Personal Loan
A personal loan is a type of loan that anyone with a job or a business can get. You can use the money for anything you need, like personal or business expenses. It’s easy to get and doesn’t require a lot of paperwork compared to other loans.
Characteristics and Advantages of Personal Loans
Personal loans are a popular choice for financing lifestyle goals and overcoming fund shortages due to their easy accessibility, minimal documentation, and quick disbursal. Let’s explore the key features and benefits of personal loans:
- Unsecured loans, no need for collateral
- Freedom to utilize funds without any specific limitations
- Loan amounts reaching up to Rs. 40 lakh, with potential for more at the lender’s discretion
- Repayment period extending up to 60 months, with possible extensions on an individual basis
- Additional top-up loans available from various lenders
- Streamlined documentation requirements
- Swift and prompt disbursal of funds
Varieties of Personal Loans
In addition to standard personal loan offerings, several banks and NBFCs provide various personal loan variants to cater to the distinct financial needs of their customers. While the fundamental features such as tenure and processing fees remain similar to regular personal loans, these variants are tailored to address specific requirements. Here’s a brief overview of some of these personal loan variants.
Instant Personal Loan
Instant Personal Loans are typically pre-approved loans with immediate disbursement. Banks and NBFCs usually extend these loans to specific customers based on their credit profiles.
Short-Term Personal Loan
Short-term Personal Loans come with brief repayment periods, typically spanning from a few days to 12 months. Ideal for smaller loan amounts, these loans often employ end-to-end digital processes, ensuring swift approval and disbursal for applicants.
Personal Loan for Education
Education Personal Loan is designed for individuals seeking financial assistance for higher education, whether in India or abroad, including vocational courses. This option is tailored for those who may face challenges securing a traditional education loan
Top Up Personal Loan
Personal Loan Top-Up is an option extended to existing borrowers who require extra funds to address their financial needs. Typically available to eligible borrowers with a good repayment history and/or completion of a specified number of EMIs.
Personal Loan Balance Transfer
The Personal Loan Balance Transfer option enables borrowers to move their existing personal loan to a new lender, often for lower interest rates or improved loan terms. It’s crucial to consider this facility only when the potential savings from the transfer outweigh the associated costs.
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Calculator Disclaimer
The repayment amount shown using this calculator is an estimate, based on information you have provided. It is provided for illustrative purposes only and actual repayment amounts may vary. To find out actual repayment amounts, contact us. This calculation does not constitute a quote, loan approval, agreement or advice by My Finance. It does not take into account your personal or financial circumstances.
Criteria for Obtaining a Personal Loan
The requirements for qualifying for a personal loan may differ among lenders because of their diverse credit risk policies. Eligibility criteria may also fluctuate based on the type of loan and the applicant’s occupation profile. Below are several personal loan eligibility conditions commonly employed by the majority of lenders:
- Age: 18 – 60 years old
- Monthly Salary: Minimum of Rs 15,000 for employed individuals
- Annual Income: Minimum of Rs 5 lakh per annum for self-employed individuals
- Credit Score: Ideally 750 and above; a higher credit score enhances the likelihood of loan approval
- Job Stability: Typically 1 year, although some lenders may necessitate a more extended work history
- Business Sustainability: Generally 3 years of continuous business operations, though certain lenders may require a more prolonged period
- Employment Category: Salaried workers engaged in reputable organizations, multinational corporations (MNCs), private and public limited companies, government entities, public sector undertakings (PSUs), and large enterprises
Necessary Documents for Personal Loan
Personal loan providers necessitate the submission of documents from applicants to verify identity, income, loan repayment capability, and residential address. The required documents are generally consistent among lenders. The following is a common set of documents you’ll likely need to provide when seeking a personal loan:
- Proof of Identity:
- Passport
- Aadhar Card
- Voter ID
- Driver’s License
- Proof of Address:
- Utility Bills (electricity, water, gas)
- Rental Agreement
- Passport
- Income Proof for Salaried Individuals:
- Salary Slips
- Form 16
- Bank Statements
- Income Proof for Self-Employed Individuals:
- Income Tax Returns
- Profit and Loss Statements
- Business Registration Documents
- Employment Proof:
- Offer Letter
- Employment Certificate
- Appointment Letter
- Bank Statements:
- Recent Bank Statements
- Savings Account Statements
- Photographs:
- Passport-sized photographs
- Credit Score:
- Credit Report
