1,00,000 Loan : Select Bank⬇️
A personal loan is an unsecured loan that individuals can avail for various personal needs, such as medical emergencies, weddings, home renovations, debt consolidation, or travel. Unlike secured loans (like home loans or car loans), personal loans don’t require collateral, which means the lender assesses your creditworthiness based on your income, credit history, and employment stability.
Here’s a breakdown of key aspects related to personal loans in India:
1. Eligibility Criteria: Lenders typically consider the following factors to determine your eligibility for a personal loan:- Nationality: Must be an Indian citizen.
- Age: Generally between 21 and 60-65 years (or up to 80 years at the end of the loan tenure with some lenders).
- Employment Status: Salaried individuals (working for public, private, or MNCs) and self-employed individuals/professionals are eligible.
- Monthly Income: A minimum monthly income is usually required, which can vary by city and lender (e.g., Rs. 25,000 – Rs. 30,000 in major cities).
- Credit Score (CIBIL Score): A good credit score (typically 685 or higher, with 750+ being ideal) significantly increases your chances of approval and better interest rates.
- Work Experience/Business Vintage: Minimum work experience (e.g., 1-2 years) for salaried individuals and business vintage (e.g., 2-3 years) for self-employed individuals is usually required.
- Debt-to-Income Ratio: Lenders assess your existing debt obligations to ensure you can comfortably manage new EMI payments.
- Your Credit Score: Higher credit scores usually translate to lower interest rates.
- Income and Employer: Stable and higher income, and employment with a reputed organization, can fetch better rates.
- Loan Amount and Tenure: These also play a role in determining the interest rate.
- Lender’s Policies: Each bank/NBFC has its own lending policies and risk assessment.
Some indicative interest rates from top banks (as of June 2025):
- State Bank of India: 10.30% – 15.30% p.a.
- HDFC Bank: 10.90% – 24.00% p.a.
- ICICI Bank: 10.85% – 16.65% p.a.
- Axis Bank: 11.25% p.a. onwards
- Kotak Mahindra Bank: 10.99% – 16.99% p.a.
- IDFC FIRST Bank: 9.99% p.a. onwards
- Identity Proof: PAN Card, Aadhaar Card, Passport, Voter ID, Driving License.
- Address Proof: Aadhaar Card, Passport, Driving License, Voter ID, Utility Bills (electricity, telephone) not more than 3 months old.
- Income Proof (for Salaried):
- Latest 3 months’ salary slips.
- Bank statements (salary account) for the last 6 months.
- Form 16 or IT Returns for the last 1-2 years.
- Income Proof (for Self-Employed/Professionals):
- Latest 2-3 years’ IT Returns, including computation of income, profit & loss account, balance sheet, and audit report.
- Business proof (Shop Establishment Act, tax registration copy, company registration license).
- Bank statements for the past 1 year.
- Other Documents:
- Duly filled and signed loan application form with passport-sized photographs.
- Employment proof (e.g., offer letter, employee ID) for salaried individuals.
- Determine Your Requirement: Assess how much loan you need and for what purpose.
- Check Eligibility: Use online eligibility calculators provided by banks to understand the maximum loan amount you qualify for.
- Calculate EMIs: Use an EMI calculator to determine your affordable monthly installments.
- Choose a Lender: Compare interest rates, processing fees, and other charges from various banks/NBFCs.
- Apply:
- Online: Most banks offer online applications through their websites or mobile apps. Existing customers might even get pre-approved offers.
- Offline: Visit a bank branch and fill out the application form.
- Some banks also allow applications via ATM machines or phone banking.
- Submit Documents: Provide the required KYC and income documents. Many banks offer minimal or no documentation for pre-approved loans for existing customers.
- Verification: The lender will verify your details, including your CIBIL score, income, and employment.
- Disbursal: Once approved, the loan amount is disbursed directly to your bank account. Disbursal can be as quick as 10 seconds for pre-approved customers and within 4 hours for non-customers with complete documentation.
Important Considerations:
- Processing Fees: Lenders charge a processing fee, typically 0.5% to 4% of the loan amount.
- Prepayment/Foreclosure Charges: Be aware of charges if you plan to repay your loan before the tenure ends.
- Late Payment Penalties: Missing EMI payments can result in penalties and negatively impact your credit score.
- Debt-to-Income Ratio: Ensure your total EMIs (including the new personal loan EMI) do not exceed 40-50% of your net monthly income.
It’s always advisable to compare offers from multiple lenders and thoroughly read the terms and conditions before applying for a personal loan.