Personal Loan

In the latest monetary policy meet held on March 24-27 2020, the RBI has decided to give a 3-month moratorium period for all outstanding loans as on March 1, 2020. Remember, this is not an EMI WAIVER. The move is in line with the economic pressures induced by the Coronavirus outbreak. So, this could mean some savings for you on your loan and help you deal with the likely situation of less or no income. Your credit score will not reduce if you don't pay the EMI. But doing so can raise your interest liability as banks would like to cover their losses, which is likely to be the case on deferred EMI payments, by increasing the interest component of the EMI after the moratorium period gets over. So, if you have the money, keep paying to reduce your interest liability. The moratorium, which was ending on May 31, 2020, has been extended till August 31, 2020.

A personal loan is an unsecured loan that comes to you without having to submit any collateral for the same. It can be given for numerous purposes such as marriage, education, medical emergency, travel, home renovation, etc. Both salaried and self-employed can apply for a personal loan. The loan comes with attractive interest rates and flexible repayment options. You can either apply online or at the branch of the bank or non-banking finance company (NBFC). You will also need to pay the processing fee at applicable rates. The lender will assess the loan eligibility based on your income, credit score and repayment potential. After receiving the application, the lender will pull your credit report from CIBIL or any of the credit bureaus it is associated with. Once you meet the eligibility criteria, the lender will disburse the loan amount in your bank account. Let’s talk more about a personal loan on this page.

Highlights of Personal Loans

Personal loans come with the following features and benefits that make one opt for the same. Let’s take a look at them.

Instant Loan Approval & Disbursal - The loan can be approved instantly provided you have the required income, desired credit score and repayment capacity as sought by lenders. Once the instant personal loan approval happens, the next course of action is sanction. The lender, after assessing your income and credit profile, sanctions a loan amount and communicates the same via an email or SMS. After sanction, the process of disbursal begins and you get the loan amount credited to your account within a few hours from the sanction.

Greater Loan Amounts - Times have changed and so have the personal loan offerings of banks and non-banking finance companies (NBFCs). There was a time when the maximum personal loan used to be around INR 15 lakh-25 lakh. That cap is now raised INR 40 lakh and even more. HDFC Bank, for example, has no maximum limit on a personal loan. If your income, credit score and repayment capacity are good and high, there’s no limit to the loan amount offered.

Flexible Repayment Tenures - The best part about a personal loan is that you are given time to repay the dues. You will get a loan tenure ranging from 1 to 5 years.

Attractive Interest Rates - Personal loans are available at attractive interest rates starting from 9.85% per annum. As the cost of funds for banks has come down rapidly, the rate of personal loan interest rates has also come down like secured loans.

No Collateral/Security Required - You won’t need to submit any collateral or security to get a personal loan, which is unsecured in nature. As a result, the loan sanction and disbursal depend firmly on your income and credit score.

Use the Personal Loan the Way You Want - The loan amount disbursed can be used by the borrower in the way he/she wants. You can get the loan for numerous purposes such as marriage, travel, home renovation, etc.

Prepayment Allowed in a Loan - You can prepay the loan anytime after the successful payment of the first 12 EMIs. The prepayment means the payment of the outstanding loan balance before the completion of the original loan tenure. Now it depends on the lender whether it allows you to prepay in full or parts.

Fees & Charges

A personal loan comes with a list of charges that you can see below.

Interest Rate - The first charge that most of us contemplate is the interest rate at which the loan will be available. The effect of the interest rate will be seen in the monthly installment as well as the overall interest outgo.

Processing Fee - It’s a one-time fee that banks and other financial institutions levy to process the loan amount. The fee can either be a flat amount or account for a certain percentage of the loan amount. The personal loan disbursal amount is different from the applied amount because the processing fee payable is deducted from the latter. But the interest rate will be charged on the applied amount.

Late Payment Charges - If you pay the EMI after the due date, the lender will deduct late payment charges at around 2% of the amount due.

Foreclosure Charges - If you close the loan before the original tenure, it will be called foreclosure and charges will apply on the same.

How to Grab the Best Personal Loan Deal?

The best personal loan should have the following features -

Attractive Interest Rates - The rate of interest determines greatly the cost of your borrowing. Although personal loan rates are greater in comparison to other loans, you can still compare the rates of different lenders and find the least one. Lenders set interest rates based on your income, organization, credit score, etc.

Low Processing Fee - Search for the lender that charges you less processing fees on a personal loan. A lower fee ensures the disbursal amount is not much lower than the applied amount.

Flexible Repayment Tenures - Personal loans come with repayment tenures ranging from 12 to 60 months. The lender where you apply must give you enough time to repay the loan.

Quick Disbursal - If you apply at a lender that has a slow sanction and disbursal process, you may not like that experience particularly when it is about fulfilling instant needs. And, if we talk about the market in general, most personal loan applications are made for instant requirements. In that case, it becomes necessary for you to choose the lender that can disburse you a loan quickly.

Top Banks Offering Personal Loan at Lowest Interest Rates Jul 2020

Want to know the personal loan interest rates of top banks in India? If yes, all you need to do is just glance at the table below to know every single detail.

**The above EMI calculations are based on a tenure of 5 Years.**

Types of Personal Loans

Personal loans are often branded as the following loans.

Wedding Loan - You can get this loan to meet all your wedding expenses, which can be anything from guest accommodation to buying jewellery for the grand event. You can find special offers from lenders on this loan type.

Travel Loan - Travelling remains on top of everyone’s mind. But we often find short of savings to ensure the same. This is where a travel loan can help you! It provides you with the required funds for meeting your expedition desires.

Consumer Durable Loan - It varies from other personal loan types. This loan is financed upto 80%-90% of the purchase price of the consumer durable. So, it’s not financed fully, unlike other loan types where a 100% finance is possible provided you have the required income, credit score and repayment potential.

Home Renovation/Improvement Loan - You can get this loan to renovate or extend your existing housing unit.

Medical Emergency Loan - Medical emergency can be very hard to deal with if you don’t have savings to spend on the same. To ensure you recover from this, banks and NBFCs offer you a medical emergency loan. If all goes well, the loan can be approved and disbursed faster than what may be the case with other personal loan types.

Festive Loan - Festivals are celebrated with elan in India. Keeping that in mind, lenders come with exciting festive loan offers for borrowers wanting cash to meet their festive needs.

Types of Personal Loan Interest Rates

Personal loans are offered at flat and reducing balance interest rates. With the flat rate in place, the interest will be charged on the principal loan amount all the time. Irrespective of the repayment you have made so far, the interest will keep getting charged the principal loan amount. That’s why the interest amount on such a loan remains on the higher side. With a reducing balance, the process of levying interest is different. There are two types of reducing balance - annual and monthly reducing balance rates. With the annual reducing balance, the rate of interest will be charged on the outstanding balance at the end of every year. Whereas, with a monthly reducing balance method, the interest will be charged on the outstanding balance after every EMI payment. This decreases the interest obligations for borrowers choosing this system.

How to Calculate the Personal Loan EMI?

It’s important to know the Equated Monthly Installment (EMI) in advance so that you can adjust your budget accordingly and arrange the required amount for timely payment. You can calculate the EMI using the Personal Loan EMI Calculator. All you need to do is enter the loan amount, rate of interest and tenure in the calculator. The EMI is a portion of both principal and interest payable towards a loan every month.

For example, you get a 5-year personal loan of INR 7 lakh at an interest rate of 12% per annum. As per these details, you will most likely pay an EMI of INR 15,571. Over 5 years, the interest obligations will amount to INR 2,34,267. The total amount payable will be INR 9,34,267.

Personal Loan Eligibility Criteria

As the loan comes to you without collateral, lenders like to be absolutely convinced of your ability to pay off the EMI. So, the lender can place conditions regarding age, earning amount, the period of employment, residence stability, credit score, the type of organization, etc. Instant personal loans can be granted if you tick all the boxes. Let’s check out each of these aspects below.

Age - The age of the applicant is an important criterion for personal loan approval. There’s a difference when you apply for a personal loan in your 30s compared to the time when you go past 50. The difference is the job prospects are greater when you are younger. The greater job prospects make lenders more confident of your repayment capacity. Lenders can allow you to apply for a personal loan when you attain a minimum age of 21 years (salaried) and 24 years (self-employed). However, the maximum age of the applicant must not be more than 58 years if you are salaried and 65 years if you are self-employed.

Earning Amount - Different lenders can have different minimum income requirements for borrowers to meet. Not only the amount varies, but also the definition of income. Yes, there are some banks assessing eligibility based on the gross monthly income of an individual. Whereas, some banks assess eligibility based on the net monthly income. Salaried can get their personal loan sanctioned on earning a minimum net monthly income of INR 15,000-20,000. One more thing, lenders don’t consider your variable income such as incentives while assessing personal loan eligibility. In the case of self-employed, loan eligibility is based on the profit that comes after the incidence of tax.

Period of Employment - Personal loans are offered to borrowers having worked in the organization for at least 1 year. Apart from that, lenders would also want your overall work experience to be of around 2-3 years so that the loan can be sanctioned.

Residence Stability - You must have stayed in your current residence for at least 1-2 years.

Credit Score - A credit score represents the creditworthiness of borrowers. The high creditworthiness enhances the possibility of a timely repayment track. For instant personal loan approval, it is important the credit score must be 750 and above. However, if the score is between 700 and 750, the loan can still be approved albeit at a slightly higher rate of interest. So, if you are having a credit history of 1 year and above, you must have a credit score. Whatever debt obligations you might have, be it a credit card, home loan or even a personal loan, make sure to pay dues on time. This will help build a strong credit history and a good score.

Type of Organization - The personal loan approval is also contingent on the type of organization you are working with. You can get the approval quickly if you are working in a top organization compared to someone working with a very less known company.

Type of Business - Self-employed applicants will need to be in the business that runs across seasons. This will ensure a greater degree of confidence amongst lenders about your repayment capacity. Some businesses are seasonal and can thus impact repayment negatively. Lenders remain wary of disbursing loans to such applicants.

Note - The eligibility criteria explained above can vary from one lender to another.

What Will Dictate the Personal Loan Disbursal Amount?

Above you saw the general eligibility criteria for personal loan approval. If you meet those criteria, you clear the preliminary test i.e. you can apply for the loan. But what will dictate the actual disbursal amount? It will depend on your income to a greater extent. But what will matter more is the repayment capacity you will have. Individuals with a greater earning do have more scope for repayment compared to someone with a lesser earning. What lenders also do is to check the ratio of the proposed EMI to the net monthly income. That tells them greatly about the repayment potential of borrowers. Most likely, lenders will sanction the personal loan amount that will keep the total monthly obligation to be within 50% of your net monthly income. Here, the obligation refers to all sorts of debt including the personal loan you are to service. In case you are already servicing a loan or two, the eligibility can reduce compared to someone with no debt obligations presently.

Documentation Process

Documentation is an important aspect of a personal loan as negligence on the same can lead to rejection of the loan application. So while applying for a personal loan, don’t forget to submit the documents required by the lender.

Documents for Salaried

• Identity Proof - PAN Card/Voter ID/Aadhaar Card/Passport/Driving License
• Residence Proof - Voter ID/Aadhaar Card/Passport/Driving License/Electricity Bill/Telephone Bill
• Income Proof - Salary slips for the last 3 months, bank statement for the last 3 months
• Recent passport size photographs

Documents for Self-employed

• Identity Proof - PAN Card/Voter ID/Aadhaar Card/Passport/Driving License
• Residence Proof - Voter ID/Aadhaar Card/Passport/Driving License/Electricity Bill/Telephone Bill
• Office Address Proof - Electricity Bill/Landline Bill/GST or VAT Registration
• Income Proof - Salary slips for the last 3 months, bank statement for the last 3 months
• Recent passport size photographs

How to Apply for a Personal Loan at Wishfin?

Applying for a personal loan online has become easier at Wishfin, a neutral financial marketplace that offers unbiased advice on loans and other financial products. And where most digital platforms have the conventional loan application, Wishfin has WhatsApp mode of application besides the usual loan application. Let’s read about both these application modes.

Online Personal Loan Application Form

Check out the steps you need to follow while filling the online personal loan application form at Wishfin.

• Visit the official website of Wishfin
• Go to ‘Personal Loan’
• Fill the details against ‘Desired Loan Amount’, ‘Employment Status’, ‘Monthly Income’ and ‘City’
• Click on ‘Get Quotes’
• Based on your details, different loan quotes will appear on the screen
• Choose the one that you think is best for you
• Wishfin representatives will contact you and take your personal loan application to the concerned lender

How to Apply via WhatsApp?

Wishfin endeavours to give you a unique experience of an online personal loan application. In its endeavour, it has tapped into the potential of WhatsApp that we use to chat with friends and colleagues. With WhatsApp application, you can do away with a lengthy online application form. All you need is to give a missed call on 8130633535 and start applying personal loan via WhatsApp.

Personal Loan Sanction & Disbursal

After applying via an application form or WhatsApp, the lender executive will come to your office or residence, wherever you want him or her to come, to pick up the documents. The lender will go through the documents and approve the loan if the details are found genuine. Post approval, the lender will send a sanction letter showing the loan details and terms & conditions. And soon, the loan will get disbursed to your bank account.

Why Should I Apply for a Personal Loan at Wishfin?

The question is answered partly above. You can read further to know all such reasons that call for an online personal loan application at Wishfin.

Trustworthy Platform - The growing number of satisfied wishers tells the success of Wishfin. As of now, the count of total satisfied wishers is more than 3 crore. As much as $3 billion worth of loan is disbursed till now.

Tie-ups with Banks/Financial Institutions - In its journey so far, Wishfin has made tie-ups with as much as 43 banks and financial institutions.

Easy Platform to do 3 Cs (Check, Compare and Choose) - When you get a platform that shows the loan details of different banks and financial institutions, it becomes easier to compare the offers and choose from the best personal loans online.

Unbiased Expert Advice - Wishfin takes pride in offering unbiased advice to customers with regards to personal loans and other products. Our wish experts use their market knowledge to advise you which lender will be the best for your cause.

Multiple Application Process - As told above, there is more than one way by which you can apply for personal loans online at Wishfin.

How to Check Your Personal Loan Status?

After applying for the personal loan, you could be thinking about the latest status of it. Wishfin is here to help you! The dedicated executives will keep updating you of your loan status. Once the loan is accepted by the lender, the executives will intimate you of the same. You can also receive the intimation on your email ID. The status can also be checked on the official website of the lender. Here, you need to type the application reference number, which you must have got via an SMS while applying for personal loans online, and other details before you could check the status.

Personal Loan Customer Care Number

You can dial the customer care number of the lender to know the personal loan status along with several other details. The customer care number of different lenders is shown below, take a look.

Tips for a Successful Personal Loan Application

A successful personal loan application rests on the due diligence you do. The successful application not only ensures a smooth loan disbursal but also helps prevent any fall in the credit score which can be the case otherwise. So, what are the tips that can help ensure a successful loan application? Check them out below.

Apply After Understanding Eligibility - Given its wide-ranging utilities, a personal loan can be looked upon anytime. But the application will go through successfully only if you meet the eligibility criteria set by a particular lender. So, there lies your duty to understand the eligibility of a lender before you apply for personal loans online.

Do Check Your Credit Score Before Applying - As it’s an unsecured loan whose approval depends greatly on your credit score, it’s important you know the same so that you can apply without any fear of the application getting rejected. But ensure you don’t check the score often as that creates a credit hungry impression. This impression can play spoilsport by reducing the score much more than you can think of. The credit score should at least be more than 700 so that the approval for a personal loan can be granted. If the score is above 750, not only the application can be approved quickly but it can also help you get lower interest rates on the loan. You can check your credit score for free at Wishfin.

Avoid Making Multiple Applications - When the application is made multiple times, there will be multiple hard credit enquiries. And if the application gets rejected, the credit score will reduce drastically.

Personal Loan Repayment Methods

Repaying a personal loan is easy as that can be made through the EMI on a specified date as fixed by the lender. In the loan agreement deal, the lender will mention the date on which the EMI payment will be deducted. The lender fixes the Electronic Clearing Service (ECS) on the account from which the EMI will be deducted. The other repayment method includes submitting post-dated cheques to the lender.

What is a Personal Loan Balance Transfer and How Much Can You Save with the Same?

A personal loan balance transfer is a process by which you can switch the outstanding loan balance to another lender at a lower rate of interest. Since a personal loan doesn’t run for more than 5 years, the savings on a balance transfer will be significant only if the new rate is at least 3%-4% lower than the existing one. The new lender will also charge a fee on the balance transfer deal. So, you need to make calculations before applying for the said transaction. To give you a brief idea of the savings via a balance transfer, let’s consider an example below.

Example - Rakesh Gupta took a personal loan of INR 8 lakh at an interest rate of 16% per annum. The loan, which was taken for 5 years, has completed 2 years till now. He gets the balance transfer offer from a new lender at 12% per annum. How much can he save should he opt for the balance transfer facility? Let’s check out the table below to know the same.

The new lender will charge a balance transfer fee. If the fee is INR 5,000, the savings from the transaction will reduce to INR 28,700.

What Does the Lender Seek Before Approving a Balance Transfer Deal?

The new lender where you apply for a balance transfer deal will check your credit score. If it’s more than 750, you won’t have any problem in ensuring the deal happens successfully. But credit score alone won't be enough. The lender can also check the repayment track of the existing personal loan and other debt, if any. For a hassle-free approval, it is imperative the overall repayment track does not show any default or payment delays.

What is a Top-up Personal Loan?

Already servicing a personal loan and wanting funds to meet your new needs? Well, a top-up personal loan is what you can apply for. It is the amount that you get over the existing personal loan. Well, you can get a top-up loan even when you look to transfer the outstanding personal loan balance to another lender. The new lender will add the top-up amount over the transferred balance. You will need to pay the aggregate loan amount at a new rate of interest.

Pre-approved Personal Loans

If you have an existing relationship with a lender, you can get pre-approved personal loans wherein you don’t require to submit documents. Because the lender will have documents by the time when you would have associated with the same, be it through a loan or savings account. If you hold a credit card, savings account, home loan or any other relationship with the lender, you can get a pre-approved personal loan.

Prepayment of Personal Loans

As stated earlier, prepayment is a term that means the payment of the loan before its original lifetime. But you are allowed to prepay only after you have paid your first 12 EMIs. You can prepay the loan in full or parts. Some lenders may allow only full prepayment and not part prepayment. This can lead to some charges, which can vary not only from one lender to another but also at the time of prepayment. Check the table below showing the charges of top lenders as well as the rules concerning the prepayment.

Benefits of Full Prepayment

A full prepayment when done at the right time can ensure maximum savings to a borrower. With this, you are relieved from loan obligation and save on your interest payment which otherwise will get deducted from your account. This will further help you concentrate on your future better. The savings from a full prepayment can be used in meaningful investments for a better life ahead.

Benefits of Part Prepayment

The part payment happens by paying a portion of the outstanding loan balance. It will reduce the principal outstanding and so will the EMI and interest payment.

When Should You Prepay a Personal Loan?

Prepayment is more beneficial when there are more years of repayment ahead of you. So, if a personal loan is taken for 5 years, you can save more when the loan is 2 or more years away from getting finished compared to when a loan is a year or less from running its lifetime.

But How Will You Accumulate the Prepayment Sum?

If you want to do so in earnest, look at the Personal Loan EMI Calculator carefully and regularly. With the calculator, you can check the repayment estimate at different points of time. For a full prepayment, you need to be very meticulous in your savings. Set a monthly saving target and look to achieve it by putting curbs on unnecessary expenses. Follow the same practice even when you look to do a part payment. All that can be planned and executed successfully with the help of the calculator. But where should you put your savings to ensure a successful prepayment? You can split your savings in fixed deposit, recurring deposit, and even in mutual funds.

Procedure for a Personal Loan Prepayment

To ensure the prepayment goes successfully, you need to visit the branch of the lender and present a cheque of prepayment amount. The lender will go through the loan statement carefully and process the prepayment accordingly. If you go for a full prepayment, the loan will come to an end. Whereas, if you for a part prepayment, a fresh loan agreement letter will be issued by the lender with a new EMI. You will need to affix your signature at the appropriate space for it to go through.

What Should You Do After the Personal Loan is Closed?

After the personal loan is closed, you will need to get a No-objection Certificate (NOC) issued from the lender. The NOC is a document that validates your personal loan repayment. Besides, you can ask the lender to return all your post-dated cheques if you are using this mode of loan repayment.

What is a Personal Statement and Why Should You Check it?

A personal loan statement is a document that shows the details of repayment made so far and the one to be made. You can check the payment made against the principal and interest besides the outstanding loan balance. This will help you take a call on balance transfer and prepayment. If your interest rate is higher than what’s prevailing in the market, you could see the effect in your loan statement. You can thus plan a balance transfer or look to pay a portion of the outstanding balance using the prepayment facility.

Frequently Asked Questions (FAQs)

What is a Personal Loan?

A personal loan is an unsecured loan granted by banks and non-banking finance companies (NBFCs) to fulfill fund needs for various purposes such as marriage, education, travel, and even medical emergencies

How Much Personal Loan Can You Get from Banks and Financial Institutions?

The loan amount is contingent on your income, repayment potential, credit score, etc. Different lenders have different minimum and maximum limits on a personal loan. Most banks offer a maximum loan of INR 15 lakh-20 lakh, with a few raising the maximum limit to INR 50 lakh.

For How Long Can You Get a Personal Loan to Meet Your Needs?

You can get the loan for a maximum of 5 years. However, a few lenders like SBI can give you as much as 6 years to repay the loan.

How Quickly Can You Get a Personal Loan?

You can get a personal loan in 3-7 working days.

What is the Rate of Interest on a Personal Loan?

It can be anywhere between 10%-20% per annum.

What are the Factors That Can Influence Personal Loan Interest Rates?

These factors include your income, repayment potential, credit score, etc.

Is the GST Levied Over the Interest Rate on a Personal Loan?

No, the Goods and Services Tax (GST) is not levied over the interest rate on a personal loan.

What are the Types of Personal Loan Interest Rates That Lenders Offer to Borrowers?

Personal loans can be offered on a flat and reducing balance basis. In a flat rate, the interest will be charged on the principal outstanding all the time irrespective of which stage the loan is in. Whereas, in a reducing balance, the interest is charged on the principal outstanding left after the EMI payment.

What is an EMI?

An Equated Monthly Installment (EMI) is a sum of principal and interest payable every month to the lender. Greater the rate of interest, the higher will be the EMI amount and vice-versa.

How Soon Can You Apply for a Personal Loan?

Anyone working in a public or private entity can apply for a personal loan as soon as he/she attains the minimum age of 21 years. Self-employed, on the other hand, will need to be a minimum of 24 years at the time of loan application.

How Much Work Experience is Required to Get a Personal Loan in India?

You must have worked for a minimum of 2-3 years to get a personal loan in India. However, lenders also want you to have a minimum of 1-year work experience with the current organization.

Do Lenders Seek a Credit Score While Sanctioning Personal Loans?

Yes, they do! Since it’s an unsecured loan, lenders tend to be wary before sanctioning the loan. They check the credit score of an applicant to get an idea of his/her creditworthiness.

How Much Credit Score Do You Require to Get a Personal Loan in India?

For instant personal loan approval, the credit score has to be 750 and above. Even if the credit score is below 750 but remains above 700, the loan can be approved but at a higher rate of interest.

What is the Processing Fee of a Personal Loan?

It’s a one-time fee that banks and financial institutions charge to process your personal loan. The fee can be a flat amount or a certain percentage of the loan amount. A 18% GST will also be levied over the processing fee amount.

What Will Happen If You Pay EMI After the Due Date?

It will amount to late payment and penalty charges at 2% will be deducted from the account. The GST will also apply over the late payment amount.

Will the Late Payment Affect Your Credit Score?

The impact of late payment on your credit score will depend on the time difference between the due date and the late payment date. If you delay the payment by a few days, it will not have any impact on your credit score. However, if the delay is more than a month, the lender will report the same to the credit bureau, which will then reduce your credit score. But you should make it a point to pay on time.

What is a Personal Loan Settlement and Does It Impact Your Credit Score?

A personal loan settlement is a process by which you can overcome the loan burden by paying a settled amount to the lender. The settled amount is less than the amount due. When you pay the same, the lender will mark it as debt settled in its monthly report to the credit bureau. Since the settlement happens in agreement with the lender, there may not be an impact on your credit score. But the door for unsecured loans may shut with the same.

Is a PAN Card Mandatory to Apply for a Personal Loan?

As per RBI regulations, transactions worth INR 50,000 and above require one to submit a PAN card. Since the minimum personal loan amount is INR 50,000, having a PAN card becomes mandatory.

Don’t You Get a Personal Loan Without an Aadhaar Card?

An Aadhaar Card is a document that not only authenticates identity but also the residence of an individual. But not having it does not mean you can’t apply for a personal loan. There are alternatives such as Voter ID, Driving License, Passport, electricity bill, telephone bill, etc. You can submit any of these to the lender at the time of application.

Do Lenders Ask for a Guarantor Before Disbursing a Personal Loan?

Mostly, public lenders ask for a guarantor who can be your immediate family member, relative or even your friend. These lenders allow those individuals to become a guarantor who must have a banking relationship with them.

Can a Personal Loan be Given on a Joint Basis?

Yes, it can be given on a joint basis provided all the applicants are earning. It’s a good way to increase your loan eligibility. In case the income you earn falls short of meeting the loan obligation, the addition of earning members to the list of applicants can ensure confidence among the lender about a timely repayment. With that confidence, the lender can release the loan amount comfortably.

Can I Get a Personal Loan if I Have a Bad Credit Score?

No, you can’t! But you can get a secured loan by submitting collateral such as a fixed deposit, life insurance policy, mutual fund, national savings certificate (NSC), etc.

Does a Personal Loan Prepayment Lead to Charges?

Yes, you will need to pay around 2%-4% of the principal outstanding plus 18% GST if you are doing full prepayment. If you do a part payment, around 2%-4% of the paid amount plus 18% GST will be deducted from the account.

How to Make EMI Payment on Time?

You can get a standing instruction of ‘Auto Pay’ set by the bank or NBFC where you apply for a personal loan. With this, the loan EMI will be debited automatically from the bank account on the due date. Just have the required balance in your account so that the EMI processing remains successful.

Can I Get a Personal Loan if Any Other Loan is Running?

Yes, you can! If you have space for personal loan repayment despite a running loan obligation, the lender won’t have a problem disbursing a fresh loan. It all depends on what your income is and the kind of repayment potential you have. If you earn high and can pay both loan obligations without any hassle, the fresh loan will get disbursed to your bank account.

Will a Top-up Loan Boost Your Credit Score?

It’s an addition to your loan portfolio and your obligation only rises with the same. So, it’s important for you to pay the EMI of the existing loan as well as the top-up loan on time. This will help boost your score. In case you fail to pay on time, the score could come down.

How Does the Lender Assess My Repayment Potential?

The lender assesses your repayment potential from the bank and income statement you submit to it by the time you apply for a personal loan. While salary slips will give the lender an idea of the earnings you have, the bank statement will show all - the expenditure, savings, earnings, and even the running loan EMI or credit card payment, if any.

Whether Applying at Multiple Lenders Lead to Rejection of the Application?

Applying for a personal loan at multiple lenders, that too, at the same time will mean multiple hard credit enquiries. This reduces the credit score more than the soft enquiries that you do by checking the score on the official website of credit bureaus such as CIBIL, Experian, Equifax and CRIF HIGHMARK, etc. But whether the application gets rejected or not depends on other factors too. It is not necessary that all lenders will do an enquiry at the same time. Since lenders are flush with applications, having a credit check done by all the lenders at the same time may not be possible. There lies your chance of getting an approval. But it is advisable not to apply at different lenders at the same time.

Can I Apply for a Personal Loan Offline?

Yes, you can! Just visit the branch of the lender with your documents. Ask for the personal loan application form, fill the details as asked, put a signature and affix your photograph at the right space. Submit the form along with your documents.

What Happens When the Lender Approves Your Personal Loan Application?

You get the approval intimation on your mobile number and email address. Further, you get a loan sanction letter stating details such as loan amount, interest rate and tenure.