Features and Benefits
1) No Collateral Required
Personal loans are unsecured, meaning there's no need to pledge any assets. Approval is based on factors such as your creditworthiness and financial history.
2) Flexible Use of Funds
These loans can be used for various purposes, including home renovations, medical bills, or travel expenses.
3) Repayment Flexibility
Loan tenures typically range from 12 months to 60 months, allowing you to choose a repayment schedule that suits your budget.
4) Simple Documentation Process
The documentation is minimal, requiring basic identity, income, and address verification. Applications can be made both online and offline.
5) Quick Disbursal
After approval, the loan amount is usually transferred to your account within hours. Pre-approved loan applications can have an even faster processing time.
6) Loan Amount Range
Personal loans typically range from Rs. 10,000 to Rs. 40 lakh, depending on your financial profile and eligibility.
Personal Loan Eligibility Criteria
The eligibility criteria for a personal loan include the following:
- Age: 21 years to 68 years
- Employment Type: Salaried, Business Owners, Student, Retired, Home-maker, Self-employed professionals
- Employment Status: Should be employed or in business for minimum 2-5 years
- Minimum Monthly Income: Over Rs. 5,000
- Work Experience: 1 to 3 years and above
- Credit Score: 750 or more
- Maximum Existing EMI: Less than 65% of monthly income
Factors Affecting Personal Loan Interest Rates
Several factors determine the interest rate on a personal loan. Here’s a look at the key factors:
- Income: Higher and stable incomes usually result in lower interest rates.
- Credit History: A higher credit score typically leads to lower interest rates.
- Employer's Status: Employment with a reputable company can lead to better terms.
- Debt-to-Income Ratio: A high debt-to-income ratio could result in higher interest rates.
- Rapport with the Lender: A long relationship with a lender may lead to preferential interest rates.
- Default History: A history of defaults can result in higher interest rates or rejection.
Documents Required for a Personal Loan Application
The documents required for a personal loan application may vary based on the applicant's employment status. Below are the details:
Common Documents
- Identity Proof: Voter ID, Passport, Aadhaar Card, Driving License
- PAN Card
- Signature Proof: PAN Card, Passport
- Address Proof: Ration Card, Rent Agreement, Passport Copy, Aadhaar Card, Utility Bill, Voter ID Card
- Bank account statement from last six months
Salaried Individuals
- Salary slips from the last 3 months
- Form 16 or ITR returns
Self-Employed Individuals
- P&L account and balance sheet from the previous 2 years
- ITR from the last 2 years
- Business Proofs, like GST Number, Registration Certificate, License
- TDS Certificate, Income Tax Challans or Form 26 AS for declared income in ITR
