I Want

Personal loan is unsecured loan and helps the borrowers meet their current financial needs. The borrower does not usually need to pledge any security or collateral while availing a personal loan and the Bank provides the flexibility to use the funds as per borrower’s need. Personal loan can serve as a quick financial solution for managing travel costs and expenses like medical emergency, home renovation, debt consolidation and others.

Eligibility :

Generally, individual(s) with steady source of income including persons engaged in agriculture and allied activities, who are 18 years of age are eligible for loan. Salaried people get the personal loan sanctioned quite easily on the basis of the salary slips and the income tax returns.
CIBIL score is one of the important factors for granting personal loan.

Purpose :

It is all utility purpose loan and the loan amount can be used for any purpose. The banks are not interested to know what the borrower is going to do with the loan amount. One can use the fund of travel, shopping, for medical expense, renovation of house etc.

Maximum Amount :

The maximum loan eligibility for amount is usually calculated on the basis of the repaying capacity of the borrower is arrived at by finding out the ratio of EMI/NMI.
EMI= Equated Monthly Instalment
NMI= Net Monthly Income

Security :

Personal loans are security free loans and Banks do not ask for any collateral.
Sometimes Banks can ask for additional Guarantors looking at the high value ticket loans.

Frequently Asked Questions

Can I join with my spouse for Personal Loan?
Yes, you and your wife can jointly apply for personal loan and in that case the loan amount can be raised higher by clubbing the income of both the applicants.
What documents are required to apply for personal loan?
The documents required for personal loan varies from Bank to Bank but in general these are the basic documents required to be submitted along with the application;
  • Income certificate/ salary slip
  • IT returns for last three years
  • Bank statement of the account where salary is credited
  • ID proof
  • Address Proof
What is credit score and how do they impact my loan application?
Every borrower is assigned a score on the basis of all the loans that he has taken from banks including the credit cards. The score is parameter to judge the discipline, repaying capacity, defaults in EMI payment and the credit history of the borrower. A high credit score is preferred and beyond a certain level the Banks do not grant loan. In India the credit score is generally maintains by the CIBIL.
Is there any tax benefit associated with Personal Loan?
No, Personal loans do not have any tax benefit associated with them.
How can the loan eligibility be enhanced?
The income of the spouse may be added if he/she is a co-borrower.
Can a Personal Loan be pre-closed?
Yes, the Banks do allow the personal loans to be pre-closed but it is advisable to read through the terms and conditions of the loan document and seek confirmation from the bank.