Personal Loan is a collateral free loan based on income documents of individual. Since this is an unsecured loan thus the borrowers past track records of loans & credit score has to be good.

A personal loan refers to money that is borrowed from a financial institution, for personal use. In opposition to larger and long-term loans, personal loans are taken into relatively short to medium terms. Generally personal loans are used to pay for one-time or short term expenses where a borrower doesn’t normally require disclosing the specific reason for the loan. This type of loan is used by many to resolve their current financial needs.

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Personal loan eligibility factors

Particulars

Salaried

Self-Employed

Age

21 – 60 years

21 – 65 years

Minimum Income

Rs. 35,000 per month

Rs. 6 lakh per year

Total experience

Minimum 2 years

Minimum 2 years in current business

 

  

 

Pay up to 45%* lower EMIs

Meet your expenses with a Flexi Personal Loan and reduce your instalments by up to 45%*. Borrow money as and when you need from your sanction, without the need for multiple applications and additional documentation.

Money in bank within 72 hours*

Finaider offers the fastest personal loans in India – with disbursal in just 72 hours* of your loan getting approved.

Flexible tenor

Repay your loan with ease with flexible repayment tenor ranging from 12 to 60 months

  

No hidden charges

What you see is what you get. With easy to understand terms and conditions, our Personal Loan is transparent and comes with zero hidden charges.

Online process with minimal documentation

Apply for a personal loan online in few clicks. Complete the application process by submitting only a few basic documents and get instant loan approval.

High loan amount

You can get an instant personal loan of up to Rs.25 lakh based on your eligibility.

Frequently Asked Questions!

(Before  Applying)

Q1. Why should I apply for a personal loan?
  • You should apply for a personal loan because of the following reasons:

 

  • No collateral needed: A personal loan is an unsecured loan, so you do not any collateral/security to avail a personal loan.
  • Flexible end use: Unlike a car loan or a home loan, a personal loan can be used for various purposes, ranging from medical emergency expenses to home renovation.
  • Minimal documentation: The documentation process to avail a personal loan is far simpler and faster that the process to avail a secured loan.
  • Debt consolidation: You can consolidate multiple loans and/or credit card dues by taking a personal loan. This will not only make debt repayment easier but will also help you to save on interest payout.
Q2. What is the minimum salary required to get a personal loan?
  • The minimum monthly salary requirement to avail a personal loan varies from lender to lender. However, it generally ranges between Rs. 25,000 and Rs. 50,000 per month.
Q3. What is the best credit score or CIBIL score to get a personal loan?
  • Credit score is a 3-digit number that ranges between 300 and 900. It serves as a measure of creditworthiness and financial health of an individual. Thus, higher the credit score, greater are the chances of getting a personal loan approved.  Generally, a credit score of 750 and above is considered good. You can improve your credit score by paying credit card bills on time, decreasing your outstanding debt and maintaining old credit card accounts in good standing.
Q4. What role do credit history and score play in getting a personal loan?
  • Your credit history and credit score reflect your handling of credit in the past. Hence, they not only affect the chances of being approved for a personal loan, but often impact the rate of interest too. Higher the credit score, greater are the chances of approval and receiving a lower preferential interest rate.
Q5. Can I get a personal loan being a pensioner, if I have a pension account with one of the leading banks in India?
  • Yes, you can get a personal loan even as a pensioner, if you have a pension account with one of the leading banks. However, you should ensure that your bank offers personal loans to pensioners and you meet the eligibility criteria as specified by your prospective lender.  
Q6. Can a student apply for a personal loan?
  • Generally, students are not eligible for a personal loan as a stable source of income and a good credit score are necessary pre-requisites. However, if you have a stable monthly income and fulfill the lender’s other eligibility criteria, you may easily avail a personal loan.
Q7. What is the minimum score to get a personal loan?
  • It depends on the eligibility criteria set by the lender. Most lenders do not specify a minimum credit score for a personal loan. Some lenders might lend money to applicants with low credit score (less than 750) but the interest rate applicable is usually higher in such cases.
Q8. Can I get a personal loan if I have a home loan?
  • Yes, you can apply for a personal loan even if you already have a home loan. However, the chances of getting the loan approved will depend on your repayment capacity, which in turn depends on your monthly income and credit score.
Q9. Can self-employed individuals apply for a personal loan in India?
  • Yes, self-employed individuals like businessmen, doctors, chartered accountants, etc. can apply for a personal loan in India provided they meet the eligibility criteria. Moreover, some banks and NBFCs provide special personal loan offers for doctors, chartered accountants and businessmen.
Q10. Can I get personal loan without a salary slip?
  • Yes, you can get a personal loan without providing salary slips. You can submit your bank account statement/ a copy of Form 16/ employee certificate from the employer, etc. as a proof of income to fulfil the eligibility criteria. However, it is always recommended to confirm the list of required documents with the lender as it may vary from one bank to another.
Q11. Can I use a personal loan for marriage purpose?
  • Yes, you can avail a personal loan to meet marriage related expenditure as personal loans come with flexible end use. Some lenders even provide personal loans specifically named as wedding/ marriage loans.
Q12. Can I take a personal loan from two different banks at the same time?
  • Yes, you may avail a personal loan from two different lenders at the same time. However it is not advised to do so, as it will not only affect your credit score but will also increase your EMI payout. It will be better to take one personal loan of a larger amount than two personal loans of smaller amounts. This way you can pay lower EMIs for a longer tenure and also improve your credit score. Moreover, you will save upon processing fees and other loan related charges.
Q13. Which is better, a personal loan or a credit card?
  • Both personal loan and credit card are means of borrowing money. Which one is better depends on the purpose behind borrowing money. If you need to borrow a fixed amount for a finite period of time, go for a personal loan. On the other hand, if you want revolving credit for lifetime, go for a credit card. However please note that the rate of credit cards is higher than the Personal Loan.
Q14. Is it good to pay off credit card debt with a personal loan?
  • Yes, it is often a good idea to pay credit card dues with the help of a personal loan as: It allows you to consolidate the debt associated with multiple credit cards, which in turn will make the repayment process easier.
  • The rate of interest applicable on a personal loan is lower than that applicable to the outstanding balance on a credit card. Thus, taking a personal loan also helps you save on the overall interest cost.
Q15. What is the difference between reducing balance rate and flat interest rate? .
  • In case of reducing balance method, interest is applicable on the outstanding loan balance i.e. on the balance that remains outstanding after getting reduced by the principal amount repaid. As a result, the interest cost keeps decreasing over the loan tenure. On the other hand, flat interest rate is charged on the entire loan balance throughout the loan term. Thus, the interest payable does not decrease over the loan tenure
Q16. Should I always choose the lowest possible EMI before accepting a personal loan offer?
  • Low EMI offers are a result of either low interest rate or a long repayment term and sometimes both. Thus before selecting a personal loan offer, you should consider both interest rate and loan tenure. It is possible that the lender offering the lowest EMI is also offering the longest tenure, which in turn may increase your total interest payout. On the other hand, a personal loan offer with a relatively higher EMI but a shorter tenure may actually prove more economical in terms of total interest paid. Thus, you should always calculate your total interest payout and also take into account your repayment capacity before selecting a specific loan offer.

 

Q17. Which documents are required to apply for a personal loan?
  • The documents required to avail a personal loan vary from lender to lender. However, most of the banks and NBFCs require a proof of identity, a proof of address and a proof of income.
Q18. How should I choose the best personal loan offer?
  • With a plethora of personal loan offers available, choosing the best one can be challenging for some people. But worry not and follow the below tips to choose the best personal loan offer:

 

  • Compare interest rates: Do not go for the first offer that comes your way. Always compare personal loan interest rates offered by different lenders before choosing a deal.
  • Compare other loan fees and charges: Do check the associated loan charges and fees before settling for an offer as they might affect your budget despite a low rate of interest.
  • Check for repayment flexibility: Check for prepayment and part-payment options and the associated charges to better plan your repayment schedule.
  • Calculate EMI payout beforehand: Before you apply for personal loan, you need to be sure that you will be able to repay the loan on time without any penalties.
Q19. How can I avoid personal loan rejection?
  • While getting a personal loan application approved completely lies in the hands of the lender, the below steps can be followed to avoid rejection:
  • Carefully check the eligibility criteria set by the bank/NBFC and ensure you meet them. Check for inaccuracies in your credit report as they might affect your credit score and hence your chances of getting a personal loan. Reduce your outstanding debt by paying any existing loan installments and credit card dues. Keep your credit utilization ratio below 40%. Avoid multiple loan applications at once.
Q20. How can I bargain for a better rate of interest on my personal loan?
  • You can get a lower rate of interest on your personal loan by following the below tips:
  • Maintain a good credit score as it is suggestive of financial stability and repayment capability. Higher the credit score, greater are the chances of availing a personal loan at a lower rate of interest.
  • Apply for loan at a bank with which you already have a savings account or fixed deposit. Good pre-existing relationship with the lender has a positive impact on your repayment ability, which may help you to get a loan at a lower rate of interest.
  • Banks and NBFCs often release special personal loan offers during festive season. These offers generally have an attractive rate of interest. Thus, applying for a personal loan during the festive season may help you get a loan at a lower rate of interest.
Q21. What is the impact of GST on personal loans?
  • The impact of GST on personal loans has not been much as it is not levied on EMIs. However, the service tax has increased from 15% to 18%. As a result, the one-time costs including processing fee, prepayment charges, etc. will rise.

Frequently Asked Questions!

(While  Applying)

Q1. Which documents are required to apply for a personal loan?
  • The documents required to avail a personal loan vary from lender to lender. However, most of the banks and NBFCs require a proof of identity, a proof of address and a proof of income.
Q2. How should I choose the best personal loan offer?
  • With a plethora of personal loan offers available, choosing the best one can be challenging for some people. But worry not and follow the below tips to choose the best personal loan offer:

 

  • Compare interest rates: Do not go for the first offer that comes your way. Always compare personal loan interest rates offered by different lenders before choosing a deal.
  • Compare other loan fees and charges: Do check the associated loan charges and fees before settling for an offer as they might affect your budget despite a low rate of interest.
  • Check for repayment flexibility: Check for prepayment and part-payment options and the associated charges to better plan your repayment schedule.
  • Calculate EMI payout beforehand: Before you apply for personal loan, you need to be sure that you will be able to repay the loan on time without any penalties.
Q3. How can I avoid personal loan rejection?
  • While getting a personal loan application approved completely lies in the hands of the lender, the below steps can be followed to avoid rejection:
  • Carefully check the eligibility criteria set by the bank/NBFC and ensure you meet them. Check for inaccuracies in your credit report as they might affect your credit score and hence your chances of getting a personal loan. Reduce your outstanding debt by paying any existing loan installments and credit card dues. Keep your credit utilization ratio below 40%. Avoid multiple loan applications at once.
Q4. How can I bargain for a better rate of interest on my personal loan?
  • You can get a lower rate of interest on your personal loan by following the below tips:
  • Maintain a good credit score as it is suggestive of financial stability and repayment capability. Higher the credit score, greater are the chances of availing a personal loan at a lower rate of interest.
  • Apply for loan at a bank with which you already have a savings account or fixed deposit. Good pre-existing relationship with the lender has a positive impact on your repayment ability, which may help you to get a loan at a lower rate of interest.
  • Banks and NBFCs often release special personal loan offers during festive season. These offers generally have an attractive rate of interest. Thus, applying for a personal loan during the festive season may help you get a loan at a lower rate of interest.
Q5. What is the impact of GST on personal loans?
  • The impact of GST on personal loans has not been much as it is not levied on EMIs. However, the service tax has increased from 15% to 18%. As a result, the one-time costs including processing fee, prepayment charges, etc. will rise.

Frequently Asked Questions!

(After  Applying)

Q1. What will happen if I don’t pay a personal loan EMI?
  • Missing a single EMI might not have a major impact on your credit score, however, missing multiple EMIs will. Repeated failure will not only affect your credit score but also increase your outstanding debt. In rare cases, preliminary notices can be sent by the lender mentioning the outstanding loan amount and penalty charges. The bank may also go for legal proceedings or approach the guarantor (if any).
Q2. What are the pros and cons of personal loan balance transfer?
  • It may happen that you took a personal loan at a higher rate of interest because you needed the funds immediately. However, you later find that other lenders are offering a lower rate of interest. In such a case, personal loan balance transfer is the most effective way to reduce your burden. Let’s look at the various pros and cons of balance transfer to help you take an aware decision:
  • Pros:
  • Lower rate of interest: You will have to pay interest at a lower rate to the second bank.
  • Shorter tenure/ Lower EMI: You may choose to pay the same EMIs for a shorter tenure or lower EMIs for the same tenure.
  • Cons:
  • Processing fees: You will have to pay processing fee to the second bank for balance transfer.
  • Prepayment Charges: You may have to bear the prepayment charges to the first bank. Thus, you should always do a cost benefit analysis before availing a personal loan balance transfer so that your savings on the interest component is greater than the processing fees and prepayment charges.
Q3. What do the terms settlement, default and closed mean with respect to a personal loan?
  • You may come across terms like settlement, default or closed with respect to your old or current loans/ credit cards while going through your credit report. These terms are in fact not specific to a personal loan and their meanings are as follows:
  • Settlement: This means that you were unable to pay off the loan amount. As a result you and your lender came to an agreement to pay only a portion of your dues instead of the entire outstanding amount. As much as 30% to 40% of your outstanding loan may be waived off by the lender as part of the settlement process. This should however be used as a last resort as it has severe adverse effect on your credit report.
  • Default: This means that you have defaulted on your loan, i.e., you have not paid your outstanding loan. Additionally, you and the lender were unable to come to an agreement regarding the outstanding dues. This is the worst possible outcome of taking a loan as it impacts your credit score severely and most lenders will deem you a risky borrower in the future.
  • Closed: This means that you have successfully paid off your loan. A successfully closed loan account helps maintain a good credit score and represents you as a low risk borrower to prospective lenders.
Q4. What does prepayment mean and are there any charges for it?
  • When a borrower pays off the loan amount before the designated due date, it is called prepayment. Yes, many banks and NBFCs charge a prepayment fee ranging from 1% to 5% on the outstanding principal amount of the loan.
Q5. What do partial prepayment and foreclosure mean?
  • Partial prepayment or part prepayment means when you pay off a part of your loan amount in advance, while foreclosure is when you completely pay off the loan amount before the due date.
Q6. What are the advantages of part prepayment and foreclosure?
  • Despite the associated charges, loan prepayment is an economically viable option. If you completely pay off/ foreclose the loan in advance, you save substantially on the interest component. Additionally, your outstanding debt decreases. On the other hand if you partly prepay the loan amount, you can choose to either reduce your EMI payout or the loan tenure. Moreover, the part prepayment also helps you save on the interest component and decrease the outstanding debt.
Q7. Can I cancel a personal loan after the loan amount is disbursed?
  • In some cases, you may cancel a personal loan after disbursal subject to terms and conditions of the lender. Loan cancellation will lead to cancellation charges and processing fee. Please note that all banks do not allow loan cancellation once the amount is disbursed. However, you can always prepay the loan amount as per the terms and conditions of the bank and save on the interest component.
Q8. What is a top up loan?
  • Top-up loan refers to the second personal loan that can be taken over an existing personal loan. The second loan can either be used to consolidate debt or to meet a new requirement.  
Q9. Is personal loan taxable?
  • No. You do not have to pay additional tax if you get a personal loan. In fact the interest payable on a personal loan may be eligible for tax deduction u/s 24b if you use the loan proceeds for the purpose of home remodeling/renovation. 
Q10. Can I transfer personal loan to another person?
  • Under current regulations it is not possible to transfer your personal loan to another person. However, some lenders do have the option of having a co-borrower/guarantor for a personal loan and in such cases, the co-borrower/guarantor will be required to repay the loan in case the primary borrower defaults!