While specific criteria vary, here are common requirements across banks:
- Age: Usually between 21 and 60-65 years (at loan maturity).
- Employment Status: Salaried individuals (government, PSU, private sector employees) and self-employed professionals (doctors, CAs, architects, etc.) are generally eligible. Some banks also offer loans to self-employed non-professionals and pensioners.
- Minimum Income: Most banks have a minimum net monthly income requirement, typically ranging from ₹15,000 to ₹30,000 or more, depending on the city and bank.
- Work Experience/Business Vintage: Salaried individuals usually need 1-2 years of total work experience, with at least 6 months to 1 year in the current organization. Self-employed individuals need a business vintage of 3-5 years.
- CIBIL Score: A good credit score (generally 700-750 or above) significantly improves your chances of approval and helps secure lower interest rates.
- Banking Relationship: Having a salary account or existing relationship with the bank can often lead to more favorable terms, pre-approved offers, and quicker processing.
Other Important Considerations:
- Processing Fees: These are one-time charges levied by banks for processing your loan application. They are typically a percentage of the loan amount or a flat fee, often ranging from 0.5% to 2.5% (or even up to 5% for some banks) plus GST. Some banks may waive them for specific schemes or customer profiles.
- Repayment Tenure: The maximum tenure generally ranges from 5 to 7 years, though some banks, especially for pensioners, might offer longer tenures (e.g., Indian Bank up to 10 years).
- Foreclosure/Prepayment Charges: Many banks charge a fee if you wish to repay your loan before the scheduled tenure (foreclosure) or make partial prepayments. This varies from bank to bank and may have a lock-in period (e.g., prepayment allowed only after 12 EMIs). Public sector banks often have lower or no prepayment charges.
- Documentation: Common documents include identity proof (PAN, Aadhaar), address proof (utility bills), and income proof (salary slips, bank statements, ITR for self-employed).
- Digital Process: Many banks offer instant personal loans through their mobile apps (like SBI YONO) or online platforms with minimal documentation for pre-approved customers.
When choosing a personal loan, it’s crucial to not only compare interest rates but also consider the overall cost (including processing fees, other charges), the flexibility of repayment, customer service, and the ease of the application process.