Personal Loan
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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.
Age
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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Rates as low as 11.29%*
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Compare Banks by their Interest Rates
Banks differ in terms of the offered Interest Rates. Now Rate your bank based on the Rate it offers.
Top Banks providing Personal Loan in India
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 banks in India:
| Lenders | Interest Rate (p.a) | Loan Amount (in ₹) | EMI per lakh(in ₹) | Processing Fees | Prepayment Charges |
|---|---|---|---|---|---|
| HDFC Bank | 10.99%-19.50% | For Salaried-Up to ₹ 25 lakhs. For Self-employed- Up to ₹ 15 lakhs | 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 + GST |
| ICICI Bank | 11%-18.49% | For Salaried- Up to ₹ 20 lakhs For Self-employed- Up to ₹ 30 lakhs | 2,199 | Up to 2.25% of loan amount + GST | 5% of principal outstanding + GST |
| Bajaj Finserv | 11.99%-16% | Upto 25 lakhs (only for salaried) | 2,326 | 2.25% to 3% of the loan amount | 4% on principal outstanding + GST |
| SBI | 11.90%-16.55% per annum (unsecured), 10.55%-15.65% per annum (secured) | Up to ₹ 15 lakhs | 2,247-2,461 | 1% of the Loan Amount + GST | 3% of the principal outstanding + GST |
| Kotak Mahindra Bank | 11%-18.45% | Up to ₹ 15 lakhs | 2,199-2,877 | Up to 2% of the loan amount+ GST | 5% of principal outstanding + GST |
| Axis Bank | 15.50%-24.00% | Up to ₹ 15 lakhs | 2,419 | 1.50% to 2.00% + GST | NIL |
**Above mentioned stats are assumed based on tenure of 5 years.**
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
Documents required for a personal loan
The documentation process for a personal loan is easy. 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 while 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 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 this unsecured loan ranges from 11% to 24% per annum. However, to make you understand better, below is a table showing the calculations on a loan amount of ₹2,00,000, taken for a tenure of 5 years at an interest rate of 11% per annum.
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 ₹) |
|---|---|---|---|---|---|
| 2,00,000 | 11% | 1 | 17,676 | 12,116 | 2,12,116 |
| 2,00,000 | 11% | 2 | 9,322 | 23,718 | 2,23,718 |
| 2,00,000 | 11% | 3 | 6,548 | 35,719 | 2,35,719 |
| 2,00,000 | 11% | 4 | 5,169 | 48,117 | 2,48,117 |
| 2,00,000 | 11% | 5 | 4,348 | 60,909 | 2,60,909 |
Amortization Table
| Year | Principal (in ₹) | Interest (in ₹) | Balance Amount (in ₹) |
|---|---|---|---|
| 1 | 79,395 | 51,030 | 4,20,605 |
| 2 | 88,574 | 41,851 | 3,32,032 |
| 3 | 98,813 | 31,611 | 2,33,218 |
| 4 | 1,10,237 | 20,188 | 1,22,981 |
| 5 | 1,22,981 | 7,443 | 0 |
How to Apply for a Personal Loan
The process of applying for this type of loan can be understood in 3 simple steps:
- Check Eligibility: Before you apply for a loan, it is important to check your eligibility. Different banks have different eligibility norms, so in order to get the finances, you need to meet the eligibility criteria set by your favorite lender.
- Compare Interest Rates: The next step is to compare the interest rates of all the lenders, offering you the same credit facility. After doing the comparison, it would be easier for you to take a calculative decision.
- Apply Online: After choosing the lender, all you need to do is just apply for a personal loan online. Visit the site, follow few simple steps and it's done!
Personal Loan Application Form
To apply for a personal loan, you need to fill an application form first. If you are applying online, you can fill this form by visiting the banks site or you can also visit the branch near you. In this application form, you are required to fill your personal as well as professional details such as:
- Name of the applicant/s
- Date of Birth
- Residence Details
- Purpose of Loan
- Office Address for self-employed
- Income Details
What is Personal Loan?
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. Whether you are salaried or self-employed, one can easily avail this loan and get the finances instantly to meet their varied personal needs. When it comes to availing this loan, you can easily avail it either online or by visiting the branch near you. However, one of the biggest advantages associated with this unsecured loan is the fact that it does not require any collateral/security. You can get the loan amount instantly at attractive interest rates and flexible tenures. Not only this, in fact a one-time processing fee is also being charged by the banks while offering you this credit facility. However, one thing that needs to be mentioned here is the fact that post GST availing a personal loan is going to be slightly costly as 15% service tax is now be replaced with a standard 18% rate. Yes, talking about the GST impact on personal loan, the charges such as processing fee and prepayment charges would jump a little.
Why Take a Personal Loan?
A personal loan is a great way to meet up the financial needs in a temporary financial crisis. 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. Yes, banks/NBFc offer you the funds instantly so that you can meet your varied needs without any hassle. You can apply for it anytime, from anywhere so as to get the money. This credit facility comes handy for all your personal needs be it a wedding, travelling, home renovation, medical emergency, paying credit card debt and so on.
Features and Benefits of a Personal Loan
- Easy Loan Availability: When it comes to availing this loan, you don't need to worry as many lenders exist in the market that offer you the same credit facility. You can choose a lender of your choice and get the finances to meet your needs.
- Simple Documentation: While availing you this credit facility, the lenders do not ask for a long list of documents. Well, as there is no asset verification is required, hence this loan can easily be availed by submitting the minimal documents.
- Fastest Approval: In case of a personal loan, less legal formalities and documentation are needed, hence the lenders usually approve the loan application quickly.
- No Collateral/ Security Required: A personal loan is given on the basis of the financial stability of the borrower. As a result, the lenders don’t ask for any security or collateral from the borrower.
- Multi Purpose Loan: A borrower has the freedom to use the loan money for many purposes.
- Flexible Tenures:This credit facility comes with a flexibility tenure option that makes it more convenient for a borrower to repay the loan amount easily in the future.
- Higher Amount: On the basis of the income profile, generally, a borrower can get a loan ranging between ₹ 50,000 to ₹ 40 Lakhs.
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
Personal Loan FAQs
Q. What is the minimum loan limit for a Personal Loan?
A. Generally, the minimum loan amount that is offered for a personal loan is ₹50,000/-.
Q. What is the maximum loan limit for a Personal Loan?
A. In general, the maximum loan amount that a borrower can take is ₹40lakhs.
Q. Is there any security required to take a personal loan?
A. Well,, there is no security required for a personal loan as it is an unsecured loan.
Q. Does CIBIL score matters when it comes to a Personal Loan?
A. Yes, CIBIL score and credit history are important when it comes to PL. Banks often prefer the CIBIL score of 700-750 out of 900.
Q. What is the disbursal time in case of a Personal Loan?
A. If all the documents are ready, a borrower can get a loan within 72 hours to 3-4 working days.