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Personal Loan
Personal Loan is an unsecured loan that can be used for any purpose like closing existing loan, credit card outstanding, medical expenses, vacation or a grand function in family.
Financial institutions go for systematic analysis of loan applicant's creditworthiness, employment details, past credit history, independent credit reports and borrower's ability to repay the personal loan. Generally, financial institutions have stringent norms to assess One's repayment capacity. A thumb rule is that one need to have a high credit score.
Financial institutions also look at overall existing obligations of the applicant to arrive at the personal loan eligibility.
Income Source: Lenders will carefully evaluate the borrower's source of income, and it's stability while deciding the interest rate. Individuals with higher income source will be offered low-interest rates, good deals by the banks or NBFCs as they pose less risk to the lender. And those who have low income but still intend to apply for a personal loan will get a slightly higher interest rate.
Employer details: If one works with a reputed organization, then lenders will offer the applicant low-interest rates. If these firms have any tie-ups with a particular bank or financial institution, applicants can avail of an additional concession on the interest rates and processing fees as well.
Credit score: Credit score plays an important role while sanctioning a loan. If the credit score is over 700, the applicant will be charged low personal loan interest rates and vice versa. Credit score usually indicates a borrower's creditworthiness and repayment capability.
Applicant's age: Age will also affect the interest rate on personal loans. Individuals who are young, and have just started working, will be charged low-interest rates because of easy recovery in the near future. And those who are nearing the retirement age will be charged higher interest rates.
Prior financial commitments: If there is already an ongoing loan, definitely it will impact the loan eligibility. Lenders will offer an interest rate based on net income factoring in fixed obligations.
|
Bank |
Eligible Max Loan Amount & Max Tenure |
Age of the borrower |
Minimum Work Experience |
Personal Loan Interest Rates |
Processing Fee |
|
HDFC Bank |
Rs. 50 Lakh for 60 Months |
21 to 60 Years |
24 Months |
11.25% |
Min 0.99%, Max 2.50% Up to Rs. 10,000 |
|
Bajaj Finserv |
Rs. 25 Lakh for 60 Months |
27 to 58 Years |
36 Months |
11.99% |
Starting from 1.50%, Up to 3% |
|
Citibank |
Rs. 30 Lakh for 60 Months |
23 to 60 Years |
36 Months |
10.99% |
Up to 0.5% |
|
IDFC First Bank |
Rs. 25 Lakh for 60 Months |
23 to 58 Years |
12 Months |
13.50% |
2% |
|
Axis Bank |
Rs. 15 Lakh for 60 Months |
21 to 60 Years |
12 Months |
11.25% |
1.50% to 2.00% |
|
Tata Capital |
Rs. 20 Lakh for 60 Months |
21 to 58 Years |
24 Months |
11.75% |
Flat fee of Rs. 999*, Up to 2% |
|
Fullerton India |
Rs. 20 Lakh for 48 Months |
21 to 58 Years |
36 Months |
17.25% |
Up to 2.00% |
|
IndusInd Bank |
Rs. 25 Lakh for 60 Months |
21 to 60 Years |
24 Months |
11.00% |
Min 1% to Max 2.50% |
|
Kotak Bank |
Rs. 15 Lakh for 60 Months |
21 to 58 Years |
24 Months |
11.50% |
Up to 2.5% |
|
RBL Bank |
Rs. 20 Lakh for 60 Months |
25 to 60 Years |
36 Months |
13.99% |
Up to 2% |
|
IIFL |
Rs. 25 Lakh for 60 Months |
25 to 60 Years |
36 Months |
12.99% |
1 - 2% |
|
HDB Financial |
Rs. 20 Lakh for 60 Months |
21 to 60 Years |
24 Months |
13.99% |
Up to 2% of loan amount |
|
Yes Bank |
Rs. 20 Lakh for 60 Months |
21 to 60 Years |
24 Months |
10.75% |
Starting at 0.99%, Up to 2% |
|
Documents Required |
Individuals |
Firms, Partnerships |
|
Signed Application Form |
Required |
Required |
|
Identity Proof |
PAN card, Passport, Driving License, Aadhar Card, Voter id, Govt issued i-card |
PAN card, Passport, Driving License, Aadhar Card, Voter id, Govt issued i-card |
|
Certificate and Proof of Business Existence |
PAN , sales tax/ excise/ VAT/ service tax registration, Copy of partnership deed, Trade license, certificate of practice, registration certificate issued by RBI, SEBI |
|
|
Address Proof |
Passport, Driving License, Election ID card, Electricity/ Telephone/ Mobile bill/ bank statement (not more than 3 months old) |
Bank statement, utility bill, Registry copy, lease or rent agreement, TAN allotment letter |
|
Age Proof |
PAN card, Passport, Driving License, Voter id card, Birth certificate, Employee ID card (only for PSU/ Government employees), School/ college leaving certificate |
PAN card, Passport, Driving License, Voter id card, Birth certificate, Employee ID card (only for PSU/ Government employees), School/ college leaving certificate |
|
Income Proof |
Last 2 years Form 16, last 6 months salary slip, last 6 months' bank account statement showing salary credit |
Last 2 years ITR, last 6 months bank account statement, |
|
Other Documents |
For CAs/Architects / Doctors, their highest qualification certificate |
GST certificate and tax returns for 12 months |
To stand a good chance of getting a personal loan approved, the following steps are recommended:
Before applying for a personal loan, the first step is to check your credit history. A credit score of at least 650 is required to stand a good chance of getting a personal loan sanctioned.
If there are errors in your credit report, it would be prudent to get them rectified before applying for a personal loan.
Compare the interest rates and processing fees for personal loans across different banks and financial institutions. A platform like LoanGyani aggregates information from across the leading providers and enables you to compare various features like fees, pricing, loan amounts available and the duration of repayment.
Use the personal loan calculators available to check different options on monthly instalments, rate of interest and the loan amount. This will help decide on the personal loan amount and duration of repayment. Applying for a personal loan that has a monthly instalment less than 40% of your monthly net salary would be a prudent option.
Including a co-borrower for a personal loan can improve the chances of successful application if the co-borrower can also provide proof of income.
Frequent applications for personal loans, especially after being rejected, would reflect badly on the credit history. This is best avoided.