Overview

A Personal Loan is a loan for your personal use, be it your child’s wedding, a dream vacation, or a shopping extravaganza. A personal loan does not require any security or collateral and can be availed without much fuss. Typically personal loans range from Rs. 50,000 to Rs. 20 Lakh with a tenure typically ranging from one to five years. Getting a Personal loan is quite stress free and there are typically a number of offers in the market most of the time.

Apart from the rate of interest banks also charge some fees which are usually of two types. Once when you are applying for the loan and once when you are pre-closing the loan. The fees when charged at the time of processing called as Processing Fees vary from 2-3% of the loan amount. This could be reduced if you have the ability to bargain. the second charge is the prepayment penalty paid at the time of pre-closure. This too varies from 2 – 3 %. Similar to processing charges, you can also try to get this fees reduced.

Personal Loan - Eligibility

Personal loan eligibility depends upon various factors which differ from bank to bank. The main factor of course, is your ability to repay the loan. Banks that offer personal loans have stringent eligibility criteria and typically maintain profiles in terms of residence and your workplace. For example banks assess your repayment capacity with the kind of organisation you work in and even rate organisations. Having a healthy CIBIL score also helps in improving your eligibility towards getting a personal loan.

For your benefit, we have put down some important points to help you take care of your eligiblilty for a personal loan. Since a personal loan is given out with out any kind of security, or gaurantor, banks can get quite tough on eligibility. Keep the following points in mind to ensure your application goes through.

Personal Loan Eligibility Factors

Age
Age plays a role in personal loan eligibility and repayment capacity of an individual. Banks generally give out personal loans to salaried individuals typically between the ages of 21 to 60 years. For self employed individuals this range is from 25 to 65 years.

Stable Employment
A stable employment record goes a long way to improve your eligibility for a personal loan. Salaried individuals with a minimum of 2 years of professional service with 1 year in current profession and a self employed person with a minimum of 5 years of total earning tenure with at least 2 years in current profession are eligible for a personal loan. These factors vary from bank to bank.

Financial Statements
Current and previous financial statements of an individual are important considerations for a bank while evaluating if you are eligible for a personal loan. Banks have different specifications on minimum levels of income for applying for personal loans. The financial statements help in determining the repayment capacity of the individual and hence lenders take maximum cognizance of this aspect while giving an unsecured personal loan. The loan amount that you are eligible for is also decided based on the above criteria.

Credit Ratings
Your credit history is an important aspect that lenders look into while approving your personal loan application. Missed and delayed payments are things that can lower your eligibility for a personal loan. A good credit rating on the other hand enhances the total amount that one is eligible for.

Employer
Personal loans, being unsecured, have different eligibility requirements compared to the other loan types. Your employer will also have ac company rating that the bank keeps record of. Employers are grouped into categories on basis of their own records. Public sector employees and those working with reputed and established private companies are more eligible for availing personal loans as compared to others as there is stability in their income and some security which is taken on by the employer.

Outstanding EMIs
Any pending EMIs at the time of applying for a personal loan are likely to reduce your eligibility in terms of maximum amount or even loan disbursal. Since the amount is calculated on basis the EMI, the applicant can possibly repay the contributions towards other outstanding loans to reduce the total personal loan amount drastically.

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Personal Loan Documents

To make your Personal Loan application process quick, we request you to keep of below documents handy:

  • Aadhar Card to do eKYC. You just need the number and no upload will be required.
  • ID Proof (Not required if eKYC is done)
  • Address proof (Not required if eKYC is done)
  • Latest Salary slip for past 3 months
  • Latest Bank Statement for 3 months of salary account
  • Rent Agreement (if applicable)

Please note, if your mobile number is not registered with UIDAI for Aadhar, you will not be able to do eKYC.

Frequently Ask Questions

Personal loans eligibility criteria can be fairly stringent, considering banks need to mitigate their risk. Most people with a regular source of income such as salaried individuals or self-employed individuals can avail a personal loan. Banks consider salaried individuals, self-employed professionals and self-employed business people. The basic eligibility criteria are mentioned in our eligibility section.

An individual can borrow as much as they can repay. This in banking terms would mean a personal loan that has an EMI that does not exceed 40% of your monthly take home income, where the EMIs for existing loans are also deducted.

Personal loans don’t take too long to process. Banks usually disburse your loan within seven working days. However, it is recommended that you keep all your documents ready and in order, especially the post dated cheques (PDC), to avoid any delays. How fast you get your personal loan is dependent on your document collection process.

Yes, a co-applicant can be added in order to get a better credit score and avail of a larger loan amount. It also help you to increase the loan amount you are eligible for. The income of the co-applicant also features in your valuation and helps in increasing your chances of getting a personal loan.

Yes,  prepayment of loans can be done after 6 months of loan payments.

Apply for Home Loan

You can apply for a Home Loan online, All you need to do is provide your details below application form.