Personal loans offer flexibility for individuals in need of quick financial assistance. Several lenders offer personal loans with varying loan amounts, tenures, and interest rates to suit different needs. Read on to learn more about the loans available from various lenders and the process of applying for a personal loan.
Documents Required for Personal Loan
The common documents required to apply for a personal loan include:
Proof of Identity: Aadhar Card, Passport, Voter ID, etc.
Proof of address: Utility bills, rental agreements, or bank statements.
Income proof: Salary slips, bank statements, or income tax returns.
Employment proof: Job offer letter, salary slip, or self-employment documents.
In case of online personal loans, you can apply for a personal loan with as few documents as a PAN card and Aadhaar Card. You may also need to submit an income proof in certain cases.
Eligibility criteria for Personal Loan
To qualify for a personal loan, the following criteria typically apply:
age
Most lenders require applicants to be between 21 and 60 years old.
Income
A stable income source (usually a minimum of ₹20,000 per month for salaried individuals) is required.
Credit Score
A good credit score (650 and above) is often necessary to secure a loan at favourable terms.
Employment
Applicants should be employed with a reputed company or self-employed with a steady income.
Following are other ways you can apply for a personal loan:
Online application: Most lenders offer online loan applications via their website or app. You need to fill in the required details and submit the necessary documents online.
In-branch application: Visit the lender’s branch with your documents and complete the loan application process with the assistance of a bank representative.
Types of Personal Loans
Personal loans come in various forms, catering to different financial needs. Below are some common types:
Unsecured personal loans – These do not require collateral and are based on the borrower’s creditworthiness and income.
Secured personal loans – Require collateral such as property, gold, or fixed deposits, usually offering lower interest rates.
Debt consolidation loans – Used to combine multiple debts into a single loan with a lower interest rate, making repayment easier.
Medical emergency loans – Designed to cover unexpected medical expenses with quick disbursal.
Wedding loans – Specifically meant for financing wedding expenses, including venue bookings, decorations, and travel.
Home renovation loans – Help in funding repairs, remodelling, or upgrades to a home.
Education loans – Used to finance tuition fees, study materials, or overseas education expenses.
Travel loans – Cover travel-related costs, such as flights, accommodation, and trip expenses.
Business personal loans – Offered to self-employed individuals for business expansion, working capital, or new ventures.
FAQs
Can I get a personal loan if I have an existing loan?
Yes, you can still apply for a personal loan. However, lenders may consider your existing loan obligations and may charge a higher interest rate or reduce the loan amount.
What happens if I miss an EMI payment?
Missing an EMI payment may result in late fees, a negative impact on your credit score, and possible legal action by the lender.
Can I get a personal loan with a guarantor?
Yes, some lenders may approve a personal loan with a guarantor, which could help you secure better terms, especially if you have a low credit score.
Can I increase my loan amount after approval?
Generally, the loan amount is fixed once approved. Some lenders may allow an increase, but it depends on the lender’s policy.
Is it safe to take a personal loan from online lenders?
Yes, as long as you choose a reputed online lender with proper regulatory approvals and a secure online platform.
Can I avail a personal loan for business purposes?
Yes, you can use a personal loan for business-related expenses. However, it is advised to check with the lender if they have any specific conditions.
Can I transfer my personal loan to another lender?
Yes, you can transfer your personal loan to another lender through a process called loan balance transfer if you find a better interest rate or terms.
Can students apply for a personal loan?
Students may find it challenging to qualify for a personal loan as they generally lack a stable income source. However, some lenders may offer loans with a co-signer.
Can I get a personal loan immediately without a salary?
It is difficult to get a personal loan without a salary or steady income. However, if you are self-employed, you may be able to apply if you qualify the eligibility criteria of the lender.
Can I take a personal loan if I have an existing home loan or car loan?
Yes, you can still take a personal loan, but lenders may assess your existing liabilities before approval.
My personal loan application got rejected. How can I reapply?
Reapply only after addressing the reasons for rejection, such as improving your credit score or providing the required documentation.
Can I prepay my personal loan early?
Yes, most lenders allow early prepayment of loans. However, there may be prepayment penalties depending on the lender’s terms.
Can I get a personal loan with no credit history?
Yes, some lenders may provide loans without a credit history, but they may require higher interest rates or collateral.
Can my spouse’s income be included for calculating the loan amount?
Yes, many lenders allow you to include your spouse’s income while calculating the loan amount.
Who can become a co-applicant for a personal loan?
A co-applicant can be a family member such as a spouse, parent, or sibling who helps increase the chances of loan approval.
Can I apply for a personal loan without income proof?
It is unlikely to get a personal loan without income proof, but some lenders may accept alternative documents like a bank statement or tax returns.
Is a personal loan available for holiday or travel purposes?
Yes, you can use a personal loan for travel expenses, although some lenders may require you to justify the purpose of the loan.
Do personal loans have any tax benefits?
Personal loans do not offer tax benefits unless used for specific purposes like home renovation, education, or medical treatment.
Can a freelancer apply for a personal loan?
Yes, freelancers can apply for personal loans, but they may need to provide additional documentation, such as bank statements or tax returns.
Can I request a change in my interest rate and processing fee?
Once approved, the loan terms are generally fixed. However, you can negotiate the terms with the lender before approval.
Can I apply for a personal loan if I am on probation at my job?
Being on probation may affect your eligibility. Lenders may be hesitant to approve loans for applicants on probation due to job security concerns.
Can I apply for a personal loan if I am self-employed?
Yes, self-employed individuals can apply for personal loans, but they will need to provide business-related documents like income tax returns and bank statements.
Can I use a personal loan for credit card repayment?
Yes, you can use a personal loan to pay off credit card debt. It may help you consolidate debt into one manageable payment.
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Parineeta Mukherjee
I would like to thank Moneycontrol, few days back I met with an accident and I didn’t have much money to pay in one go. So, I took an instant cash advance from Moneycontrol. They helped me to clear all the medical bills in just 10 mins!
Suresh V Rangnathan
The overall experience with Moneycontrol was really good. I applied for an online personal loan and the service was very quick. The entire process was fast and smooth, and the loan was sanctioned without any hassles.
Parineeta Mukherjee
I would like to thank Moneycontrol, few days back I met with an accident and I didn’t have much money to pay in one go. So, I took an instant cash advance from Moneycontrol. They helped me to clear all the medical bills in just 10 mins!
Suresh V Rangnathan
The overall experience with Moneycontrol was really good. I applied for an online personal loan and the service was very quick. The entire process was fast and smooth, and the loan was sanctioned without any hassles.
Parineeta Mukherjee
I would like to thank Moneycontrol, few days back I met with an accident and I didn’t have much money to pay in one go. So, I took an instant cash advance from Moneycontrol. They helped me to clear all the medical bills in just 10 mins!
Suresh V Rangnathan
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