Personal Loans are unsecured loans taken by individuals from a bank or a non-banking financial company (NBFC) with the sole purpose of meeting their personal needs In this article, we will cover everything you need to be aware of if you’re planning on opting for a Personal Loan or just want to educate yourself about it.

When can you opt for a Personal Loan?
Because Personal Loans are essentially multi-purpose loans, there is no fixed time to apply for it. Rather, you can choose to go for a Personal Loan whenever you feel the need. That’s why it is one of the most commonly opted for methods of financing.

Based on our research, below are some common reasons to apply for a Personal Loan:
  • Holiday/ Vacation financing
  • To Finance Festive Celebrations or Needs
  • Finance Weddings
  • Build/ Renovate house
  • Medical Emergency
  • Refinancing The Home Loan
  • To Fix A Car
  • Financing Education
  • Business Expansion
  • Debt Consolidation 

Benefits of Personal Loans
  • No security or collateral
    Being an unsecured loan, there is no collateral of any asset required. It is offered on the basis of your credit history and repayment capacity. 
  • Less documentation
    Contrary to popular sentiment, personal loans are approved with minimum documentation.
  • Quick loan disbursement
    These days it takes few hours for loan disbursement. If banks feels that you have the capacity to re-pay the loan within the stipulated time and need loan for genuine reason then getting a personal loan disbursement is easy.
  • Fixed rate of interest
    Rate of interest on personal loan is fixed at the start of the tenure and remains constant throughout therefore making it easier for loan applicants to plan their EMIs well in advance.
  • Flexible loan tenure
    Personal loans offer loan tenure ranging from between 1 year to 5 years. So you have flexibility to choose your tenure as per your re-payment plan.

Expert Tip: Best is to opt for a lower tenure loan and save on the interest outlays.
  • Easy EMI facility
    Personal loans offer easy EMI facilities that help you re-pay the principal amount over the tenure.
  • It is a multipurpose loan
    Unlike home loan or car loan, personal loans can be availed to meet almost all aspirations.

Eligibility criteria for Personal Loans
Some of the driving forces that define your eligibility to apply for a personal loan are:
  • You are a salaried doctor, or a CA, or an employee of any private limited company or a Public-Sector undertaking (including Central, State and Local bodies).
  • You are within the age range of 21 to 60 years.
  • You have held a job for at least 2 years, with a minimum of 1 year with the current employer.
  • Your salary is Rs. 15,000 per month or more (Rs. 20,000 or more if you are in Delhi, Mumbai, Bengaluru, Chennai, Hyderabad, Pune, Kolkata, Ahmedabad or Cochin).
Also learn more about your Personal Loan Eligibility here.

* Terms & conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances