Personal Loans
Personal loans are a great way to get money for various needs, whether it's paying off debt, making a big purchase, or handling unexpected expenses. Let's break down what personal loans are, how they work, and why they might be right for you.
| Lender Name | Interest Rates (%) | Loan Amount | Processing Fees | Prepayment Charges | Apply Now |
|---|---|---|---|---|---|
| Yes Bank | 10.75 - 18.00 | Up to ₹40 lakhs | 1% of the loan amount + GST | Nil - Up to 2% of the principal outstanding + GST | Apply Now |
| HDFC Bank | 10.75 - 14.50 | Salaried: Up to ₹50 lakhs | 2% of the loan amount or ₹3,500 (>=₹10 Lakhs) | Nil - Up to 4% of the principal outstanding + GST | Apply Now |
| Standard Chartered Bank | 10.75 - 13.00 | Up to ₹50 lakhs | 1% of the loan amount + GST | 1%-5% of the principal outstanding + GST | Apply Now |
| ICICI Bank | 10.50 - 18.00 | Up to ₹50 lakhs | 2% of the loan amount + GST or ₹3,500 (>=₹10 Lakhs) | 5% of the principal outstanding + GST | Apply Now |
| State Bank of India (SBI) | 9.60 - 13.60 | Up to ₹15 lakhs | Nil - 1% of the loan amount + GST | 0.99% to 2.50% of the loan amount + GST | Apply Now |
| Kotak Mahindra Bank | 10.99 - 20.99 | Above ₹20 lakhs | 0.99% to 2.50% of the loan amount + GST | 5% of the principal outstanding + GST | Apply Now |
| IDFC First Bank | 10.50 - 25.00 | Up to ₹1 Crore | 1% of the loan amount + GST | 5% of the principal outstanding + GST | Apply Now |
| SMFG India Credit | 12.00 - 24.00 | Up to ₹25 lakhs | 2% - 6% of the loan amount + GST | 0-4% of the principal outstanding | Apply Now |
| RBL Bank | 17.50 - 26.00 | Up to ₹20 lakhs | 2% - 2.5% of the loan amount + GST | 3%-5% of the principal outstanding | Apply Now |
| IndusInd Bank | 10.49 - 31.50 | Up to ₹25 lakhs | Up to 3% of the loan amount + GST | As applicable by the bank | Apply Now |
| Tata Capital | 10.75 - 18.00 | Up to ₹25 lakhs | 1% of the loan amount + GST | 4% of the principal outstanding | Apply Now |
| DCB Bank | 13.00 - 25.00 | Up to ₹5 lakhs | 2% - 3% of the loan amount + GST | As applicable by the bank | Apply Now |
Benefits
- Flexible Use: You can use the money for almost anything, from consolidating debt to paying for a wedding or covering medical bills.
- Fixed Payments: Since the payments are the same each month, it’s easy to budget and manage.
- No Collateral Needed: You don’t need to put up your home, car, or any other asset to get a personal loan.
Risks and Considerations
- High-Interest Rates: Low credit scores result in higher interest rates. Ensure timely payments to maintain a good score.
- Debt Burden: Only borrow what you can repay. Late payments incur penalties, increasing your financial burden.
- Credit Score Impact: Missed payments lower your credit score, making future loans difficult to obtain. Clear existing debts before applying.
- Hidden Fees: Be aware of additional charges like processing or prepayment fees. Inquire about all fees before committing.
- Fraud Risks: Only deal with reputable, RBI-recognized lenders. Avoid offers that seem too good to be true, and always verify authenticity.
Steps to Apply for a Personal Loan
- Check Your Eligibility
- Credit Score: Ensure your credit score is good, typically 700 or above.
- Income: Verify that your income meets the lender's requirements.
- Employment: Ensure you have a stable job or consistent income source.
- Choose the Right Lender
- Compare interest rates, tenure, and loan amounts from various lenders.
- Consider the reputation and customer service of the lender.
- Gather Necessary Documents
- Proof of Identity: Passport, Aadhar card, PAN card, or voter ID.
- Proof of Address: Utility bill, rental agreement, or passport.
- Proof of Income: Salary slips, bank statements, or income tax returns.
- Employment Proof: Offer letter or employment certificate.
- Photographs: Passport-sized photos.
- Fill Out the Application Form
- Visit the bank’s website or branch.
- Complete the application form with accurate personal and financial details.
- Submit Required Documents
- Attach the necessary documents as per the lender’s requirement.
- Ensure all documents are valid and up-to-date.
- Wait for Verification
- The lender will verify your application and documents.
- This might involve a credit check and background verification.
- Approval and Loan Disbursement
- If approved, you will receive a loan offer with terms and conditions.
- Review the offer carefully.
- Once you accept the offer, the loan amount will be disbursed to your bank account.
Tips to Increase Approval Chances
- Maintain a Good Credit Score: Regularly check your credit report and ensure timely payments to keep your score high.
- Reduce Existing Debts: Pay down current loans and credit card balances to improve your debt-to-income ratio.
- Stable Income: Ensure a stable and sufficient income to meet the lender’s requirements.
- Accurate Documentation: Provide all necessary documents accurately and completely.
- Loan Amount: Apply for a reasonable loan amount that aligns with your income and repayment capacity.
- Research Lenders: Compare offers from different lenders to find the best terms and conditions.
Improve Your Credit Score
- Check Your Credit Report: Regularly review for errors and dispute inaccuracies.
- Pay Bills on Time: Always pay credit card, loan, and utility bills by their due dates.
- Reduce Debt: Pay down existing balances, focusing on high-interest debts first.
- Limit New Credit Applications: Avoid frequent new credit inquiries.
- Increase Credit Limits: Request higher limits on existing credit cards without increasing spending.
- Maintain Credit Mix: Use a mix of credit types (credit cards, loans).
- Keep Old Accounts Open: Keep older accounts active to maintain a longer credit history.
- Use Secured Credit Cards: Build credit with secured cards if needed.
- Authorized User: Become an authorized user on someone else’s account with good credit.
Special Tips to Avoid Rejection
To avoid personal loan rejection, maintain a good credit score, accurately fill out your application, and provide all required documents. These steps will enhance your chances of approval.
Do's:
- Do thorough research before applying for a loan.
- Do read the fine print carefully.
- Do save money diligently while repaying the loan.
- Do pay your loan installments on time, every time.
- Do evaluate your credit score thoroughly.
- Do apply for a loan amount that you can afford.
Don't:
- Don’t sign loan documents without understanding every detail.
- Don’t make multiple loan inquiries from different banks.
- Don’t take a personal loan without a serious purpose.
- Don’t rush your loan comparison process.
- Don’t forget to pay your loan installments.
- Don’t accept unfavorable loan terms.
Things to Do After Closing a Personal Loan
- Collect No Dues Certificate (NDC): This confirms full repayment of your loan. Keep it safe for future reference.
- Get a Statement of Account (SoA): This optional document details your repayment history and can help fix any credit report errors.
- Retrieve Unused Cheques: Collect any remaining cheque leaves from your lender.
- Check Your Credit Score: Verify your credit score post-loan closure to ensure accuracy, especially if planning to apply for another loan soon.