Personal Loan

Apply Now

How does personal loan works?

Personal loans are offered by banks and online lenders and can be used for a wide variety of needs, from making a home repair to paying for dental work. It can open up new possibilities, act as a lifeline in tough situations and even help you repair your finances when you’re badly in debt.

A personal loan is a short-term loan to assist you with your finances. These loans have become quiet popular today, and now this is the main way to get financial assistance in the form of a cash advance.

Key areas to utilize Personal loan:

Check out the following pictorial representations, It describes the purposes of Personal Loan

Festive Spendings

Medical Emergencies

Dream Marriage

Higher Education

Home Renovation

Higher End Lifestyle Products

Higher End Consumer Goods

Dream Vacation

Eligibility for a Personal Loan:

Since it is unsecured in nature, lenders have stricter norms regarding eligibility and sanctioning of personal loan. But some of the basic eligibility criteria the applicant must fulfill are:

  • Nationality: Indian.
  • Age limit - The standard age limit is minimum 21 Years.
  • Employment Status : Employed or In-business/self employed.
  • Repayment Tenure: upto 60 Months
  • Credit Score : CIBIL score of 600 or more

Rate of Interest and Loan Amount

The Factor depend on rate of interest and the eligibility are:-

  •  Your employment is also an important factor in the loan-approval process.
  • The higher your credit score, the better are your chances of being approved.

Fees and Charges

As far as processing fee is concerned, it varies from bank to bank, loan amount or the special schemes operated by respective lending institutions. It will be in the range of 0.25% to 2% + Service tax. However the best part of Personal Loan is processing fee is not charged upfront, it gets deducted from the loan amount. So here we get good option to compare the loan schemes with various banks and pay processing fee to the bank we zeroed in.

Foreclosure Charges also vary from lender to lender. In few institutions, it is NIL after a certain period of time which is known as Lock-in period or the charges get reduced after 1 year or 2 years.

Let us help you to serve you better…

Documents Check-list

To initiate the personal loan process, the lender will require:
Application Form signed by applicant with photograph

KYC Documents:

  • Proof of Identity  Pan Card / Valid Passport / Voter ID card / Valid Drivers License.
  • Proof of Address  Aadhaar card / Electricity /  Phone Bill of latest 3 months.

Proof of income and other documents:

  • Form 16 for the previous 2 years.
  • Salary slip for previous 3 months.
  •  Latest bank statement/Passbook from where you can show salary/income being credited for the previous 6 months.
  •  Employee contract or appointment letter in case of current employment is less than 1 year.
  •  Passport size photograph of all the applicants / co-applicants to be affixed on the application form and signed across.
  •  The Cheque for processing fee.

You should know this before taking Loan

Personal Loan Feature:

Complete flexibility of end-use. There are no restrictions on how you should spend the loan amount. This in contrast to a home loan or auto loan where the loan amount can only be used to buy a property or a vehicle respectively. A personal loan allows you the freedom to use the money in any way you want.

Lack of collateral. A personal loan is an ‘unsecured loan’, meaning you are not required to provide any security to the lender in the form of cash, shares or any other assets. This might make it more attractive to some customers who may not be able to raise the cash required as collateral.

Process for Personal Loan:

The process for taking a personal loan is quick and once the required docs and application are submitted, it goes through verification and underwriting process to check the creditworthiness of the borrower. This could mean whether a loan can be sanctioned or not? if it is sanctioned, it decides the loan amount and the interest rate at which loan would be granted. Post this disbursal of the loan amount happens.

This process can be instant or take up to a week depending upon the Bank and creditworthiness of the borrower.

 

Advantages Of Personal Loans:

Personal loans are unsecured which means the lender cannot repossess your property. They are safer than credit cards because their interest rates are usually fixed, and because they have a definite payment schedule, personal loan balances can’t be run up again.

Personal loans can improve your credit rating because credit scoring systems treat installment debt more favorably than revolving debt like a credit card. Finally, personal loans usually come with lower rates than comparable credit cards.

 

FAQ

You may need your employment information and income details, as well as your bank account information. If you're consolidating debt and want to pay creditors directly, you'll also need those account numbers and balances.

Our loans specialists review your application. If we have questions, we'll give you a call. If you have questions, it's easy to check your application status.

Most people get a decision the same day. Just be sure your application is complete and your information is complete.

Discover Personal Loans lets you check your rate before you apply. Your interest rate is determined by many factors, including your application information, your credit history, and the loan term you select.

Your income indicates your ability to repay the loan you take. The more income you earn, the more satisfied a bank will feel about your ability to repay.

The company or organisation you work for indicates your work stability and earning capacity. For example, if you work for a renowned organisation, it may indicate that your job is secure. This means you bear a lower risk of not repaying the loan.

Having a good credit history or credit rating makes you eligible for a better loan. You may also get better loans terms and flexible repayment options.

Your credit score is a reflection of your credit history. It takes into account all your past credit card bill payments and loan repayments. The score shows your promptness in repaying your loans and bills. It also indicates how much of your credit limit you have been using. In short, it reflects how responsible you are in financial matters. Lenders prefer offering loans to individuals who have good credit.

Personal loans feature tenure of 1 year to 5 years or 12 to 60 months. In rare cases, shorter or longer personal loan tenures may be allowed by the borrower on a case by case basis.

Yes, personal loan can be applied either by yourself (singly) or together with a co-applicant (jointly).The co-applicant needs to be a family member like your spouse or parents. By getting a co-borrower, your loan application will be processed in a higher income bracket, enabling you to avail a larger loan amount.