Benefits and Features of Personal Loan
One of the advantages of obtaining an online personal loan is that it doesn't require collateral. This means you don't have to pledge any assets to secure the loan. While this may affect the interest rate, meeting the eligibility criteria can easily grant you a low-interest personal loan. Minimal Documentation
In today's digital era, the verification and documentation process for personal loans has become remarkably efficient. This is especially true for instant personal loans, which are disbursed quickly and require only a minimum set of documents for approval.
Easy ApprovalPersonal loans offer easy and hassle-free approval, making them an ideal choice during financial emergencies. Moreover, the digitization of the process has significantly reduced the time required for verification.
Multipurpose in natureUnlike other forms of credit that are specific to certain purposes, a personal loan can be used for almost anything except for investments and illegal activities. Whether it's for a wedding, home renovation, or any immediate financial requirement, a personal loan provides a flexible solution to address various needs.
Personal Loan Eligibility
Personal loans are offered by most banks and NBFCs, each with their own specific eligibility criteria. Nonetheless, there exist certain common requirements across all financial institutions. The eligibility criteria to get an online personal loan approval for salaried and self-employed individuals are:
Age | 21 years - 60 years |
Employment Type | 1. Salaried |
Credit score | 750 or above with a good credit history |
Minimum Net Income (Monthly) |
|
Loan Amount | Up to ₹10 lacs depending on the credit profile |
Work Experience | Salaried
|
Documents Required for Personal Loan
Below is a list of the typical documents needed for the approval of an online personal loan:
Salaried individuals
- Proof of Identity and Age
- Fully completed personal loan application form with a photograph
- PAN Card
- Proof of Residence - Passport, driving license, Voter ID, postpaid/landline bill, utility bills (electricity/water/gas)
- Bank statements from the last three months (preferably from your salary account)
- Last three-month pay slips
Personal Loan Details
BANK/NBFC | Interest Rate(pa) | Loan Amount | Processing Fees | Part Payment | Pre-closure Charges | Locking Period | Tenure |
Upwards | 16.00 % to 32% | 20,000 Thousand to 5 Lakhs | Up to 2 % to 4 % of the loan amount | Up to 40% of loan amount every year | Upto 5% on your principal outstanding + GST | 3 Month | 12 to 48 months |
Loan Tap | 16.00 % to 24% | 50 Thousand to 10 Lakhs | 2 % of the loan amount | Up to 40% of loan amount every year | 0-6 Months - 5% of Principal Outstanding >6 months - 0% | 6 Month | 12 to 60 months |
Representative Example:
Loan Amount: ₹1,00,000 Tenure: 36 months Interest Rate: @18%* (reducing basis) EMI: ₹3,615 Total Interest Payable: ₹3,615 x 36 months - ₹1,00,000 Principal = ₹30,140 Processing fee (@ 2%) = ₹2,000 + GST = ₹2,360 Disbursed Amount: ₹1,00,000 - ₹2,360 = ₹97,640 Total Amount Payable: ₹3,615 x 36 months = ₹1,30,140 Total Cost of the Loan = Interest Amount + Processing Fees = ₹30,140 + ₹2,360 = ₹32,500
FAQs about Personal Loans
1. Is it a good idea to get a personal loan?
Personal loans can be a beneficial option in times of financial crisis, providing quick access to funds without the need for collateral.
2. How can I get a personal loan?
To obtain a personal loan, you need to meet certain eligibility criteria, including age requirements, employment status (salaried), a good credit score, and a minimum monthly income.
3. What is the eligibility for a personal loan?
The eligibility for a personal loan involves meeting specific criteria such as age limits, employment status, credit score, and minimum monthly income.
4. Are personal loans good for your credit?
Personal loans can impact your credit score, and missing loan repayments can have adverse effects due to the unsecured nature of these loans.
5. How long does it take to get approved for a personal loan?
With the digitization of loan processes, personal loan approvals have become faster, usually instant, although the disbursal of funds may take 24 hr due to documentation procedures.
6. Is it possible to pay off a personal loan before tenure?
Yes, it is possible to pay off a personal loan early by making a prepayment. However, this may attract a penalty determined by the specific lender.
7 What is the average interest rate on a personal loan?
The average interest rate on personal loans ranges from 16.00% to 32%, but it can differ among lenders.
8. What do banks look at when applying for a personal loan?
When applying for a personal loan, banks consider factors such as age, monthly income, credit score, credit history, and necessary documentation.
9. Who has the best personal loan rates?
The best personal loan rates depend on the borrower's credit profile, including a good credit score, consistent income source, and employment status (salaried).
10. What is the minimum salary for a personal loan?
Banks & NBFCs pre-decide on a minimum salary for eligibility of an individual to avail of a personal loan. While this can vary from lender to lender, one should be looking at ₹20,000 or more salary for approval of personal loans.
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