Personal Loan
About personal Loan Personal loans are unsecured loans available for both salaried and self-employed professionals to help meet their general personal or private expenses that are urgent and immediate in nature. Unsecured loans are loans without any security that can be availed quickly. The rate of interest on personal loans is higher than that on secured loans. Multiple personal loan providers in India offer cheap and quick loans. Banks and non-banking financial organizations provide a Personal Loan to satisfy the personal financing needs of the consumer. A lender will provide a loan at some interest rate to the customers for a fixed time period. The borrower then uses the loan amount for any personal purpose. The borrower is not answerable to the lender about the usage of the personal loan.
Benefits of Personal Loan There are several features that make them the first choice for anyone who needs money urgently.
Features of Personal Loan Life has various ways to provide us with surprise in a good manner or in a bad way, we cannot predict. We may need money in both situations. Whether it’s an occasion of happiness or any type of emergency we may need money beyond our savings. In all such cases, personal loans are the smartest option for us.
Types of Personal Loan in India Personal loans are easily available in India. You just need to fulfill the eligibility criteria and need to have the documents required in place along with a good CIBIL Credit score. Banks and NBFCs offer loan amounts typically ranging from ₹50,000 to ₹5,000,000. Below is a list of all the personal loans available in India. Overview of Personal Loan Process Personal Loans are a very fast and efficient method of getting the required fund in the time of need. And why not, compared to all other loans, they require minimal documentation and are processed faster. The process starts as soon as it is applied. The application process starts when you choose a particular lender and fill up the application form and hit the Submit button. Once you hit the Submit button, your application gets registered in our database. Once we have received your application, someone from our team will get in touch with you to verify that it was you who applied for the loan. Once verified, our executive will explain to you all the details about the lender and its product that you have applied for. In the case, if a better offer exists for you, then the same will be suggested to you. After you confirm the application, a schedule will be fixed for the documents collection. Our executive will visit the pre-decided place at a time of your choice to collect all the required documents and get your signature on the application form. Our team will verify all the details provided you for the authenticity once you provide all the required documents and a signed application. All the details will be confirmed only after they have been checked and crossed-checked. We will submit all your documents and your application form to the lender on your behalf so that you can carry on with what’s important to you. The lender may or may not call you to confirm the details. They will also then carry out a verification process at their end. The loan processing is complete after the lender verifies all your information. The lender then will inform you in detail about your final loan offer. It is at this stage that you will get to know the following: The advantage that you get when you apply for a personal loan with Indian Loan Bazaar is that you just need to apply. Everything else thereon will be carried out by our team, and the loan amount disbursed to your account. All this happens without any hassles of you running around and visiting any offices be it ours or the lenders. Just apply for a personal loan and let Indian Loan Bazaar take care of everything else. Best banks for Personal loans 1.ICICI Bank ICICI Bank is the second-largest private bank in India. The bank provides banking and financing services to its customers. ICICI is known for its customer satisfaction and quick redressal. The bank provides personal loans at an affordable rate which makes it more appealing to the customer. Features: Personal Loan Details: 2.HDFC Bank HDFC is India’s largest private sector bank with its headquarters in Mumbai. HDFC Bank is quick, competitive, and very transparent. HDFC understands your requirements and hence provides you the best option available Features: Personal Loan Details: 3.IndusInd Bank IndusInd Bank is one of the best banks for a personal loan. It has good scrutiny and offers loans for genuine applicants. It is the first bank rated for pretty good service and offers great options to its customers. The IndusInd Bank provides free services to all its customers. It is one of the best lenders to choose from in India. Features: Personal Loan Details: 4.Citibank Citibank Personal Loan services are considered one of the most approachable and the most inexpensive ones existing in the market. Citibank offers low-interest rates for all online applications, all relevant documentation requirements are nominal, and no collateral or guarantor is required. Features: Personal Loan Details: 5.Axis Bank Axis Bank offers the most flexible personal loans. Personal Loans are easily available, flexible, quick, and convenient and are available on affordable interest rates. Features: Personal Loan Details: Best NBFCs for Personal Loans 1.Bajaj Finserv Bajaj Finserv is one of the leading NBFCs in India. Bajaj Finserv offers affordable rates along with flexible repayment options. Features: Personal Loan Details: 2.Tata Capital Tata Capital offers personalized loan quotations for your personal loan. The NBFC offers personal loans to its customers keeping in mind their needs and requirements, and thus attractive interest rates and with multiple features. Features: Personal Loan Details: Picking the best Personal Loan Offer There is no shortage of either the lenders or the loan offers. As the disbursal is fast and needs no to minimal paperwork, it is very easy to avail. Yet, it is not an easy task to find the best offer. Comparing and choosing the best personal loan provider is always a tough task. It is essential to understand the way they work, bank interest rates, types of loans offered: secured, unsecured, fixed, and variable, overdraft and line of credit, go through the bank’s application checklist and look for the customer reviews & ratings. The interest rate is the first concern for most of us before applying for any loan. The total cost of a loan is determined by combining the interest rate and the length of the repayment period. So, to minimize the cost of borrowing, the loan should be of low-interest rate. Also, tenure should be short. The interest rate differs from lender to lender. To get the lowest interest rate, one must compare the offers of several lenders. The next points to consider are the fee and charges you are to pay to the lender, excluding the principal and the interest component. Some lenders may have high fees like processing fee, documentation fee, etc. while some others may keep it low to attract customers. In both cases, one has to be careful enough to dig deep into the matter and find out if the lender has any hidden charges. Finalize a lender only after evaluating all the involved costs to be paid to the lender during the loan tenure. The loan repayment period or the loan tenure should also be checked if you are trying to find the best loan offer. Loan tenure makes a great impact on the total outgo of the loan. Some lenders may offer you a very long loan tenure to make the EMI amount smaller. But remember the fact that, a longer tenure loan is costlier as the interest is compound interest. So, before you make any decision you can check using the EMI Calculator to determine how long it will take you to pay back the loan. Along with all other concerns, one must be aware of the repayment flexibility of the lender. As these are installment loans, hence the ideal repayment of the loan is done in EMIs for a fixed tenure. But during the loan tenure, you may save some extra funds. And you want to pay it towards the loan repayment to save the interest payment. In such scenarios, the lender should accept the prepayment of the loan. Some lenders may let you pay a prepayment penalty while some others may not allow you to do the same. So, apply only if the lender accepts prepayment. ILB now offers online Personal Loan in India! You can now get instant online personal loans with Indian Loan Bazaar. This online personal loan is a completely online hence paperless. This is not only about saving paper but its best part is a reduction in the processing time. The documentation process is online, i.e. the applicant has to upload all the required documents online on the portal itself. This is the simple, quick, and effective process that is best suitable in an emergency situation because in any kind of emergency every second matter. Online personal loans are unsecured loans in which nothing is required as a guarantee or guarantor like any kind of property or any person. Because of this reason only its interest rate is high as compared to the other loans. This online personal loan can be availed in any kind of emergency. Indian Loan Bazaar’s team strives hard to deliver personal loans within 24 hours. It is the quickest, effective, and simple process for both the lender and the borrower. The additional features of the online personal loan are:- To avail of the benefits of a paperless loan, all you need to do is fill the loan application which is available on the Indian Loan Bazaar website. Your application will be processed instantly. If you have any doubt then first go through the information mentioned on the website. The page will show you the best loan offer you are eligible for, and other information regarding your loan. If you choose to apply, upload all the required documents as mentioned, and proceed. As soon as you are done with this is, you will get a confirmation Call for the verification of all your details and to understand your loan requirement in detail. If everything goes fine, sign the Loan Agreement. As soon as the signed agreement is received, your loan amount will get disbursed in your account within 2 hours. Personal Loan for Self Employed Personal Loans for self-employed professionals are not as simple to avail as they are for salaried employees. As such, the lenders take extra precautions, conduct additional checks, and require more documentation. And they have a very reason for all such extra efforts. Unlike salaried employees, who are on a guaranteed fixed income, the monthly income of the self-employed professional varies. Their income can soar sky-high in some months or some particular situations. And, in some months their income might drop to a very insignificant amount. The success of all the businesses depends on their existing market conditions. Even if, they are doing everything right, some days or months might not see any income. A great example to understand this would be a holiday resort. During the holiday season, it might remain over-booked. While in a non-holiday season, weeks can go without any customer. As such, lending to self-employed people involves a higher risk for the lender. However, certain professionals such as Chartered Accountants, Doctors, Engineers, Company Secretaries, and Architects and ICWAI graduates are offered a special loan. All the top lenders consider these as low-risk profiles. Personal Loan for Unemployed The lenders offer personal loan to an applicant only when they are sure of their repayment capability. As such, an unemployed individual has no chance to avail an unsecured loan. But unsecured loans are not the only types of personal loans available. Apart from personal loans, there are multiple options to borrow money. Some of these are: All these are types of secured personal loans. And the borrower is free to use the loan amount for any purpose. Since these are secured personal loans, the collateral is at risk, should the borrower fail to repay. In such cases, the lender is legally allowed to sell or auction the collateral to recover their money. Hence, these should opt only when the need is genuine and worthy of the collateral risk. Personal Loan vs. Credit Loan Personal Loan vs. Line of Credit Personal Loan vs. Gold Loan Tax Benefits on Personal Loan Apart from the several benefits mentioned above, there are tax benefits too associated with it which many of us do not know. If you can prove that the loan amount has been used for the valid expense (regardless of the source of the loan), then you can use such personal loans for tax savings. You can even claim the tax deduction on the paid interest of the loan. There are many lenders available in the market, that are authentic and they provide an easy process to follow for the personal loan along with instant approval features. You can claim the tax benefits on the personal loan in certain cases: If you have availed the personal loan for your house, then the proper arrangement for the same can create the wonders in terms of tax deductions. According to Income tax act, section 24(b), the same provides the great relief to the house buyers and provide them tax deductions on the loans, if they have availed a loan to buy a residential property or for the renovation of such properties. If you have used a personal loan amount for the down payment to buy a house, then you can opt for tax exemption. At the same time, if the amount is used for renovation, home repairs, or reconstruction, then all these expenses will fall under valid expenses for the tax deduction purpose. To claim the tax deduction, you will need all the documents as proof that the loan amount has been used for the house. You need to preserve all the bills related to repairs, reconstructions, repairs, labors, etc. to claim the tax deductions. If you have availed the personal loan for higher education, it also can be helpful while calculating the income tax. You can avail of the tax deduction on the interest paid by you. If the same has been availed for your child or partner’s education, then you will not be able to take the advantages. Now a day, people chose to avail the personal loans for the business purpose as well because it is easily available. One can get a quick disbursal of the loan amount. But, one should not forget that here the interest paid, will be considered as a business expense. Hence, the same shall result in a lower taxable income. If used appropriately, this loan can become your tax-saving tool just like it is the tool to meet your urgent, unexpected financial needs. However, one needs to know how to use the same properly. However, one needs to know how to use the same properly. How to claim Income tax Exemptions on a Personal Loan ? The Indian Income Tax Act allows tax deductions on personal loans for specific purposes, such as education, purchase, or renovation of your house and business expansion. When the money borrowed through a personal loan is invested in a business, the interest paid towards the repayment of the personal loan can be claimed for the tax deduction. When the money borrowed through a personal loan is used to purchase, construct, or renovate a house or property the interest paid for the same against the loan can be claimed for tax taxable. This deduction is possible under section 24. The maximum amount which can be claimed for deduction under this ₹200,000. In case one uses the loan amount for buying an asset, one does not become eligible to claim a tax deduction immediately, but at the time of sale of that asset. If one has used the personal loan to buy assets, the interest paid on the loan will sum up as the cost of acquisition of that particular asset. The amount for tax deducted will be added to the cost of acquisition of the asset. And it will be available at the time you sell that asset. ill be added to the cost of acquisition of the asset. Personal Loan Settlement Settling of a loan is also known as loan settlement, credit settlement, or debt negotiation. This is done when the borrower is not able to repay the loan to the lender. This process is to reduce the debt so that it could be easy for the borrower to repay the outstanding amount. In this, the borrower has to pay more than the outstanding principal amount and less than the outstanding amount including the interest. This makes the repaying somewhat easier for the borrower. For the process of debt settlement, the borrower at first had to negotiate and convince the lender to reduce the total outstanding payable amount. Debt settlement is only possible when the lender grants permission and gets ready to accept a particular amount which is less than the total payable outstanding amount. In most cases, debt settlement is done in case of unsecured loan and the reason behind this is they don’t have any option to recover from the guarantor or recover the outstanding amount by selling the collateral (mortgage) property. Hence the only thing they can do is do a settlement or take some legal action. Is a personal Loan transfer Possible? Popular Misconceptions about Personal loans Though the personal loan is one of the most popular loan products in the market, people are still not very clear about it and there are several myths regarding the personal loan. Many people believe that personal loans take a long time to process and approve a loan application. But this isn’t true anyway. Personal loans are the quickest loan available in the market, which even comes with the pre-approved facility and with minimal documentation. The processing of this loan is faster than any other loan. With some of the lenders, it takes only a few hours to disburse a personal loan. CIBIL is one of the most important eligibility criteria, common among all the lenders. It represents your financial history, your borrowings, and your repayments made. CIBIL is always an evaluating factor. But it is a myth that a personal loan application with low CIBIL always gets rejected. A personal loan application with low CIBIL may get approved when your income and repayment capacity is high. As income and repayment, capacity is also an important eligibility deciding factor. It’s a misconception among the people that a personal loan always comes with a high-interest rate. It is true that the interest rate of a personal loan starts from 10.89% per annum and can go up to 22 or 24% per annum. But when an applicant has a good income, high repayment capacity, and a good CIBIL Score then a personal loan can be approved at the minimum interest rate possible. It is also a myth that a personal loan does not offer a prepayment option. A personal loan does come with a prepayment option. One just needs to check for this option while selecting their lender. It is a misconception among the people that a personal loan is offered only by banks. People think so because a personal loan is an unsecured loan and due to the risk factor involved to the lender, people assume that it is only the banks, who can bear such risks. Whereas the truth is it is not only the banks who offer a personal loan, it is the NBFCs and many DSAs as well who are into the business of offering personal loans. It is a myth that there is no tax benefit possible on a personal loan. Tax benefits can be easily availed on a personal loan when one plans it properly. Advantages and Disadvantages Advantages of Personal Loan Disadvantages of Personal Loan Do’s & Don’ts of Personal Loan Do’s Don’t Effect of Personal Loan on Credit Score When you avail of a personal loan with a registered financial institution, such as a bank or NBFC, they report your loan repayment track to the credit rating institutions.While all such lenders definitely report to CIBIL Transunion, a majority of them report to Equifax and Experian as well.The credit score of any individual depends on the overall management of the debt(s).As such, how good or how bad you are with your loan repayment, will affect your overall credit report. Loans are good only when the need for them is justified. Along with the desire and capacity to repay them properly. And, when the bad times are over or tenure is over, they should be closed.Multiple loans, revolving credits, missed EMIs, all of these affect credit score negatively. And, bring them down significantly.This affects the eligibility of an individual to borrow more in the future. If one had borrowed for the purpose that was not important, with a bad credit report, he would not be able to borrow in the near future. Even if there is a genuine need.As such, one needs to be very careful with their loan repayments, once they have it. And, avoid it at all if there is no important need. Process of Closing a personal Loan How to close a Personal Loan? One can either regularly repay the loan close a personal loan by repaying it till the completion of the entire tenure or one can prepay the loan to reduce your debt burden. What do you need to close a personal loan? The first and the most important thing which you need to close a personal loan is your Personal loan account number. This can be found easily on the loan account statement. One can also get it by using the Netbanking facility, if available. ID proof is a must thing required to close a personal loan. One can use a PAN card, Aadhaar card, Voter Id card, or any other government-issued identity document to show it as an identity proof. Other loan-related documents include a loan approval letter, loan account statement, and other documents issued by the lender. In regular closure of a personal loan, a personal loan borrower makes regular payments and pays off the loan in the same tenure period as mentioned in the loan agreement. There are no charges imposed with a regular closure of a personal loan. You just need to pay the installments. Step 1: Speak to your lender (bank / NBFC) and inform them about the closure of your loan. This is needed to be done once you pay the last installment of your loan. Step 2: Carry the required documents with you. The documents for ID proof, a cheque with the final payment (if any), and the loan account number and any other loan-related documents issued at the time of loan approval. All these are required, as the bank will verify the documents before further proceeding for the closure of your personal loan. Step 3: Get a NOC (No Objection Certificate). A NOC will be issued by your lender against the borrower after the procedure is completed. This certificate state that the borrower has repaid the complete loan and does not have any dues. A loan is said to be pre-closed when you repay the loan before the loan tenure ends or when you repay the loan in a shorter time which is mentioned on the loan agreement. A pre-closure of a personal loan can save a lot on interest costs when done at the right time. However, different banks have different lock-in periods before which you cannot close the loan. Moreover, there are certain charges imposed by certain banks on the pre-closure of a personal loan known as pre-closure charges. It depends on the banks’ policies where they will charge for a pre-closure or not. Generally, the charges vary from bank to bank and it depends on the outstanding amount too. Your personal loan account will close once the money is received by the bank. And shortly the bank will dispatch the loan closing papers to you.
Feature Personal Loan Credit Card Loan Amount ₹50,000 – ₹5,000,000 Depends on Income Interest Rates 10.5% – 36%
12% – 24% Collateral Required None None Interest Calculation
On Principal Amount On Outstanding Amount Repayment Fixed EMIs Flexible EMIs
Feature Personal Loan Line of Credit Loan Amount ₹50,000 – ₹5,000,000 ₹5,000 – ₹500,000 Processing Time 3-5 Days 2 Hours – 1 Day Collateral Required None None Interest Calculation On Principal Amount On Outstanding Amount Repayment Fixed EMIs Flexible EMIs
Feature Personal Loan Gold Loan Loan Amount ₹50,000 – ₹5,000,000 Depends on the Value of Gold Processing Time 3-5 Days
Immediate Collateral Required None Yes, Gold Interest Calculation On Principal Amount On Principal Amount Repayment Fixed EMIs Fixed EMIs Regular Closure
Charges for Regular Closure
Step to follow for a Regular Closure
Personal Loan Prepayment
Charges on prepayment of a Personal Loan
Additional documents required in case of pre-closure
Steps to pre-close a Personal Loan
Best Personal Loans from 10 Banks / NBFCs (updated 22 Aug 2020)
| Bank/NBFC | Interest Rate | Min. Loan Amount | Max. Loan Amount | Min. Tenure | Max. Tenure | Processing Fees |
|---|---|---|---|---|---|---|
| HDFC Bank | 15.5% – 21.5% | 100000 | 2500000 | 12 | 60 | Up to 2.50% + GST as applicable |
| ICICI Bank | 11.25% – 22% | 50000 | 2000000 | 12 | 60 | Up to 2.50% + GST as applicable |
| Axis Bank | 15.75% – 24% | 50000 | 1500000 | 12 | 60 | 1.50% to 2.00% + GST as applicable |
| Kotak Mahindra Bank | 10.99% – 24% | 50000 | 1500000 | 12 | 60 | Upto 2.5% + GST as applicable |
| Citi Bank | 17.99% – 18.99% | 25000 | 3000000 | 6 | 60 | 2.00% – 3.00% + GST as applicable |
| Bajaj Finsery | 12.99% – 24% | 50000 | 2500000 | 12 | 60 | Up to 3.99% + GST as applicable |
| Standard Chartered | 10.5% – 19% | 1000000 | 3000000 | 12 | 60 | Up to 3% + GST as applicable |
| IndusInd Bank | 11.25% – 30% | 50000 | 1500000 | 12 | 60 | Up to 2.5% + GST as applicable |
| TATA Capital | 11.25% – 19% | 75000 | 2500000 | 12 | 72 | 1.50% to 2.00% + GST as applicable |
| Capital First | 12% – 18% | 100000 | 2500000 | 12 | 60 | 1.99% + GST as applicable |
Personal Loan Eligibility Criteria for Salaried Employee
. Eligibility Criteria Salaried Employees Eligible Age (Min-Max) The applicant’s age should be minimum of 25 years and a maximum of 60 years at the time of applying for a personal loan if the applicant is a salaried employee. Eligible Income Salaried applicants should have a minimum monthly income of ₹25,000 per month in a metro city, and a minimum monthly income of ₹20,000 in other cities. Minimum Loan Amount The salaried applicants can avail a personal loan starting from ₹50,000, based on their eligibility. Maximum Loan Amount The salaried applicants can avail a personal loan up to ₹50 Lakhs, based on their eligibility. Eligible City 180 Cities across India. Co-applicant Not required. Employment The salaried employees should have a minimum of 2 years of total work-experience, and at least 6 months in the current company. CIBIL Required (750-900)
Personal Loan Eligibility Criteria for Self Employee
Eligibility Criteria Self Employees Eligible Age (Min-Max)
The applicant’s age should be minimum 25 years and maximum 60 years at the time of applying for a personal loan if the applicant is a salaried employee. Eligible Income
Salaried applicants should have a minimum monthly income of ₹25,000 per month in a metro city, and a minimum monthly income of ₹20,000 in other cities. Minimum Loan Amount
The salaried applicants can avail a personal loan starting from ₹50,000, based on their eligibility.
Maximum Loan Amount
The salaried applicants can avail a personal loan up to ₹50 Lakhs, based on their eligibility. Eligible City 180 Cities across India. Co-applicant Not required. Employment The salaried employees should have a minimum of 2 years of total work-experience, and at least 6 months in the current company. CIBIL Required (750-900)
HDFC Personal Eligibility Criteria HDFC Bank offers its personal loans at an interest rate of 15.50% – 21.50% and the loan processing charge is up to 2.50% of the loan amount as applicable or it can be a minimum of ₹1000 to a maximum of ₹25,000 depending on your loan amount. HDFC Bank does not allow prepayment until 12 EMIs have been repaid. Be careful about the timely repayments for HDFC’s personal loan as the bank charges 24% per annum on the outstanding amount of loan for late payments. It has fast approval processes with minimal and easy documentation. Below is the list of HDFC personal loan eligibility criteria: Eligibility Criteria: ICICI Bank Personal Loan Eligibility ICICI is the largest private sector bank in India. ICICI offers you a wide range of banking products and it best at providing financial services like home loans, personal loans, business loans, etc. You can avail of a personal loan from ICICI for different purposes such as for holidays, education, for your home renovation, for wedding expenditures, and even for buying gadgets and all. ICICI offers you attractive interest rates for your personal loan which vary from 11.25% to 22.00% and disbursal within 72 hours. The processing fees you will charge for your personal loan with ICICI is 1.25% of your loan amount. ICICI offers you flexible payment options from 12 to 60 months. The loan amount can vary from ₹50,000 to ₹2,000,000. The other advantage with ICICI Personal Loan is that no security or guarantor is required. Below is the list of ICICI Bank Personal Loan eligibility criteria: Eligibility Criteria: Axis Bank Personal Loan Eligibility Below is the Axis Bank Personal Loan eligibility criteria: Eligibility Criteria: CitiBank Personal Loan Eligibility Citibank Personal Loan services are considered as one of the approachable and the most inexpensive ones existing in the service market. Citibank Personal Loan can be made use to meet financial requirements like medical expenses, education expenses, travel expenses, home renovation expenses, wedding costs, or even for a vacation. Citibank offers personal loans at low-interest rates for any online applications. All relevant documentation requirements are nominal, and no-collateral is required. The top-up option is made available with all Citibank Personal Loans according to your eligibility. Below is the list of Citibank Personal Loan eligibility criteria: Eligibility Criteria: Capital First Personal Loan Eligibility Capital First is one of the best people’s financial companies to offer personal loans for various needs. This financial company has a record of consistent growth and profitability. Through Capital First, you can avail loan amount up to ₹1,000,000, it offers flexible repayment options up to 60 months, easy repay in EMIs is available. This company offers the lowest interest rates as compared to many big banks and lenders. CIBIL score of just 700 is required while others need at least 750. They offer speedy loan approval, credit shield, and hassle-free personal loan processing. Below is the list of Capital First Personal Loan eligibility criteria: Eligibility Criteria: Bajaj Finserv Personal Loan Eligibility Bajaj Finserv Personal Loan can help you meet all your temporary cash crunch, be it for a holiday trip abroad, or buy your favorite gadget, or anything else. Bajaj Finserv offers one of the best personal loans with the lowest interest rates starting from 11.99%, and high loan amounts starting from ₹50,000. Below is the list of Bajaj Finserv personal loan eligibility criteria: Eligibility Criteria: Induslnd Bank Personal Loan Eligibility IndusInd Bank is one of the best banks for personal loans. IndusInd Bank offers a competitive interest rate along with maximum loan amount approval: Indusind Bank also provides an attractive interest rate on each Personal loan. The bank has simple, easy, and hassle-free documentation, with effortless and trouble-free documentation, the personal loan staffs of this bank are very customer friendly. The applicant can avail door-door service and make the most use of the convenience. A balance Transfer option at a lower rate is offered to each applicant in case of any existing amount of loan. Below is the list of IndusInd Bank personal loan eligibility criteria: Eligibility Criteria: Kotak Mahindra Personal Loan Eligibility Kotak Mahindra Bank is the Indian bank and financial service firm that was established in the early 1900s. Below is the list of Kotak Mahindra Bank personal loan eligibility criteria: Eligibility Criteria: Standard Chartered Personal Loan Eligibility Standard Chartered Bank offers a wide variety of personal loans for both Salaried and Self Employed individuals at competitive interest rates without the need for any security/collaterals. Standard Chartered Personal Loan has simple documentation and quick processing. The personal loan repayment options vary from ECS, Account Debits, and PDCs. Below is the list of Standard Chartered Bank personal loan eligibility criteria: Eligibility Criteria: TATA Capital Personal Loan Eligibility Tata Capital is a very trusted name and also a leader amongst the NBFCs in India. Tata Capital offers custom solutions for personal loans, keeping in view the customer needs, at attractive interest rates. Tata Capital has a dedicated credit management team and caters to all segments of salaried employees as well as self-employed individuals. Tata Capital Personal Loan is designed to meet everyone’s credit needs, which vary from individual to individual. One can avail of Tata Capital Personal Loan for the flexibility it offers to suit the needs and financial conditions of people belonging to all walks of life and employment. Below is the list of Tata Capital personal loan eligibility criteria: Eligibility Criteria: Factors that Decide Personal Loan Eligibility Personal Loans are unsecured loans, which means the lenders do not ask for any kind of asset, whether movable or immovable, as collateral. The decision of disbursing a personal loan to the applicant is hence dependent on other factors, which determine whether the applicant would be able to repay the loan on time or not. Since there is no collateral involved, hence the lender is at higher risk, just in case someone runs off with the loan, or declares the inability to repay at any point during the tenor of the loan. Hence the lender has to be double sure about the repayment capability of the applicant before they approve and disburse the requested personal loan. Lenders look for many criteria before sanctioning a personal loan to any applicant. Few never missed factors are here. The younger you are more is the probability of you getting a personal loan as you have many earning years ahead to repay your loan. The general guideline followed by most banks for a personal loan for salaried employees is they must be between 21 to 60 years aged. However, for self-employed, it is between 25 to 65 years. This is a very crucial aspect of personal loan consideration. Unless you are salaried and employed for more than 2 years in the current profession or if self-employed minimum 5 years of total tenure of earnings, you will not be considered as eligible. However, this is discretionary and depends on your current company and your annual compensation, if you happen to be employed with a top-notch company where you seem to have a stable and promising career ahead. Apart from your company’s performance, the individual credit rating holds a lot of value. Having a good credit rating increases the probability of getting a loan with a more flexible option on tenure, amount, EMI, and interest rates. In case of any default payment records, huge outstanding loan, fraudulent track records, the banks have every right to cancel the personal loan application or charge a higher interest rate, to lower their risk. It’s not always about the present, the past financial records will also have a great call on deciding whether you are eligible for a personal loan or not. Having good financial records is the key, will eradicate rating issues and will increase the total amount of eligibility. Just in case if you had been irregular with your payments with default(s) or been marked as NPA, any lender will refrain from approving the loan as these will indicate that you are not creditworthy. The employer with whom the applicant is working with is the best way to gauge the credibility of the applicant. Being a part of reputed and high turnover companies is an asset when it comes to applying for a personal loan, as their employee’s growth is promising. Quick Tips for Successful Approval of Personal Loan Eligibility Researching before you apply for a personal loan is very important as there are many lenders at different rates. One can research rates, tenure, and the other charges involved which can affect your total cost of borrowing. To research this, visit websites of different lenders and compare them. Or, just simply use the application form above to know your best offer. Before you apply, it is very important to check your credit history. This will give you the idea that is it the right time to apply for a loan or not. A loan application with less CIBIL Score has more chances to get rejected than with a good CIBIL Score. Your CIBIL also gives you an idea about the loan amount that you can receive as the loan amount. Every lender has their own set of eligibility criteria, and the income of the borrower is such criteria. To get approved you should beware of the minimum income required by the lender. Suppose you apply with a lender who needs a minimum income of ₹25,000, and you apply with a monthly income is ₹20,000. In this case, you may have to face a loan rejection. Hence, check for the income criteria and apply only if are able to meet them. Employment stability is yet another important factor that decides your eligibility. Your employment stability is directly related to your loan repayment capacity. Lenders generally approve those personal loan applications where borrowers have stable employment. Generally, an applicant with stable employment of a minimum of two years is more likely to be approved than an applicant with unstable employment. 10 Tips for a Hassle-Free Application 1.Your Current Age should be in the Eligible Range It is a fact that the younger you are the more is your earning capacity and hence, to make a personal loan application a hassle-free process the applicant’s age should be between 23 to 60 years. 2.Having a Savings Account with the Bank Having a savings account with the bank with whom you are applying for your personal loan can make your loan process a hassle-free one. It provides lenders with a kind of assistance where they can see all the credits and debits in your account. Moreover, a bank account with the same bank is the most essential for a pre-approved personal loan. The reason behind this is- for a pre-approved loan no documentation is required and money is credited in minutes. For this process, the information used is from the documents submitted at the time of opening the account. Hence, it is very important to have a bank account with the same lender if you want a pre-approved loan offer. 3.Having a Past Credit History Credit history is something that a lender also checks for before approving any loan. Your credit history includes all your previous and current borrowing and the repayments done against them. Lenders generally look for this to minimize their risk factors as they are never willing to lend a person who has previously defaulted for any of his loans. Having a clean past credit history always turns a personal loan application to a hassle-free process. 4.Having Higher Repayment Capacity No lender wants to take a risk for the repayment of their lent amount. Hence, to minimize this risk and to be safe a lender always looks for a borrower who has low existing EMIs. Lenders also check or the Income to Debt ratio for this. Generally, an applicant should have a maximum of 40% of his income as a total contribution towards all his debts. 5.Stable Employment with a Registered Company Stability in the employment or job assures the lenders that the applicant is having a permanent job and hence he/she can repay the loan easily. Employment is a registered company that also assures a timely salary and hence a timely repayment towards the loan. 6.Salary more than the Required Minimum Income If the applicant’s salary is exactly as much as the minimum required income, it provides a point for the lenders to rethink, as the applicant is already at the lower borderline and if they are able to find a single or small point against him like low CIBIL or income to debt ratio they will reject the loan application. Hence an applicant having more salary than the required minimum income makes a fast approval of the loan. 7.Having a Proper Place of Residence A proper place of residence symbolizes the stability of the borrower. If an applicant is living in a shared flat or PG accommodation it gives an impression to the lenders that in the case of a loan default or borrower turning NPA, it would be almost impossible to trace back the borrower, as PG owners in contrast to apartment owners, generally don’t ask for an address or identity proof. 8.Proper Income Declaration and Tax Payment A lender always looks for the salary slip of an applicant if he/she is an employed person otherwise if the applicant is a self- employed IT return forms and tax payment documents are a must which lenders look for. These documents provide a proper income declaration of an applicant and make the personal loan application a hassle-free process. 9.Complete Documentation with the Loan Application Documents are the most important thing to avail any loan. Documents provide all the information about the applicant as his original name, address, and income. Without proper documentation, it is impossible to avail any loan. However, personal loan documentation is minimal and online but still, it should be proper and accurate. 10.Only Genuine Information in the Loan Application Providing all the information genuine in the loan application makes the process go easily without any obstacle as the applicant doesn’t need to verify the documents again and again if it is provided is correct in the first attempt. This reduces the time taken in the process and makes the process hassle-free. Top Reasons for Rejection of Personal Loan Application Personal Loan application being rejected can increase your woes, especially when your requirement is urgent. And to make it worse, most of the financial institutions don’t even disclose the reason(s) for the rejection. The personal loan application can be declined for multiple reasons depending on the different eligibility criteria each institution has. Every lender will look for certain factors like age, income, debt to income ratio, credit rating, employer, and job stability. The applicant needs to satisfy every criterion that the lender is looking for, to appear as a creditworthy borrower and get approved for the loan. However, there can be some relaxation in some criteria, if the applicant seems worthy, but approval/disapproval is at the discretion of the loan officer and cannot be argued. Here are some of the factors because of which a personal loan application can get rejected. How To Improve Personal Loan Eligibility After Getting Declined ? It is also essential to keep in mind; every bank branch manager has discretionary power to decide eligibility despite any eligibility criteria.Applicant’s Age
Employment Stability
Credit Rating
Financial Situation
Employer
Proper Research before Applying
Checking Credit History & Score
Required Minimum Income
Employment Stability
Checklist of Documents required for a Personal Laon These are the documents required to avail a personal loan.
Photo Identity Proof (any one) Voter ID Card / Passport / PAN Card / Driving License / Aadhaar Card. Residence Address Proof (any one) Ration Card / Passport / Utility Bill.
Income Proof Last 3 months Payslip & Bank Statement of last 3 months.
Job Continuity Proof Job Offer Letter / Letter from the HRD (if current employment less than 2 years).
Financial Documents a. Salaried Individuals: Latest 3 month’s Salary Slips and Form 16, Bank Statements of 6 months.
b. Self Employed Individuals: Latest 1 year bank statement for both savings and current account. Photo 1 passport size color photograph Application Form Personal Loan Application Form duly filled.
Personal Loan Document Required To avail a personal loan, an applicant needs to provide certain documents, either printed or in digital format, to the lender. The lender will ask for the documents to verify the following about the applicant: Documents Required for Salaried Individuals Any individual who is employed by an institution and receives compensation in monthly salaries is an employee. Lenders require the following set of personal loan documents from salaried individuals. Documents Required for Self-Employed Professionals Self-employed professional and non-professional applicants need to provide the following documents for a personal loan. Why are these Documents Required for Personal Loans One of the options to get money from reputed banks for all needs is through a personal loan. And, to apply successfully for a personal loan an applicant needs to provide a certain set of documents. These documents help lender (be it a bank or an NBFC) to know and understand the financial stability of the borrower and analyze the credit risk. Apart from that, it helps a lender know and verify all the details about the applicant such as age, income, address, employer, and employment. It is based on this a lender decides whether to lend or not to the applicant. As personal loans are unsecured loans, the lender does not take anything as collateral for the lending amount, hence there is always a potential risk of the borrower defaulting or absconding on the loan. Hence to be double-triple sure a lender asks for a certain set of documents so that it can learn and analyze the applicant and then decide. The documents required for personal loan help a lender to know and understand the following about the applicant: Once a lender has these details, they can know and understand the applicant better. And, using the information provided, they can come up with the best loan offer for the applicant.
What is a personal loan? Ans: A personal loan is a type of unsecured loan that you can borrow from a bank or financial institution if you require funds to pay for your financial needs.
How does a personal loan work? Ans: You borrow a loan when you require credit. Once you submit your loan application to a lender for a personal loan, the lender verifies and approves it. Post this; the loan amount is disbursed into your bank account. Once you receive the loan amount, you will need to repay the lender via EMIs over the course of the loan repayment tenure.
How does my credit score impact the calculation of my loan amount? Ans: A credit score or rating is a number that indicates the likelihood of you paying your bills on time. It is important because your score determines whether you qualify for loans, credit cards, and other credit facilities.
What is the maximum amount of loan I can get? Ans: The maximum amount of loan depends on your monthly income. In India, some lenders offer up to Rs.40 lakh.
What is a prepayment and how does it help in repaying my loan? Ans: If you happen to get some extra money, you can pay it towards your loan even before the EMIs are due. This is called a prepayment. Every prepayment you make goes towards reducing the outstanding principal component of your loan. And since the principal reduces, your interest cost will also reduce. Also, your tenure gets shortened this way, helping you pay off the loan ahead of time.
How much loan can I get if I earn a monthly salary of Rs.60, 000? Ans: For personal loans, most lenders fix the minimum monthly income requirement between Rs.15, 000, and Rs.25, 000. Thus, if you have a monthly income of Rs.60, 000, you can be fairly certain that you won’t find it difficult to borrow a loan. The exact amount that you will be offered will, however, vary based on your repayment capacity, debt-to-income ratio, the lender’s terms, and conditions, etc.
Can I get a personal loan during Covid-19? Ans: Yes, some of the leading banks in India are offering COVID-19 personal loans. If you wish to apply for a personal loan, you can do so by applying for it online on the bank’s official website. Applying online is recommended since the process is fast and hassle-free and allows you to maintain the social distancing norm lay down by the Government of India. The interest rates offered will vary from bank to bank and hence it is recommended you compare various personal loans and then avail the one which you feel will be suitable for you.
Is the PAN card mandatory when applying for personal loans? Ans: Yes, you are required to have a PAN card.
How much loan can I get if my salary is Rs.25, 000? Ans: With a monthly salary of Rs.25, 000, you are likely to be eligible to borrow a loan. However, the lender will also check if you have any other outstanding loans, your credit score, repayment capacity, etc. before deciding how much you can borrow. You can use a personal loan eligibility calculator tool to know how much you are eligible to borrow with a monthly salary of Rs.25, 000.
Is there an upper age limit for personal loans? Ans: Yes, the upper age limit to apply is 60 years. This may, however, vary from lender to lender.
Is Form 16 required to borrow a personal loan? Ans: Yes, lenders will require you to submit your Form 16.
Is it mandatory to submit my Aadhar card to borrow a personal loan? Ans: Yes, most lenders will require you to submit your Aadhar card.
What is the minimum salary that an individual is required to earn to apply for a personal loan? Ans: The minimum salary requirement will vary from lender to lender. Most lenders, however, will require you to earn at least Rs.15, 000. If you reside in a metropolitan city, you may have to earn between Rs.20, 000 and Rs.25, 000.
Can you get a personal loan if you are retired? Ans: Several banks offer loans for pensioners. Thus, if you are a pensioner, you will be able to borrow a personal loan.
Can I get a personal loan with a credit score below 500? Ans: If your credit score is under 500, there is a good chance that your loan application may be rejected by the lender. Even if your application is approved, you may have to pay a high rate of interest for the loan.
Can I borrow a personal loan to pay for my house deposit? Ans: Yes, you can. Banks and financial institutions that offer loans do not lay down any restrictions on how the loan amount can be used.
How long does it take to get approved for a personal loan? Ans: It may take anywhere between a few seconds to up to 48 hours. If you are a pre-approved customer, your loan amount will be approved very quickly. Else, you may have to wait for up to 48 hours to get approval.
Will borrowing a personal loan affect my credit score? Ans: Once you borrow a loan, your credit score will improve if you pay the required EMIs as per the schedule specified by your lender. On the other hand, your credit score will drop if you miss EMI payments.
Is borrowing a personal loan better than using a credit card? Ans: Personal loans are a good option if you need funds for a large expense or wish to consolidate multiple debts. The key benefit of a personal loan is that you can pay monthly installments to repay your borrowed loan amount. Further, you can also choose repayment tenure between 1 year and 5 years to suit your repayment ability. Credit cards, on the other hand, are a good choice if you want to finance smaller expenses, provided that you can repay your balance in full at the end of every month.
Is it smart to consolidate my debts with a personal loan? Ans: Yes, if you have multiple outstanding debts, it is best to avail of a loan and consolidate your debts. Doing this will make repayments a whole lot easier and help you clear off your consolidated loan amount in affordable installments?
What is the best reason to give when applying for a personal loan? Ans: Most lenders will not require you to provide a reason when applying for a loan.
How long do I have to be employed to get a personal loan? Ans: Most lenders will require you to have a work experience of at least 2 years. This condition, however, varies from lender to lender.
Can I use a personal loan to purchase a car? Ans: Yes, you can use a loan to purchase a car. That said, if the sole purpose of the loan is to purchase a car, it is highly recommended that you avail a car loan since it is likely that you will be offered a lower rate of interest.
How will I know if my personal loan has been approved? Ans: You can track the status of your loan application through online/offline channels using your application or reference number which you will get post-application. Also, the lender will let you know if your application has been approved.
How can I access the funds that I receive through my personal loan? Ans: Most lenders disburse the personal loan amount into your savings bank account.
How do I get a top-up on my personal loan if I require more funds? Ans: Keep in mind that not all lenders offer top-up personal loans. However, if the lender does offer top-up loans, you can apply for the same through online or offline channels.
Will I get a personal loan account statement detailing my payments and outstanding balance? Ans: You can log into your lender’s customer portal to view your loan account statement.
What should I do if I want to repay my loan (partially or in full) during the loan repayment term? Ans: Most lenders will allow you to make pre-payments or pre-close your loan during the loan repayment term. You will, however, have to pay a nominal charge to the lender for doing the same. Keep in mind that most lenders will only allow you to prepay or pre-close your loan after 1 year of borrowing the loan. If you want to prepay/pre-close your loan, ensure that you inform your lender of the same.
Do personal loans offer tax exemptions? Ans: Personal loans only offer tax exemptions if you are using the loan amount for the renovation of your house, to pay for educational expenses, or to expand your business.
What is the impact of GST on personal loans? Ans: Before the implementation of the Goods and Services Tax (GST), a service charge of 15% applied to personal loans. Post the introduction of the GST in July 2017, a service tax of 18% applies to personal loans. Thus, there is a 3% increase in the payable service tax. The service tax, however, is only levied on the processing fee, prepayment charges, etc., and not on EMI payments.
Can I get a personal loan without submitting my salary slips? Ans: If you are a salaried employee looking to borrow a personal loan, you should submit your salary slips as proof of employment and income. Lenders will not process your application unless you submit the required documents.
How do I cancel my personal loan after the loan is disbursed? Ans: You can cancel your loan application before the loan amount is disbursed into your account by submitting a written application for the same. You will also need to pay the loan cancellation fee to the lender. Once the loan amount has been disbursed into your account, most lenders will not allow you to cancel it. You can, however, pre-close the loan. If you are thinking of canceling your loan because you pay a high-interest rate on your loan, you can consider transferring your outstanding loan balance to another bank or financial institution.
Since a longer tenure means lower EMIs, should I always choose a longer tenure? Ans: No, not necessarily. This depends on your ability to repay the loan. In other words, how much you can afford to repay every month. If you’re able to afford only a smaller amount each month, choose a longer tenure. But remember that this will result in you paying more interest over the longer duration. Also, it will keep you indebted to the lender for a longer time.
How can I repay my personal loan? Ans: There are several ways by which you can repay your loan. These include: How often should I repay my Personal loan? Ans: This depends on the lender you choose. Normally, every personal loan repayment is calculated based on a monthly repayment pattern. It includes the principal and interest components that you’re expected to repay each month. How can I avoid defaulting on my personal loan repayments? Ans: The measures given below can help you pay your loan installments on time: What will happen if I default on my loan repayment when I have offered collateral? Ans: Personal loans are usually unsecured loans. Sometimes, if you don’t fulfill the loan criteria, you may be able to get a loan by offering collateral. In such cases, you have to be extra careful about repaying the loan on time. If you default on your repayment, the lender may take possession of your collateral to cover their losses. Defaulting in such circumstances could make you lose your collateral. If I have a guarantor, what will happen if I default on my EMIs? Ans: A guarantor is someone who guarantees repayment on your behalf. So, if you’re unable to repay the loan as and when the installments are due, your guarantor will be asked to pay. If I have a co-applicant, what will happen if I don’t repay my loan on time? Ans: All co-applicants for a loan are equally responsible for repaying the loan. If one applicant is unable to repay the loan, the remaining applicants are expected to do so. So, if you’re not able to pay the EMIs on time, your co-applicant is expected to pay. If your co-applicant also fails to pay the installments on time, it will result in a repayment default. Are there any charges for prepaying my personal loan? Ans: Some lenders may ask you to pay a fee if you want to prepay a part of your loan. Others may either waive the fee or may not have prepayment charges at all. Can I offer collateral and get a loan if I have bad credit? Ans: Yes, you can. This is another way to get a personal loan even if your credit rating is bad. Some lenders may offer you a loan if you’re willing to offer them something as collateral. But keep in mind that the lender has every right to possess your collateral if you don’t repay the loan as promised. Will I be able to get a loan along with a co-applicant if I have bad credit? Ans: Yes, applying for a loan along with a co-applicant who has good credit can help you get a loan even if you have bad credit. The scores of both applicants are considered when processing a joint-loan application. This way, the good credit of your co-applicant will help balance out your poor credit. But, remember that your co-applicant will be held responsible for repaying the loan if you are unable to do so. What credit rating should I have to get a loan? Ans: A score of 700 and above is considered to be good. This should be enough to get you a loan without any hassles. But, a score of 800 or more will get you into the good books of lenders. This could get you better interest rates and repayment options. What does the process of applying for a personal loan include? Ans: The process of applying for a personal loan includes the following steps: What do I need to apply for a personal loan? Ans: To apply for a loan, you need to make sure that you are first eligible for it. Don’t apply for a loan for which you aren’t eligible. This can hurt your credit score. Apart from checking your eligibility, you also need to make sure that you have all the necessary documents in hand before applying. What will happen if I don’t have one or two of the required documents? Ans: Lenders usually require you to have all the required documents in order before you apply for a Personal Loan. However, if you don’t have one or more of these, you can talk to the lender and find out if there is an alternative solution. If these are vital documents, your loan will not be sanctioned till you give them. When will a bank reject my personal loan application? Ans: A bank can reject your personal loan application if you apply for a loan for which you are not eligible. It can also reject your application if you fail to submit the documents it requires. Is part-prepayment allowed on my personal loan? Ans: Personal loans can be prepaid in parts or as a whole at any stage. Some banks may charge a prepayment penalty for the same. Some banks do not allow part-prepayment. So, check all the documents before finalizing the loan with the bank. Will I need a guarantor to take a personal loan? Ans: No, you will not need a guarantor. Can I club my income with my spouse to take a personal loan? Ans: Yes, you can club the income of your spouse to boost your eligibility to avail a personal loan. How will I be eligible for a relationship to discount? Ans: If you have been a customer for a particular bank for a while, then the bank might reduce the personal loan interest rate or other such charges. Some banks will also provide you additional services. Do I need to open a bank account to service my personal loan? Ans: If you do not have an account with the bank, it is not mandatory to apply for one. But, if you apply for a loan with your existing banker, then you will be eligible for a relationship discount. How do I stop executives from calling me to let me know about other loans? Ans: Some banks let you register yourself for ‘Do Not Disturb’. If you opt for this, the executives will not disturb you with cold sales calls. What is the best way to apply for Personal Loan? Ans: The best way to apply for a personal loan is by using the online loan application tool at Indian loan bazaar.com the tool can be accessed on this page allowing users to choose loans from various banks and NBFCs as per their selection. How to Track Personal Loan Application status? Ans: Indian loan bazaar.com offers its loan applicants an active tracking tool through both email and SMS allowing them to track daily updates of their loan application. Is my Data Safe with Indian loan bazaar.com? Ans: Indian loan bazaar.com is India’s premier financial marketplace and takes utmost care in ensuring that all data is sent in electronic form with a high level of encryption. Indian loan bazaar.com does not share data with any third party other than the financial institution. Is Indian loan bazaar.com Personal Loan Tool Free? Ans: Yes, the Indian loan bazaar.com personal loan calculator tool is free and the portal does not charge any fee for its services from users. How do I obtain a Duplicate Repayment Schedule for my Personal loan account? Ans: You can request the bank for a personal loan duplicate repayment schedule either via your net banking account or by calling the customer care unit or by writing to them via your registered email ID. How can I get my address changed in my Personal loan account? Ans: You can change your address of residence linked to your Personal loan account via your net banking account or by visiting the bank branch. At the bank branch, you will have to fill in the address-change form and submit relevant address proof documents that are authorized or attested by the State or Central Government. Do personal loans affect mortgage? Ans: Not necessarily, but it depends on your current credit score or past repayment record as well as your net monthly income and lender’s discernment if you can repay the loan without any payment lapses. Can you get a mortgage loan if you have a personal loan? Ans: Yes, you can, but it depends on your income and your ability to pay the EMIs of both the home loan and the personal loan. How many personal loans are too many? Ans: Most lenders do not allow a customer to avail of a second personal loan if he/she is still repaying the first personal loan. However, while it is still possible to have multiple personal loans at once, banks take into consideration the debt-to-income ratio of the individual, which will increase the chance of the personal loan being rejected if he/she has existing loans. What is SI (Standing Instructions)? Ans: Standing instructions is instructions given by a bank customer to the bank to make a payment to another bank account or the bank at regular intervals or as a one-time payment – as per the requirement. As per the instructions, the money in the bank account of the customer will be debited and remitted in another account as per the specified time of the customer. How to check personal loan balance? Ans: Bank customers can check their personal loan balance through the repayment schedule that will be issued by the lender. What happens if a personal loan is not paid? Ans: If the borrower fails to pay the EMI, the bank charges a penal interest on the overdue amount. Financial lenders usually charge a penal interest of 2%-3% per month of the overdue amount. Where can I get a personal loan with bad credit and no checking account? Ans: It could be hard to get a traditional personal loan from a bank with a poor credit score and no checking account. However, certain lenders offer types of personal loans such as payday loans for those with a poor credit score. That said, the interest charged will be quite high. Can I pay more than my EMI in a personal loan? Ans: Over your EMI, after a certain period following the disbursement of the loan, you can make a part-payment towards the loan. The part payment will further deduct the outstanding principal amount of the loan. Is it good to top up personal loan? Ans: Opting for a top-up loan is better than availing a fresh personal loan, as the documentation process might not be required, the interest rates will be attractive, and the loan amount will be disbursed quickly. Can a fresher get a personal loan? Ans: Yes, individuals who have just started working can apply for a personal loan offered by certain lenders. Also, some lenders list a minimum of 3 months’ experience and a minimum monthly income of Rs.15, 000 to apply for a personal loan. How is my prepayment fee calculated? Ans: This depends on your lender. Some lenders charge you a fixed fee for each prepayment. Others may charge you a percentage of the amount outstanding or a percentage of the amount prepaid. What is a pre-approved personal loan? Ans: A pre-approved loan is one where the customer can apply for a loan and possibly doesn’t need to submit documents or go through the verification process as he/she shares a healthy relationship with the bank as an existing customer and has a clean repayment record. Do personal loan pre-closures have certain terms and conditions? Ans: Yes, financial lenders have their terms and conditions when it comes to personal loan foreclosures. Usually, financial lenders allow loan pre-closures only after the payment of 12 EMIs and charge a foreclosure charge + GST on the outstanding loan amount. Is it possible to get a personal loan for a self-employed individual with no income proof? Ans: Most banks and financial lenders require income proof as verification before the approval of the loan application. However, for some lenders, the proof of work experience and bank statements of the individual will suffice. What is reducing the rate of interest in a personal loan? Ans: If the borrower has opted for the reducing balance interest rate, then the interest will be as per the outstanding amount. As the loan amount decreases with every EMI, the interest rate will be applied only on the outstanding balance. With the flat interest rate option, the interest will remain the same irrespective of the reducing principal amount. Is the overdraft facility available for salaried individuals? Ans: Yes, it is. A GST rate of 18% will be applicable on banking services and products from 01 July,
Personal Loan for Govt. Employees
Government employees can avail loans from banks such as Oriental Bank of Commerce, HDFC Bank, Axis Bank, and State Bank of India for interest rates starting from as low as 10.6% p.a. While Union Bank of India levies no processing charges, a few others levy 0.5% to 3.99% of the loan amount as processing charges. The maximum loan tenure for personal loans offered to government employees is 72 months.
Comparison of Personal Loans for Government Employees
Some of the personal loan products available for government employees in India are listed as follows:
| Bank | Interest Rate | Max. Loan Amount | Max. Loan Tenure |
|---|---|---|---|
| State Bank of India | 12.50% p.a. onwards (for defense, paramilitary, and coast guard personnel) | Rs.15 lakh | 72 months |
| Axis Bank | 15.75% p.a. | Rs.15 lakh | 60 months |
| Bajaj Finserv | 11.99% | Rs.25 lakh | 60 months |
| HDFC Bank | 11.25% | Rs.40 lakh | 60 months |
| Union Bank | 10.60% onwards | Rs.10 lakh | 60 months (One year prior to retirement) |
| Oriental Bank of Commerce | 11.5% | Rs.10 lakh | 60 months |
| IDBI Bank | 12.9% | Rs.10 lakh | 60 months |
State Bank of India
State Bank of India (SBI) offers a special interest rate for defense personnel in the country, under the Xpress Credit personal loan scheme. The maximum interest rate for defense, paramilitary, and Indian coast guard personnel is restricted to 12.50% p.a. For other applicants, this may be up to 15.40% p.a.
Benefits and key highlights:
- The bank promises fast and easy processing for all applicants.
- It also provides the option of taking a second loan one year after the disbursal of the first loan. Repayments must be done properly to avail of the second loan.
- Pre-payment charges are waived off if the loan is pre-paid from the proceeds received from a new loan availed under the same scheme.
| Bank | Processing Fee | EMI per lakh | Pre-Closure Charges | |
|---|---|---|---|---|
| SBI | 1% + Taxes | Rs.2,250 | 3% on the pre-paid amount | Enquire |
*Service tax or GST may be applicable over the charges given here
Axis Bank
The personal loan product offered by the bank is available for salaried employees working in the government as well as private sectors. The approval process is quite easy for government employees who earn at least Rs.15,000 per month.
Benefits and key highlights:
- The documentation process is minimal, and the bank offers instant approval for all valid requests.
- The bank offers a flexible repayment process with multiple modes of payment.
- Individuals can transfer existing personal loans to Axis Bank.
| Bank | Processing Fee | EMI per lakh | Pre-Closure Charges | |
|---|---|---|---|---|
| Axis | 1.50% to 2% | Rs.2,419 | Nil | Enquire |
*Service tax or GST may be applicable over the charges given here
Bajaj Finserv
Bajaj Finserv offers a special personal loan product specifically for government employees. The interest rates for this product start from as low as 11.99% p.a. The bank allows the borrower to manage the loan and track the repayment schedule online.
Benefits and key highlights:
- It is possible to get approved instantly and get the loan amount within just 24 hours.
- The documentation process is easy, and it can be done online.
- The company offers personal loans without any hidden charges.
| Bank | Processing Fee | EMI per lakh | Pre-Closure Charges | |
|---|---|---|---|---|
| Bajaj Finserv | Up to 3.99% | Rs.2,275 | 4% of the outstanding loan amount | Enquire |
*Service tax or GST may be applicable over the charges given here
HDFC Bank
HDFC Bank offers its personal loan scheme to private limited companies as well as government employees. Applying for a loan with the bank is simple and involves minimal documentation. You can apply for the loan online through the bank’s official website.
Benefits and key highlights:
- Pre-approved loans get approved instantly for HDFC Bank account holders. Non-HDFC Bank account holders can expect loan approval in less than 4 hours.
- The bank offers flexible loan tenures.
- The personal loan interest rate can be lowered by transferring the loan balance to HDFC Bank.
| Bank | Processing Fee | EMI per lakh | Pre-Closure Charges | |
|---|---|---|---|---|
| HDFC | Up to 2.50% | Rs.2,405 | 2% – 4% of the outstanding loan amount | Enquire |
*Service tax or GST may be applicable over the charges mentioned above
Union Bank of India
Union Bank of India offers retail loans to government employees who are in need of immediate funds. The Union Personal loan scheme is offered at two interest rates depending on whether the employer’s undertaking is available or not. If the employer’s undertaking is available, the rate will be the latest 1-year MCLR+2%, whereas if the employer’s undertaking is not available, the rate will be the latest 1-year MCLR+3.5%.
Benefits and key highlights:
- The loan applicant is required to maintain a salary account with the Union Bank of India.
- The employee can either be an applicant or a co-applicant of the loan.
- If the loan is applied for the education of a government employee’s child, the government employee will become the co-applicant.
| Bank | Processing Fee | EMI per lakh | Pre-Closure Charges | |
|---|---|---|---|---|
| Union Bank of India | Nil | Rs.2,154 | 1% on the outstanding liability | Enquire |
*Service tax or GST may be applicable over the charges mentioned above
IDBI Bank
IDBI Bank offers its personal loan scheme to salaried individuals, non-professionals, self-employed professionals, and pensioners. The loan provides a free personal accident insurance cover. Pensioners who apply for a personal loan with the bank will have to provide a third-party guarantee.
Benefits and key highlights:
- IDBI’s personal loan is a multi-purpose loan that can be availed for hospitalization expenses, home renovation, travel, etc.
- Borrowers who have repaid the loan on a timely basis for 12 months will be eligible for a top-up loan facility.
All borrowers will be covered under a personal accident insurance cover for no charges.
| Bank | Processing Fee | EMI per lakh | Pre-Closure Charges | |
|---|---|---|---|---|
| IDBI | 1% of the loan amount | Rs.2,270 | Nil to 2% | Enquire |
*Service tax or GST may be applicable over the charges mentioned above
Oriental Bank of Commerce
Oriental Bank of Commerce offers a personal loan scheme exclusively for confirmed and permanent employees of PSUs, state and central governments, and other government institutions. It is a term loan that allows interested loan applicants to avail loans up to Rs.10 lakh.
Benefits and key highlights:
- A guarantor (preferably a fellow government employee) is required for availing of this loan.
- The documentation and approval processes are very simple for government employees.
- The interest rate offered to government employees is about 1% lower than the interest rate offered to other salaried employees.
| Bank | Processing Fee | EMI per lakh | Pre-Closure Charges | |
|---|---|---|---|---|
| OBC | 0.50% (minimum of Rs.500) | Rs.2,199 | Nil | Enquire |
*Service tax or GST may be applicable over the charges given here
Eligibility Criteria for Government Employees
- Profession:Most banks in the market provide personal loans for all salaried employees. For government employees, the process is much easier. Employees working in any public sector unit (PSU), central and state government departments, and government schools and colleges can avail of these loans.
- Age:Most of the banks in the market require the applicant to be at least 21 years old. At the time of maturity of the loan, the borrower must be less than 60 years of age.
- Income:Banks also have specific income criteria for borrowers. In most cases, borrowers must earn at least Rs.15,000 per month. Some banks provide certain relaxations in this criterion if the loan applicant has an account with the same bank.
- Financial stability:The applicant must not have too many obligations with respect to other loans and liabilities. It is necessary that the take-home salary of the applicant must not be less than 30% of the gross income after paying all loan EMIs if any.
- Job tenure:The employment tenure of the individual is also considered by banks before providing loans. For government employees who are employed in the job for at least one year, there will not be any issue in getting a loan. However, people who have just entered the government service may have to check with the bank about their lending policy.
Documents Required for getting personal loans
- Identity proof
- Address proof
- Proof of employment
- Salary slips (for at least 6 months)
- Bank statement (for at least 12 months)
- Signature proof verification
Things to consider before taking Personal Loans
- You need to check out the interest rates from multiple lendersbefore narrowing down on a particular loan product.
- Government employees who have their salary account with the lending bank can avail additional discounts on their loans. You may check with your bank regarding the offers available for you.
- Pre-approved loans are offered only to customers of a bank. These loans are approved instantly, and they are disbursed within a few hours. If you need the loan urgently, you may check for the availability of pre-approved loans.
- The charges imposed on personal loans vary from one bank to another. In addition to the interest rate, you must also focus on these charges to minimize the cost of getting a loan.
- Before you choose the loan tenure, you need to check whether the EMI amount fits your monthly budget. If the EMI is too high, you may have trouble repaying the loan on time. Plan your budget and choose the loan tenure accordingly.
How to Apply?
- Visit the official website of the lender and check out the information provided about personal loans. Most lenders provide an online application process to help their customers. You can simply fill out the details and wait for the bank to get back to you.
- You may also visit the branch office of the bank and apply for the loan. You need to carry all the required documents and check with an agent at the bank to apply for the loan.
- You may also use the services of a third-party aggregator like Indian Loan Bazaar to apply for the loan.
FAQs
- What is the loan tenure available for personal loans?
The loan tenure typically varies from 12 months to 60 months. You can choose the desired loan tenure based on how much you can afford to pay in installments every month.
- How much time do banks take to process personal loans?
With the advent of technology, it is now very easy to get your personal loan approval. Most banks provide their approval within just a few hours. The loan amount will be disbursed within just one or two days in most cases.
- What are the occasions in which personal loans are offered?
Banks do not impose any restrictions on how the loan amount can be spent. Hence, you can take a personal loan for any occasion based on your financial requirements. You may use the loan amount for various things like emergency medical needs, weddings, home renovation, vacation, etc.
- Is it okay for retired government employees to apply for personal loans?
Most banks provide personal loans to individuals who are still employed. Hence, it could be a little difficult for retired employees to get personal loans. You may check with the lender with your requirement to know your eligibility for obtaining a personal loan.
- What is the best way to get a good deal on personal loan interest rates?
Banks consider various factors when they determine the interest rate for a personal loan. If you want the best interest rates possible, you must have a good credit score. This shows that you have a good credit history and you are at low risk of default. It is also better to have your other loans cleared before applying for a personal loan. If your risk level is low, banks provide a good deal on personal loan interest rates.
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