank.
  • Any Other Loan- If the borrower is free from any kind of loan repayment, paying off the loan becomes easier.
  • Credit History- A good credit history of the loan applicant is an additional benefit when it comes to a loan.
  • Job Stability- If the loan applicant is stable in his/her job, the eligibility is likely to remain unchanged. The work experience of the borrower is mostly expected to be 2 Years
  • Category of the Employer- If the borrower is working in an MNC, he/she is most likely to get lower rates as compared to the other


Q. What is the minimum loan limit for Personal Loan?

A. Generally, the minimum loan amount that is offered for a personal loan is 10000/-.

Q. What is the maximum loan limit for Personal Loan?

A. In general, the maximum loan amount that a borrower can take is 50 lakhs.

Q. Is there any security required to take a personal loan?

A. No, there is no needed for a personal loan as this loan is an unsecured loan.

Q. Does CIBIL score matters when it comes to Personal Loan?

A. Yes, CIBIL score and credit history are important when it comes to PL. Banks often prefer the CIBIl score of 750+.

Q. What is the disbursal time for Personal Loan?

A. If all the documents are ready, a borrower can get a loan within 72 hours to 7 working days.