Personal Loan
Apply Now| Personal Loan Details | |
| Loan Amount | Rs. 1 Lakh to Rs. 1 Crore |
|---|---|
| Interest Rate | 10.50% onward |
| Tenure | 1 year to 5 years |
| Processing Fee | Up to 2% of the loan amount |
| Prepayment Charges | Up to 5% of the outstanding principal |
- A Personal Loan is an unsecured loan. It is a multipurpose loan that you can take to meet any financial requirement.
- SBI offers the lowest rate 10.50% onward followed by the HDFC bank at 10.75%. Lowest EMI per Rs. 1,00,000 is Rs. 2,149.
- The loan amount available is between Rs. 1 Lakh and Rs. 1 Crore. This product is usually offered to salaried individuals only.
- Some banks and NBFCs may offer personal loan for self-employed (architects, doctors, lawyers, and Chartered accountants), firms, and enterprises as well.
- The key benefits of a personal loan are: minimal documentation, no restriction on the end-use of the fund, quick processing and disbursal.
Features and Benefits of a Personal Loan
Below-given are the benefits and features of a personal loan:
- No Security Required: This loan is collateral-free. You can borrow up to Rs. 1 Crore without securing any asset with the bank/NBFC.
- Affordable Interest Rate: The personal loan interest rate starts at 10.50%. The rate of interest is much lower than interest charged (as high as 36%) on a credit card loan.
- Flexible Tenure: The tenure is flexible: between 1 year and 5 years. You can choose loan tenure as per your repayment ability.
- Quick Disbursal: The loan amount is quickly disbursed within 48 hours of loan approval. Therefore, you can choose a personal loan to fulfil urgent expenses.
- Online Application: Most lenders allow you to apply for a personal loan online. Thus, no branch visits are required to request for the funds.
Types of Personal Loans in India
Personal loans are used for multiple purposes, some of which are given below:
| Purpose of a Personal Loan | Details |
|---|---|
| 1. Debt Consolidation | To consolidate debts, such as paying off soft loans, credit card bills, other existing loans with a single personal loan. |
| 2. Big-ticket Purchases | To purchase gadgets and electronics items such as iPhone, smartphones, laptops, computers, etc. |
| 3. Holiday or Travel Loan | To fund expenses of a holiday tour, vacation getaway, business travel trip, etc. |
| 4. Home Renovation | To manage expenses of home renovations and repairs. |
| 5. Wedding | To cover the cost of events such as wedding, engagement, etc. |
| 6. Medical Emergency | To arrange finances for medical and educational expenses. |
| 7. Education | To handle the cost for higher education of children. |
Things to Consider before You apply for a Personal loan
Below-mentioned are things to keep in mind before you drop a personal loan application:
| Things to Consider Before Application | Details |
|---|---|
| 1. Compare Banks and Financial Institutions | Before applying for the loan, you must compare personal loan schemes across banks and NBFCs. Go through details such as interest rate, loan amount offered, eligibility criteria, repayment tenure, fees, charges, and other terms and conditions, before selecting a particular loan scheme and provider. |
| 2. Credit Score | Your credit score must be 650+to avail the loan. |
| 3. Documents Required | You have to submit income proof, identity proof, residence proof, and other necessary documents as required by the fund-provider. Keep a soft-copy of these documents with you if you are applying online. If applying offline at a branch-office, you will require xerox of the original documents. Carry the original documents for verification. |
| 4. Annual Percentage Rate (APR) | Know APR of loans online. APR is the total cost of loan as per the annual interest. |
| 5. Other Fees and Charges | Apart from the interest rate on the loan, you should also check for other fees and charges applicable, such as original fee, late payment charges, prepayment or foreclosure charges etc. These charges influence the total cost of the loan. |
Personal Loan Eligibility Criteria
Below-mentioned are the personal loan eligibility norms:
| Things to Consider Before Application | Details |
|---|---|
| 1. Age | You must be above 21 years of age. |
| 2. Income | Your net monthly income must be at least Rs. 25,000. |
| 3. Credit Score | A credit score of 650+ is considered as a good credit score to avail the loan. |
| 4. Employment History | Minimum work experience of 1 year is preferred. You must be able to provide income proofs. Cash salary is not acceptable. |
| 5. Ongoing EMIs | As a thumb rule, on-going EMIs should not be more than 60% of your income. |
Documents Required for Personal Loan
Here is a list of documents needed for salaried, professional, and self-employed applicants for a personal loan:
| Documents Required | Individuals | Self-employed, Firms, Partnerships |
|---|---|---|
| Filled and signed application form | It is required | It is required |
| Proof of Identity | PAN card, Driving License, Passport, Voter ID, Govt issued i-card, Aadhaar Card | PAN card, Driving License, Passport, Voter ID, Govt issued i-card, Aadhaar Card |
| Proof of Income | Last 6 months salary slip, last 2 years Form 16, bank account statement of the last 6 months reflecting credited salary | Bank account statement of the last 6 months and last 2 years ITR |
| Proof of Address | Driving License, Election ID card, Passport, Telephone/bank statement Electricity/ Mobile bill (latest up to 3 months old) | Utility bill/bank statement latest up to 3 months old, TAN allotment letter, lease or rent agreement, registry copy |
| Proof of Age | Birth certificate, School/college leaving certificate, Passport, Driving License, PAN card, Voter id card, Employee ID card (only for PSU/ Government employees) | Birth certificate, School/college leaving certificate, Passport, Driving License, PAN card, Voter id card, Employee ID card (only for PSU/ Government employees) |
| Certificate and Business Existence Proof | Certificate of practice, PAN, VAT/ sales tax/ excise/service tax registration, Trade license, Copy of partnership deed, registration certificate issued by RBI, SEBI |
Personal Loan Interest Rates
One of the important things to do before applying for personal loans is checking the interest rates offered by banks and NBFCs. The Personal Loan Interest Rates will differ from a financial institution to another on grounds of your individual profile, repayment capacity, income, required loan amount, loan tenure, credit score, and other factors.
| Interest Rate | Starting at 10.50% onwards |
|---|---|
| Processing Fees | 1% to 3% of the borrowed principal amount |
| Loan Tenure | 1 Year to 5 Years |
| Pre-closure Charges | May vary from one lender/Bank/NFBC to other |
Personal Loans Interest Rates by Top Banks and NBFCs - Oct, 2020
| Bank | Loan Amount | Personal Loan Interest Rates | Lowest EMI per lakh for 5 years Tenure |
|---|---|---|---|
| SBI Personal Loans | Upto Rs. 20 lakhs | 10.50% - 11.20% onward | Rs. 2,149 |
| HDFC Bank Personal Loans | Upto Rs. 40 Lakhs | 10.75% onward | Rs. 2,162 |
| Muthoot Finance Personal Loan | Upto Rs. 10 Lakhs | 14% onward | Rs. 2,327 |
| Small Business FinCredit (SBFC) Personal Loan | Upto Rs. 10 Lakhs | 13.75% onward | Rs. 2,314 |
| ICICI Bank Personal Loans | Upto Rs. 20 Lakhs | 11.25% onward | Rs. 2,187 |
| Axis Bank Personal Loans | Upto Rs. 15 Lakhs | 12% onward | Rs. 2,224 |
| RBL Bank Personal Loans | Upto Rs. 20 Lakhs | 14% onward | Rs. 2,327 |
| Kotak Bank Personal Loans | Upto Rs. 15 Lakhs | 10.99% onward | Rs. 2,174 |
| Capital First Personal Loans | Upto Rs. 40 Lakhs | 10.75% | Rs. 2,162 |
| Tata Capital Personal Loans | Upto Rs. 25 Lakhs | 10.99% onward | Rs. 2,174 |
| Bajaj Finserv Personal Loans | Upto Rs. 25 Lakhs | 12.99% onward | Rs. 2,275 |
| Fullerton India Personal Loans | Upto Rs. 20 Lakhs | 12.99% onward | Rs. 2,275 |
Personal Loan EMI Calculation
The online personal loan EMI Calculator helps to calculate the monthly instalment amount that you have to pay towards repayment. On the calculator enter the desired loan amount, interest rate, and tenure.
- The EMI (equated monthly instalment) calculator displays a detailed repayment table. It shows a break-up of the Total Payment (Principal + Interest)
- It also shows the amortization schedule. This payment schedule shows the interest and principal amount that you have to pay separately over a selected tenure.
- You will get an exact idea of the opening balance, equated monthly instalment, break-up of interest and principal, and the outstanding loan amount.
Personal Loan Illustration
We have provided an example of the total cost of a personal loan:
- Principal Borrowed: Rs. 1 Lakh
- Tenure: 5 years
- Interest Rate: 11%
- Processing Fee: Rs. 2,000
- Loanbaba Service Fee: No fee
- EMI: Rs. 2,174 (as per 5 years tenure)
- Total Interest Payable: Rs.30,455 in 5 years
- Total of Payments: Rs. 1 Lakh Principal + Rs.30,455 Interest = Rs.130,455 + Rs. 2,000 Processing Fee = 132455
Pre Part-Payment and Foreclosure in Personal Loan
A personal loan comes with a fixed tenure. The tenure is the repayment period. You are expected to repay the debt via EMIs within this fixed tenure. But anytime if you want to repay the loan sooner than the end of repayment period, you can opt for: Part pre-payment or Foreclosure.
| Details | Full Pre-payment/Foreclosure | Part Pre-payment |
|---|---|---|
| What is? | If you pay off the entire outstanding before the end of tenure, then it is known as full pre-payment or foreclosure. | If you pay a part of the outstanding amount before the tenure’s end, then it is known as part pre-payment. |
| Benefits |
One of the benefits of foreclosure is that you save on the interest payout. You can also save on the prepayment interest if the lender does not charge an interest on foreclosure of the loan. |
One of the benefits of part pre-payment is that you can use excess funds in hand to pay a portion of the outstanding amount. Thus, any interest thereby charged would be on the reduced outstanding principal amount. So, you can expect the EMI amount to also reduce. Also, the total interest payout will also decrease. |
| Precautions |
However, if the lender charges a penalty on foreclosure, then you may have to pay a good amount of interest. This is why before foreclosing a loan, check the factors related to it. Full pre-payment may not always be the right option. |
Several lenders charge a fee for part-payment. You need to check the charge for part-payment and analyze if it is the best to pay off a portion of the outstanding principal or not. |
Why Choose Loanbaba to Help You Find a Personal Loan?
We at Loanbaba offer you personal loan offers from top banks and NBFCs in India. Being one of the leading FinTech firms, and an online platform that helps one access secured and unsecured loans, we ease your borrowing decision. Some of the features you can use for free on our website are as follows.
- Guaranteed Privacy and Transparency: We send your personal loan application to the bank/NBFC electronically. There is no risk to your privacy. Information you share with us is never shared with any unconcerned party.
- Grab Instant Quotes from Top Lenders: You will get instant quotes, interest rates, and offers from popular banks and NBFCs on our website.
- E-approval Within No Time: You may login to your account on Loanbaba to track your loan application. Most of the banks/NBFCs provide a lending decision in a matter of only 48 hours.
- Free-of-cost Financial Tools: You can check your loan amount eligibility with the help of an Eligibility Calculator. Also, you can calculate the EMI for the month with the EMI calculator. Both these financial calculators are available on our website, free of any charge.
- Top Notch Customer Service: You can get in touch with us on our toll-free number or email id for queries related to personal loans or any other financial product we offer. Our customer care team is quick to respond and offer you the best solution.
How to Apply for a Personal Loan on Loanbaba?
To apply for personal loan at Loanbaba:
- Scroll to the top of the page and drop your loan application online.
- Fill the details asked such as your name, loan amount required, employment status etc.
- You can check the top banks and NBFCs for personal loans in India and apply for paperless loans today to get immediate quotes.
- For any help, get touch with us at +91 7875380889/7057280385 or email on customersupport@loanbaba.com.
Frequently Asked Questions on Personal Loans
Given below are some of the FAQs on personal loans in India:
EMI is influenced by the loan amount, tenure, and interest rate. A longer tenure will entail a lower EMI, but a higher interest payout, increasing the cost of the loan. If you can afford to pay larger EMIs, then you should choose a shorter tenure to save on the total interest payout. This will help reduce the total cost of the loan. Other factors apart from the EMI that you must consider are: processing fee, foreclosure fee, reputation and services provided by the bank/NBFC, etc.
You can borrow between Rs. 1 lakh and Rs. 1 crore from banks and NBFCs.
- Analyze your need for the funds. Determine the loan amount you require.
- Check your credit score and history. Make sure you have a good credit score for maximum chances of getting the loan approved.
- Research well on the interest rates offered by different banks and NBFCs. Select an offer with an affordable interest rate.
- Choose a loan tenure to assess your repayment ability and understand the monthly instalment you have to pay,
- Compare other charges such as the processing fee, foreclosure fee, penalties, etc.
- Finalize the institution from which you will take the loan.
- At the time of the loan agreement, carefully review the fine print of the document.
Here are a few tips for a successful personal loan application:
You do not need a guarantor or security to apply for a personal loan.
If your documents are in place and you fit the bill of the bank/NBFC, then you can get personal approval in as less as 24 hours. After this, the funds will be credited to your bank account within as less as 48 hours.
You have to pay instalments every month towards the loan repayment. You can transfer the EMI electronically via a bank transfer (NEFT/RTGS/IMPS), provide post-dated cheques to the bank for repayment, pay the EMI on the portal of the financial institution, or any other indicated repayment method.
- Maintain a good CIBIL score (preferably over 750) to get the best personal loan offer.
- Improve your repayment capacity by closing ongoing loans at the soonest. This will help increase your disposable income and repayment ability for a new loan.
- If you are an existing customer of a bank/NBFC, you can get a lower rate offer on the loan.
The processing fee on a personal loan varies from a lender to another. However, the approximate amount is 2% to 3% of the borrowed sum.
As a borrower, you can avail an additional loan amount with the top-up facility. This facility is over your existing loan. The interest rate charged on the additional amount could be the same or 1% more than the existing rate. The tenure of the top-up loan is the same as the current tenure of the existing loan.
You can transfer your personal loan balance from your existing lender to another lender. Usually people opt for a balance transfer because the new lender has a better interest rate or service offer. Here the new lender will help you with the formalities to wrap up with the old lender. The new lender will offer you balance transfer service at a lower interest rate or a better offer for a fixed tenure.