Bank
Interest rate
Action
Personal Loan Details | |
Loan Amount | Rs. 1 Lakh to Rs. 1 Crore |
Interest Rate | 10.50% onward |
Tenure | 1 year to 5 years |
Processing Fee | Up to 2% of the loan amount |
Prepayment Charges | Up to 5% of the outstanding principal |
- A Personal Loan is an unsecured loan. It is a multipurpose loan that you can take to meet any financial requirement.
- SBI offers the lowest rate 10.50% onward followed by the HDFC bank at 10.75%. Lowest EMI per Rs. 1,00,000 is Rs. 2,149.
- The loan amount available is between Rs. 1 Lakh and Rs. 1 Crore. This product is usually offered to salaried individuals only.
- Some banks and NBFCs may offer personal loan for self-employed (architects, doctors, lawyers, and Chartered accountants), firms, and enterprises as well.
- The key benefits of a personal loan are: minimal documentation, no restriction on the end-use of the fund, quick processing and disbursal.
Features and Benefits of a Personal Loan
Below-given are the benefits and features of a personal loan:
- No Security Required:Â This loan is collateral-free. You can borrow up to Rs. 1 Crore without securing any asset with the bank/NBFC.
- Affordable Interest Rate:Â The personal loan interest rate starts at 10.50%. The rate of interest is much lower than interest charged (as high as 36%) on a credit card loan.
- Flexible Tenure:Â The tenure is flexible: between 1 year and 5 years. You can choose loan tenure as per your repayment ability.
- Quick Disbursal:Â The loan amount is quickly disbursed within 48 hours of loan approval. Therefore, you can choose a personal loan to fulfil urgent expenses.
- Online Application:Â Most lenders allow you to apply for a personal loan online. Thus, no branch visits are required to request for the funds.
Personal Loan Eligibility Criteria
Below-mentioned are the personal loan eligibility norms:
Things to Consider Before Application | Details |
1. Age | You must be above 21 years of age. |
2. Income | Your net monthly income must be at least Rs. 25,000. |
3. Credit Score | A credit score of 650+ is considered as a good credit score to avail the loan. |
4. Employment History | Minimum work experience of 1 year is preferred. You must be able to provide income proofs. Cash salary is not acceptable. |
5. Ongoing EMIs | As a thumb rule, on-going EMIs should not be more than 60% of your income. |
Documents Required for Personal Loan
Here is a list of documents needed for salaried, professional, and self-employed applicants for a personal loan:
Documents Required | Individuals | Self-employed, Firms, Partnerships |
Filled and signed application form | It is required | It is required |
Proof of Identity | PAN card, Driving License, Passport, Voter ID, Govt issued i-card, Aadhaar Card | PAN card, Driving License, Passport, Voter ID, Govt issued i-card, Aadhaar Card |
Proof of Income | Last 6 months salary slip, last 2 years Form 16, bank account statement of the last 6 months reflecting credited salary | Bank account statement of the last 6 months and last 2 years ITR |
Proof of Address | Driving License, Election ID card, Passport, Telephone/bank statement Electricity/ Mobile bill (latest up to 3 months old) | Utility bill/bank statement latest up to 3 months old, TAN allotment letter, lease or rent agreement, registry copy |
Proof of Age | Birth certificate, School/college leaving certificate, Passport, Driving License, PAN card, Voter id card, Employee ID card (only for PSU/ Government employees) | Birth certificate, School/college leaving certificate, Passport, Driving License, PAN card, Voter id card, Employee ID card (only for PSU/ Government employees) |
Certificate and Business Existence Proof | Â | Certificate of practice, PAN, VAT/ sales tax/ excise/service tax registration, Trade license, Copy of partnership deed, registration certificate issued by RBI, SEBI |
Personal Loan Interest Rates
One of the important things to do before applying for personal loans is checking the interest rates offered by banks and NBFCs. The Personal Loan Interest Rates will differ from a financial institution to another on grounds of your individual profile, repayment capacity, income, required loan amount, loan tenure, credit score, and other factors.
Interest Rate | Starting at 10.50% onwards |
Processing Fees | 1% to 3% of the borrowed principal amount |
Loan Tenure | 1 Year to 5 Years |
Pre-closure Charges | May vary from one lender/Bank/NFBC to other |
Pre Part-Payment and Foreclosure in Personal Loan
A personal loan comes with a fixed tenure. The tenure is the repayment period. You are expected to repay the debt via EMIs within this fixed tenure. But anytime if you want to repay the loan sooner than the end of repayment period, you can opt for: Part pre-payment or Foreclosure.
Details | Full Pre-payment/Foreclosure | Part Pre-payment |
What is? | If you pay off the entire outstanding before the end of tenure, then it is known as full pre-payment or foreclosure. | If you pay a part of the outstanding amount before the tenure’s end, then it is known as part pre-payment. |
Benefits | Â One of the benefits of foreclosure is that you save on the interest payout. | Â One of the benefits of part pre-payment is that you can use excess funds in hand to pay a portion of the outstanding amount. |
Precautions | However, if the lender charges a penalty on foreclosure, then you may have to pay a good amount of interest. | Several lenders charge a fee for part-payment. You need to check the charge for part-payment and analyze if it is the best to pay off a portion of the outstanding principal or not. |
