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Personal Loans

Personal Loans

A personal loan is a short to medium term (unsecured) loan which gives you the ability to consolidate debt, plan a vacation, renovate your home, or afford a lavish wedding. Find your Personal Loan that suits your needs now!!

What is a Personal Loan and what can it be used for?

A Personal Loan is an unsecured loan taken by borrowers to meet their varied financial needs. It is also called an ‘All-purpose loan’ at times as there is no restriction on the end use of the funds.

Borrowers use personal loans for various reasons such as debt consolidation, vacations, refurnishing their homes, buying a new appliance, to fund weddings, pay education or medical expenses etc. Personal loans, when used judiciously can also be beneficial in improving your finances and your credit score.

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Why go for a Personal Loan?

Personal Loans are the perfect means to your end when it comes to meeting the financial needs of your life.

  • Debt Consolidation- It helps you to consolidate your expenses by paying off your credit card bills or other debts in a timely manner.
  • Quick Approval- Apart from a good credit score, minimum documentation leads to faster processing when securing a personal loan.
  • Flexibility of Use- Since there is no monitoring of the end use, it gives you the flexibility to use the loan for any type of expense.
  • Unsecured Loan Type: You are not required to submit any security/collateral to the lender to get a personal loan.
  • Improve Your Credit Profile- Personal Loan is another line of credit added to your credit report, and if you maintain it by making on-time payments, you can improve your credit history and profile.

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What do lenders look for before sanctioning a loan?

The factors that determine if your personal loan application will be approved or rejected are:

  • CIBIL Score and Report: Your credit score and report is one of the most important parameters that facilitate your loan approval. Since you do not have to provide a security/collateral to the lenders, they are at risk of losing money in case you default on your payments. Hence, lenders carefully analyze and evaluate your credit history before approving your loan application.A high CIBIL Score increases your chance of loan approval.
  • Employment Status: Due to the nature of personal loans being unsecured, it becomes incumbent on the lenders to ensure that applicants have a steady source of income and have been in a stable job for the past few years. A person who has a history of frequently changing jobs might not be considered an ideal case for his/her personal loan approval.
  • Annual Income: Your annual income (from salary and other sources) is also an important factor, which indicates that you have surplus money to repay your loan.
  • EMI Payment: While evaluating your credit report, lenders check your EMI repayment pattern and frequency pertaining to all your loan and credit card accounts. Making regular monthly payments without any outstanding, portrays your financial discipline and in turn eases the decision making process for lenders.

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How much loan and for what duration can it be taken for?

Personal Loans can start from as low as Rs. 10,000 to Rs. 30,00,000/- based on the lender and the borrower’s ability to pay back. Since it is a short term loan, the repayment options are usually flexible, and can range between 12-60 months, depending on the lender and the credit history of the borrower. Click here to check your personal loan eligibility.

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What are the interest rates that I am eligible for?

Interest rates for a personal loan vary from borrower to borrower and lender to lender, depending on their individual credit history and amount borrowed. Get your CIBIL Score and Report, log on to myCIBIL and check special interest rates (and other features) offered to you by participating Banks based on your CIBIL Score and other parameters.

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What are the factors that affect interest rate for Personal Loan?

The lending rate depends on:

  • Loan amount compared to your income
  • Loan tenure that you opt for
  • Credit profile which is ascertained from your CIBIL Score and Report

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What are the other fees and charges payable and when?

  1. When you apply for a personal loan, processing charges typically vary from 2-3% of the loan amount and varies from lender to lender.
  2. When you prepay your loan i.e., if you pay-up the loan before the loan tenure then, there is a prepayment charge varying from 2-3%.

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How long will it take for a loan to be sanctioned?

The time taken to disburse personal loans varies from lender to lender. Your loans may be approved in as little as 24 hours or may take up to 7 business days, based on your credentials.

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What are the documents required to apply for a personal loan?

The types of documents to be submitted when applying for a personal loan varies from lender to lender. However, the common documents required by most lenders include:

Documents for Salaried Individuals:

  • Proof of Identity: Aadhar Card, Passport, Driving License, Voters ID or PAN Card
  • Proof of Residence: Aadhar Card, Passport, Driving License, Voters ID or Utility Bills
  • Latest 3 months Bank Statement of Salary Account
  • Salary slip for last 3 months

Documents for Self-Employed:

  • Proof of Identity: Aadhar Card, Passport, Driving License, Voters ID or PAN Card
  • Proof of Residence: Aadhar Card, Passport, Driving License, Voters ID or Utility Bills
  • Income proof: Audited financials for the last two years
  • Last 6 months Bank statement
  • Office address proof

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What should I look out for?

When applying for a Personal Loan, make sure you borrow within your means or else the repayment will become a long and tedious process which could affect your credit history and CIBIL Score if you have outstanding payments. Personal loans are one of the most expensive forms of loan available in the market, hence, choose carefully after conducting due research and understanding of the cost and the benefits involved.

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Document Checklist

Latest Credit Score & CIR*
Bank Statement
KYC docs (identity, signature & address proof)
Registration Papers   
Income Statement (such as salary slip)
Property Papers   
Last 3 years IT return ✓
(for self-employed only)
(for self-employed only)

* This is an indicative list and may differ from lender to lender.

Loan Eligibility Calculator

Click here to check your loan eligibility and EMI calculator