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How To Get Personal Loan

how to get personal loan

Published on October 25th, 2021

Let us know what a personal loan is, eligibility, how to apply, and many more things related to it.

What Is A Personal Loan?

A Personal Loan is a loan taken from any bank or financial institution for one’s private use. There is no specific reason you need to declare for this type of loan, and you can take this loan to address any personal financial need; this is not the case with other kinds of loans where you generally must declare taking it towards a car/bike, home, etc.

It depends on the borrower how they utilize a personal loan, be it for a medical emergency, travel expenses, renovation for your house etc.

A Personal Loan also involves a very straightforward process, making it convenient for first-time borrowers. You can repay the loan in small instalments as per your convenience, and the EMI of this type of loan is also fixed so that you do not have the pressure of paying all the money in one turn.

How Do You Know Whether You Are Eligible To Take A Loan?

Once you have selected the loan amount, you can check your eligibility. Nowadays, many banks have a loan eligibility calculator using which, you can find out how much loan you can get based on your income.

It all depends on your income and how much loan the bank or any finance agency can give you. The better your re-payment record, the more loans you can get.

Now if you have two sources of earnings; one being a job, and the other from your own business from which you get a particular amount every month.

For salaried individuals, your minimum income should be 18000, while people running their business should earn at least 15000 per month to avail a personal loan. Basis your salary, the bank will decide how much loan can be given to you.

Planning To Repay Your Loan:

When applying for a Personal loan, you can select the EMI amount according to your convenience of paying it on a monthly. While choosing the EMI, take special care that the payment amount should be fixed so that your pocket and health are not affected.

How Can You Apply?

Depending upon where you apply for the loan, you can submit all the documents digitally or in person and get money directly in the account. All you need is your ID proof (PAN Card, Aadhar Card), Address Proof (Rent Agreement, Aadhar Card), Income Proof (Bank Statement), and a photograph.

Once the documentation is complete, the bank will check and approve your loan within a few hours, and you will get the loan within a few days in the account of your choice. The EMI due will also be taken from this account at a date agreed upon by you.

Personal Loan Interest Rate

A personal loan is a way to utilize tomorrow’s income today, but we must remember that the interest rates on such loans are also pretty high, so one should go for a loan only when there is no other better option. If you need capital to start a small business, then a loan will benefit you. Let’s talk about personal loan interest rates.

Getting a loan has become easy these days, provided your credit score is not too bad. Apart from banks, non-banking finance companies (NBFCs) also offer loans. Whenever it comes to loans, everyone is looking for low-interest rates.

At present, we must know financial institutions providing loans at an interest rate of less than 10 percent per annum.
However, to give rise to a duly informed decision, be conclusive to go through the specifications of Personal Loan Interest Rates and charges

Interest Rates For Tenures Of Up To 36 Months

  • Fixed-Rate Loan        1 Yr MCLR         Spread over 1 year MCLR        Effective ROI      Reset
  • Personal Loan             7.35%                  4.65%-13.65%                             12% to 21%         No reset

Why Choose A Personal Loan?

1. Multiple Uses

Your purpose behind taking a personal loan is not restricted by the bank or the lender. You can use this loan however you want. This is one of the most important things you need to know about this loan. In this, you can take a loan for any personal reason, and the bank or finance company will not decline as far as the eligibility criteria are met.

2. No Need For Any Guarantee

Often a guarantor is needed to take a loan, and something valuable is required, which you provide to the financial agency as a guarantee so that tomorrow if you are not prepared to pay back the loan due to any reason, that finance agency will provide you with that item at auction and recover its price. But you do not need any guarantor or guarantee while taking a loan.

3. Minimal Documentation

All loans involve a lot of paperwork. This work becomes a little less in Personal Loan applications, making them even more accessible. The general documentation includes:

● ID proof
● Address proof
● income proof
● photograph

4. Interest rate and loan repayment tenure

Usually, a loan is readily available, so many banks and finance companies charge it by increasing personal loan interest rates. Still, in this loan, you have to pay a low-interest rate.

Because you can decide on the repayment tenure of the loan according to you, the interest rates of your loan also keep fluctuating accordingly. This is the best option for those who are looking to take a short-term loan.

5. Quick Approval

It takes a maximum time of 2 to 5 days, and the loan amount gets directly into your account selected for EMI deduction.