What is Personal Loan?

Personal loan is an unsecured loan taken by individuals from a bank or a non-banking financial company (NBFC) to meet their personal needs. It is provided on the basis of key criteria such as income level, credit and employment history, repayment capacity etc.

A Personal Loan works pretty much the same way as most loans. You apply for a loan, submit the documents, the bank checks your creditworthiness and makes a loan offer. If you accept it, the funds are transferred to your bank account, and you can use them any way you like. Creditworthiness is determined by various factors like your income stream, any other loans you might have, and last but not the least, your credit score. Individuals are allotted a credit score by an organisation called CIBIL, which shares the information with banks. Credit score depends on your record of paying credit card bills and loan repayments on time. Higher the credit score, higher your chances of getting a Personal Loan.

Who can get a Personal Loan?

Profession- Salaried persons working in government, private or MNC companies and self employed professionals like Doctors, CA, CS, Architects

Age- 21 years to 60 years

Minimum Income- Rs. 15,000 per month for salaried; Rs. 5 Lakh gross annual receipts for professionals

Work Experience Required- 3 years and above

Minimum CIBIL Score- 650

Maximum EMI as percent of Income- 65%


Documents Required to apply for a Personal Loan.

List of documents for Salaried

  • Proof of Identity:- Passport / Driving License / Voters ID / PAN Card (any one)
  • Proof of Residence:- Leave and License Agreement / Utility Bill (not more than 3 months old) / Passport (any one).
  • Latest 3 months Bank Statement (where salary/income is credited).
  • Salary slips for last 3 months.
  • 2 Passport Size photographs.

List of documents for Self-Employed

  • KYC Documents : Proof of Identity; Address proof; DOB proof.
  • Proof of Residence:- Leave and License Agreement / Utility Bill (not more than 3 months old) / Passport (any one).
  • Income proof (audited financials for the last two years).
  • Latest 6 months Bank statement.
  • Office address proof.
  • Proof of residence or office ownership.
  • Proof of continuity of business.