Personal Loan

While you can apply for a personal loan directly with banks/NBFCs, making direct loan applications with multiple lenders can significantly reduce your credit scores and thereby, reduce your chances of getting the loan. >

To avoid this, you should visit online financial marketplaces like Paisabazaar, which allows you to compare personal loan offers from multiple partner lenders without adversely impacting your credit scores.

Personal loan interest rates offered by leading banks and NBFCs start from 10.49% p.a. depending on the credit profile of their loan applicants. However, some public sector banks may offer lower interest rates to their personal loan applicants.

For most individuals, a lender offering the lowest interest rate on personal loans would be the best as it will help them save on the overall interest cost of the loan. However, besides considering the interest rates, parameters such as the loan amount, tenure, processing fees and the time taken for loan approval and disbursal must also be considered when looking for the best bank for availing a personal loan.

Applicants with a credit score of 700 and above usually have higher chances of availing personal loans. However, many banks and NBFCs offer loans to individuals with low CIBIL score/credit score but charge higher interest rates to compensate for the higher credit risk associated with those lenders.

Banks and NBFCs check an applicant’s personal loan eligibility based on his age, credit score, income, loan repayment capacity, occupation profile, employer’s profile, etc. Due to varying credit risk policies, the eligibility criteria may vary across lenders.

Therefore, applicants would have to check their eligibility by individually visiting the branch or website of various banks and NBFCs.

The tenure of a regular personal loan usually ranges from 1 year to 5 years. However, some lenders offer maximum loan tenure for 6 to 8 years.

The EMI on Rs 5 lakh personal loan will depend on the interest rates charged by the lender for the loan tenure availed by you. Hence, use an online EMI calculator to calculate your EMI for different tenure and interest rate values.

Instant personal loan is a personal loan variant, which is usually disbursed within a few minutes of making the loan application. This loan facility is usually pre-approved in nature and lenders usually offer this facility to their select existing customers having a good credit profile.

Regular personal loan schemes, on the other hand, have the same features as instant personal loans except that regular personal loan schemes have turnaround time of 2-7 days for loan disbursal and the eligible loan amount is usually higher than what is offered through instant personal loan by the same lender.

The minimum monthly salary required to avail a personal loan varies from lender to lender. However, for large lenders like private and public sector banks, the minimum income eligibility is Rs 15,000 per month and above.

Yes, you can get a personal loan without providing salary slips. You can submit your bank account statement/ a copy of Form 16/ employee certificate from the employer, etc. as proof of income to fulfill the eligibility criteria.

However, it is always recommended to confirm the list of required documents with the lender as it may vary from one bank to another.

Yes, you can apply for a personal loan even if you already have a home loan. However, the chances of getting the loan approved will depend on whether you have adequate repayment capacity to repay the proposed loan.

Lenders are free to levy prepayment/foreclosure charges on personal loans availed at fixed interest rates. However, the RBI has barred the lenders from levying these charges on loans availed at floating interest rates.

In some cases, you may cancel a personal loan after disbursal subject to the terms and conditions of the lender. Loan cancellation will lead to cancellation charges and processing fees.

Please note that all banks do not allow loan cancellation once the amount is disbursed. However, you can always prepay the loan amount as per the terms and conditions of the bank and save on the interest component.

Some lenders use EMI/NMI ratio while some may use a multiplier method to determine their applicant’s eligible loan amount. As these ratios may differ across lenders, the maximum loan amount that you can avail on Rs 60,000 salary would also vary.

Traditionally, personal loans are unsecured loans, which implies that the borrower does not need to pledge collateral or security to avail the loan. However, some lenders also offer secured personal loans wherein the borrower needs to provide security or collateral to avail the loan.

An applicant should opt for the secured loan facility only when he is ineligible for availing unsecured loan or is charged very high interest rates for it.

Pros: Personal loan comes with several benefits like no restrictions on end usage (other than speculation), no collateral/security requirements, minimal to no documentation and quick processing.

Cons: The interest rates are usually higher than its secured alternatives like gold loan, loan against property, etc. Also, its short repayment period/tenure (usually till 5 years) leads to higher EMIs, which in turn reduces the EMI affordability and overall loan amount eligibility of the borrower.

The minimum income requirements set for availing personal loans vary across lenders. While the minimum monthly salary requirements set by top lenders usually ranges between Rs. 15,000 and Rs 30,000, some lenders also offer loans to applicants having lower monthly income.

Yes, you may avail personal loans from multiple lenders at the same time, provided the lender of your second personal loan is satisfied with your repayment capacity. However, it is better to take a single loan of a larger amount from the lender providing lower interest rates and/or better terms and conditions.

Yes, the proceeds of a personal loan can also be used for financing various business requirements except for any speculative activities.

You can make personal loan EMI overdue payments online through the bank’s internet banking platform, mobile application, UPI app or other digital payment systems such as NEFT/RTGS, digital wallets (e-Wallets) and payments apps.

You can also visit the lender’s branch to make overdue payments through offline modes like cash, cheque and demand draft (DD).

Lenders offer personal loans to pensioners in the form of pension loans. However, these loans are offered only to those pensioners who maintain their pension account with the respective bank.

Checking personal loan offers on Paisabazaar will make the process faster, easier and more convenient. Here are a few more reasons to apply for personal loans through Paisabazaar:

• Check and compare personal loan offers from 30+ partner banks and NBFCs without adversely affecting your credit score
• Get pre-approved offers with instant disbursals
• Know your chances of loan approval based on your credit score and other aspects of your credit profile
• Apply for a personal loan online through end-to-end digital process

Those who had availed their personal loans at higher interest rates and are now eligible for lower interest rates due to their improved credit profile should avail balance transfer facility.

However, before making the transfer, they should calculate the net savings from the transfer after factoring in various costs associated with the transfer. If the savings are not significant, then they should continue with their existing loan.

Your existing lender will provide you with a no-dues certificate after the complete repayment of your personal loan.

Students can apply for personal loans only if they satisfy the various eligibility requirements related to age, income, credit score, etc. set by the lenders.