Personal Loan in India

Do you know what this personal loan really is? Simply it is an all purpose loan for your own personal use. Let your need be anything right from meeting medical expenses to wedding expenses to funding holidays to buying jewelry to down- payment for a home loan to transfer of credit card to a sudden business requirement to anything! You can take a personal loan for any purpose. Applying for a personal loan is quite simple these days. Now even you can apply for your personal loan online. You can get a personal loan in the range of Rs.50,000 to Rs.20,00,000. The repayment period usually varies from 1 to 5years.

Personal Loan Banks Details

Loan
Providers
Specifications
Personal Loan in India Interest Rate: 16.75%(SBI Saral)
12.25%(SBI Loan to Pensioners)
14.00%(Employee to Subscribe to ESOPs)
Minimum Income: Rs.24,000/- in metro and urban centers Rs.10,000/- in rural/semi-urban centers more details >>
HDFC Bank Interest Rate: Salaried – 15.75% to 22.25%
Self-employed businessman – 17.50% to 22.00%
Self-employed profession – 14.50 to 15.00% more details >>
Punjab National Bank Interest Rate: BR+3.50%(Pensioners), BR+5.00%(For Public), BR+6.00%(For others)
Documentation charges: Rs. 2 lac: Rs.270+ service tax more details >>
ICICI Bank Interest Rate: 14% to 21% floating
Processing Fees: 2% to 3% of loan amount
Personal Loan Amount:Rs. 1 lakh to Rs. 10 lakhs

<<More details >>

Canara Bank Documents / Formalities:
1) Stipulated Loan Application with 2 copies of passport size photographs
2) Latest Salary Certificate and Form No.16 / ITR/ITAO for last 3 years.
3) Co-obligation (unless waived). more details >>
Axis Bank Interest Rate:15.00% to 24.00%
Default Interest Rate
: @24.00% per annum i.e 2% per month on the overdue installment
Loan Processing Charges:1.50% to 2.00% + Service Tax as applicable.
more details >>

 

What are the eligibility criteria to get a personal loan?

Some of the general criteria to be met to get a personal loan are listed below:

  • The applicant should have an income of not less than Rs,15,000 per month.
  • For salaried applicants, the age should be not less than 21years and not more than 60 years.
  • For the self-employed applicants, the age should not be less than 23years and not more than 65 years.
  • Some banks also require that the applicant has been residing in the same place for at least a year.
  • To get the loan approved, the applicant has to show proof of income, identity proof, address proof and bank statements.

What are things you should know before going for a personal loan?

Before you start with the process of applying for a personal loan, you should do an assessment of your situation. You should be clear in your mind on the amount you want borrow and your repayment capabilities.

Before applying for a personal loan, you should ensure that your credit score is good. According to the Credit Information Bureau of India (CIBIL), your credit score should be between 100 and 999. The lower your credit score, the more chances of your application being rejected. The higher the credit score, the lower will be the interest rates charged.

Another factor to be considered when applying for a personal loan is if you want to opt for reduced-balance interest rate or flat interest rate. With reduced-balance interest rate, the interest on the loan keeps on reducing as it is calculated on the reduced principle amount which reduces daily, monthly, quarterly or annually. With flat interest rate, the rate of interest will remain the same over the entire loan duration.

How can you get the best-possible personal loan?

You should compare the deals offered by the various lenders before choosing a personal loan. A few of the parameters to be checked are:

  • Interest rates – These vary from lender to lender based on your occupation, income and your credit history. The personal loan interest rates range from 12% to 25%. You should opt for lender that offers the best interest rates.
  • Repayment duration – The EMI will be higher for a short duration loan and vice versa. Ensure that you have enough funds to pay back the loan if you have a high EMI.
  • Fees charged – The interest rates are not the only charges you have to pay. You will also have to pay some other charges such as processing fee (between 1% and 2% of the loan amount), pre-payment fee (between 4% and 5% of the outstanding loan amount) and in some cases, a late payment penalty fee (between 2% and 3%). Try to choose a bank which offers the lowest rates on these items.

Considerable thought and thorough research is required before you obtain a personal loan. You should also ensure that you have adequately planned for the repayment of the personal loan within the prescribed time.