All you need to know about Personal Loan

What is Personal loan?

Personal Loan is a loan taken by an individual to support his immediate financial requirements like buying vehicle, gold, home renovation, and medical emergency. Personal loan comes in handy with no pledging of documents and attractive interest rates with pre-closure options.

Need for Personal Loan

• Wedding
• Renovation of home
• Consumer durables,
• Buy vehicle
• Vacation
• Startup 

How to apply Personal Loan?

Personal loan can be applied online or offline based on banks that you would opt.

Criteria for applying Personal loan

• People who are interested to take up personal loans must fulfill below conditions
• Salaried employee where salary is above 25,000/- per month
• People who do business should have filed IT returns for 3 years and have a minimum turnover defined by the bank

CIBIL score

Credit information Bureau Limit tracks repayment history of bank customers’ loans, credit cards and further banking finances. It is very important to check the credit worthiness of customer before issuing a loan.

CIBIL score ranges from 300-900, more the credit score more the credible customers to disperse the loan.

Amount limit for Personal loan

Limit for personal loan ranges from Bank to Bank, starting from 50,000 to 20,00,000

How to Calculate EMI

EMI is calculated using the formula: P x R x (1+R)^N] / [(1+R)^N-1]

P= Principal or your loan amount

R= Rate of interest

N= Tenure (loan term in number of years)

Rate of Interest on Personal Loans from Different Banks

Bank Name	Personal Loan Interest Rate
Axis Bank	11.25%
HDFC Bank	11.25%
ICICI Bank	11.25%
Bajaj Finserv	11.99%
Citibank	10.99%
IDFC First Bank	11.50%
State Bank of India	12.50%
Tata Capital	11.75%
Fullerton India	17.25%
IndusInd Bank	11.00%
Kotak Bank	11.49%
RBL Bank	13.99%
HDB Financial	13.99%
PNB	12.00%
Yes Bank	10.99%
Bank of Baroda	11.60%
Standard Chartered Bank	10.99%
Canara Bank	13.00%
Corporation Bank	12.95%
Federal Bank	11.49%
IDBI Bank	13.20%

Documents need to submit for personal loan

1. Salaried Customers
   • Latest 3 Months Salary Slip
   • Adhaar number
   • Pan Card
   • Address Proof – Driving License/Passport
   • 3 Months Bank Statement
   • 2 Passport Photographs
2. Business Customers
   • 3 Years IT Returns
   • Firm Establishment documents
   • Adhaar Number
   • Pan Card
   • Address Proof – Driving License/Passport
   • Office Address – Rent Agreement/Establishment Agreement
   • 2 Passport size photographs

Loan Transfer from existing Bank to another Bank

Yes, You can transfer the loan balance from bank to another bank

Tax exemption for personal loan

No, Tax exemption is only for Home or Education loans.

Long tenure to have less EMI amount

It depends on individual’s repaying capacity and longer the tenure, you will tend to pay more interest to the bank.

Personal loan Pre-closure

Yes, Customers can pre-close their loans with pre-closure charges set by the bank

Number of days for loan disbursement

Loan disbursement may happen within 24 to 48 hours depending on complete submission of the documents required from the bank

What will happen if I don’t pay the loan for 6 months?

If customer doesn’t pay loan for 6 months, a notice will be issued to him to pay the dues immediately, if failed to pay then banks may opt for legal action