About Personal Loan

Personal loans are meant to meet short-term financial needs i.e. you can borrow money for a minimum period of one year to a maximum of five years. The needs may vary as needs may arise due to an unexpected medical emergency, going on a vacation, home renovation, buying consumer durables, repay credit card debt or any other personal exigency which has a temporary effect on your earnings.

Features & Benefits

With personal loans, you can take advantage of Flexible EMI plans, higher loan amount and flexible tenure options. Although, the quantum of personal loans to the customer depends on a number of factors such as borrower’s credit history, existing loans, company with which you are currently employed & the number of years of relationship with the bank etc.

Quick approval

A personal loan has the fastest loan disbursal time when compared with other loans. The whole process takes 2 to 3 days.

Multi-purpose loan

The personal loan provides complete flexibility of end-use. There are no restrictions on how you should ...more

Minimal paperwork

A personal loan requires very little paperwork when compared to other types of loans.

No security or collateral

If you are eligible, you are not required to provide any security or collateral to the lender in the form of shares or any other assets.

Flexible repayment options

The Personal Loans come with a host of repayment options such as post-dated cheques, online payment of EMI, ECS and so on.

Reasonable interest rates

Personal Loan comes with competitive interest rates that are easily affordable.

Eligibility & Documents Required

Eligibility Required

Any individual who is an Indian citizen or national and has residual income qualifies for the personal loan. By design Personal Loans are unsecured loans and therefore an applicant does not have to worry about furnishing paperwork related to collateral For getting a personal loan, you need to fulfill certain parameters as a part of the eligibility criteria.

Credit Rating or score
Income criteria
Age criteria
Employment stability
Existing EMIs
Employer

Credit Rating or score

The Credit score is an important factor for approval of your loan. Usually, an applicant’s creditworthiness is determined by evaluating his credit score i.e. CIBIL / EXPERIAN score. Loan applications of applicants having poor credit score may get rejected. It’s always advisable to keep on updating your credit score every now and then. If you have a bad credit score and somehow your loan application gets approved, you might be asked to pay a high rate of interest and be offered unfavorable terms and conditions on your loan as compared to someone who has an excellent credit score.

Document Required

The personal loan entails the simplest form of documents which can be divided broadly into two categories:-

  1. Documents for Salaried Individuals *
  2. Documents for Self-Employed Individuals *

Salaried Individuals
Self-employed Individuals

Salaried Individuals

Documents required for Salaried Individuals are as follows:-

  • Identity proof:- Any one of Aadhar Card / Voters ID / Passport / Driving License / PAN Card.
  • Residential proof:- Any one of Leave and License Agreement / Utility Bill (maximum three months old) / Passport.
  • Salary Slips:- Latest (last) three months' Bank Statement of the account in which salary or income is credited.
  • Employment certificates:- 2-year Employment continuity document
  • Photographs:- Two passport size photographs

*Note:- The required documents may vary from institution to institution. Every lending entity has their own criteria for documentation.

Interest Rate & Charges

The very first question that comes to our mind when we are looking for a personal loan is how much interest rate one would need to pay. Historically banks and other financial institutions have charged much higher interest rates in this category.

The table below shows the interest rates offered on Personal Loans by various banks as of March 2018.

Bank
Personal Loan Interest Rates*
Processing Fees
SBI 11.00% In the range of 0.5% to 1%
HDFC Bank 15.50% Up to 2.50% of loan amount (Min Rs. 1,999; Max Rs. 25, 000)
ICICI Bank 11.25% Up to 2.25% per annum of loan amount + GST
Bajaj Finserv 12.99% Up to 3.99% of the loan amount/td>
Citibank 10.99% Up to 2.0%
IDFC Bank 11.50% Up to 1% of loan amount
Axis Bank 15.75% Up to 2.00%
Tata Capital 11.25% Up to 2.5% + GST
Fullerton India 20.00% Up to 6.50%
IndusInd Bank 11.99% Min 1% to Max 2.50%
Kotak Bank 11.25% Up to 2.5% plus tax
RBL Bank 14.5% Up to 3%
IIFL 13% Up to 2% + GST
HDB Financial 13.99% Up to 2% of loan amount
Karur Vysya Bank 13.90% 0.30% (Min Rs. 500)
PNB 12.00% 1.80% + taxes
Vijaya Bank 12.90% 0.10%, Max. Rs. 10000 + ST
Union Bank of India 12.60% 0.50%, Min Rs. 500
Syndicate Bank 14.20% 0.50%, Min Rs. 500
Standard Chartered Bank 11.99% 0%
Indian Overseas Bank 12.45% 0.60%
Andhra Bank 12.85% Case to Case
Bank of Baroda 11.60% 2%, Min Rs. 250
Bank of Maharashtra 12.95% 1%, Min Rs. 1,000
Canara Bank 14.10% 1.0%
Corporation Bank 12.90% 1.50%, Min Rs. 500
Dena Bank 11.60% 2%
Federal Bank 10% 0.5%, Min Rs. 500
IDBI Bank 12.50% 1% + applicable taxes
Allahabad Bank 12.80% 1.06%, Min- Rs. 1068
Indian Bank 14.20% 0.51%, Min- Rs. 510
Yes Bank 10.75% Starting at 0.99%, Up to 2.5%

*Special Note:- Rates are subject to periodic changes. Personal loan interest rates and other fees/charges are subject to regular reviews and can vary from customer to customer - depending upon a number of factors ranging from credit score to existing loans, amount of savings, company with which you are currently employed, number of years of relationship with the bank or NBFC etc.

FAQ's

Q.
What is a personal loan?
A personal loan is the money lent to an individual from a bank or NBFC for a short-term at pre-determined interest rates. The money can be used to fulfill any immediate or critical needs of an individual.
Q.
Who can apply for a personal loan?
The product has been designed to service the salaried & self-employed individuals.
Q.
What is the meaning of EMI?
The term EMI stands for Equal Monthly Installment which includes both the principal and interest amounts.
Q.
Is there any guidance on how to utilize the Personal Loan amount?
There are many ways in which the personal loan amount can be utilized by an individual. For example, it can be used to address any medical exigency, pay your credit card bills, take vacations, getting your child admitted to a school, down payment on your car/vehicle, having a get-together, for marriage-related expenses and any other. A personal loan is the perfect solution to all your worries.
Q.
What is the minimum tenure one can take a personal loan for?
An individual can opt for a personal loan for a minimum period of 12 months.
Q.
What is the maximum tenure one can take a personal loan for?
Generally, The personal loan can be taken for a maximum period of 60 months.
Q.
List of the major financial institutions which are offering personal loans?
There are a lot of financial institutions comprising Banks & NBFCs (Non- Banking Financial institute) who are offering personal loans of all shapes and sizes to cater all set of customers. List of leading Institutions are as follows: -

HDFC Bank: - HDFC Bank personal loan is one of the most aggressive products amongst all the Private Sector Banks. Apart from offering the personal loan, they offer personal accidental coverage up to Rs. 8 lakhs along with critical illness cover of 1 lakh.
To know more about HDFC Bank Personal Loan click here

ICICI Bank: -ICICI Bank personal loans are being offered to the salaried class & self-employed individuals.
To know more about ICICI Bank Personal Loan click here

State Bank of India Bank: -State Bank of India being the largest Public Sector bank India is the most preferred bank when it comes to availing loans. Like its direct competitors, State Bank of India offers personal loans to both salaried and self-employed individuals such as chartered accounts, doctors, engineers and architects.
To know more about State Bank of India Personal Loan click here

AXIS Bank: -Axis Bank's personal loan is yet another popular product in the market. Their customer experience and overall approach towards the loan process makes them a force to reckon with. Not only this, they have a reward program which allows the customer to earn reward points on taking a personal loan from Axis Bank. This program is called as the Axis eDGE rewards.
To know more about HDFC Bank Personal Loan click here

Q.
Will I be charged a processing fee?
Yes, the banks & lending institutions charge processing fee which ranges from 1% to 3% of the total loan amount. You can negotiate with the bank and can expect to get a certain level of waiver on the processing charges if you have a strong portfolio & relationship with the institution is good.
Q.
Do I need a guarantor to take a personal loan?
Typically, there is no need to present guarantor to avail personal loan but there are certain lending institutes which may ask you to provide a guarantor to support your personal loan application.
Q.
Can I get an option to choose between a fixed interest rate or a floating interest rate?
Absolutely, you can make a quick choice between which interest rate mechanisms you want to go ahead with. Please be mindful of what you choose because different interest regimes have their own advantages and pitfalls.
Q.
How important is it to have a healthy CIBIL score?
It is very important indeed to maintain a healthy CIBIL score. Nowadays almost all the banks and NBFCs check the customer's CIBIL score beforehand. In case, your CIBIL score is not at par or above the Bank's approved score limit, your loan application might get rejected. A CIBIL score above 750 is considered a good score.
Q.
How can I apply for a personal loan which will give me possibly the best loan deal?
Nowadays applying for a loan online is the best way to apply for a personal loan. You can visit www.afinoz.com and enter your credentials to get the best possible solutions for your need at the click of a button from the comfort of your home 24 x 7.
Q.
How much time does it take to get the loan approved?
Different Banks and NBFC have different timelines for approval for different loans, so it depends entirely on the bank you are applying to. Typically, the customer can expect to get his loan approved within 48-72 hours of loan application submission.
Q.
How many days does it take to get the loan disbursal done?
Different Banks and NBFC have different disbursal guidelines and timelines. Disbursal of loan post sanction can take upto 7 days from the date of sanction.
Q.
Can I track my loan application?
Surely you can. Once you have logged your personal loan application with Afinoz, you will be issued a unique transaction ID. This ID can be used to track your application on www.afinoz.com. We also send SMS alerts to our customer on their registered mobile number informing them about the progress of their loan application, and these alerts carry the real time status of the application.
Q.
How to avoid loan rejection?
Afinoz ensures that the customer's application is processed and sent to institutions wherein the customer's profile would qualify for the loan. It is unlike dealing with other agents who send out your application without understanding your profile or credit score to multiple ineligible banks / NBFCs. This results in rejected applications from various institutions and also degrades your credit score.
Q.
Will Afinoz charge any fee from its customers?
All our services rendered to our customers are free of cost meaning Afinoz will not charge any commission or processing fee from its customers at any stage of the process. Be wary of unknown callers who may use our name and ask you to pay certain fees for your case or loan application.
Q.
What are the different types of personal loan?
One of the greatest advantages of a personal loan is that it can be used pretty much for any purpose, with no restrictions whatsoever on the type of end-use. Different types of personal loan are available to give you the absolute freedom to use a personal loan for different purposes :-
  1. Wedding loan- You can avail a personal loan of this type to meet sudden and out-of-the-budget expenses , which is so common during a wedding in your family.
  2. Two-wheeler loan- With an instant personal loan in this category, you can fulfill your desire to own a bike of your choice. Up to 100% funding is offered for this personal loan type.
  3. Home renovation loan- This is another personal loan type offered by many lenders to help you finance your home improvement work, which can be a costly affair, at times.
  4. Medical Emergency loan- Now you can easily counter a fund crunch which is so common in case of a sudden and unexpected medical emergency in family with a medical emergency loan. This is an instant personal loan scheme usually provided at low personal loan interest rates.
  5. Festival loan- This type of personal loan helps you to cover the festival expenses of an individual. Festival loans allow you to celebrate the festive season in full vigour, without any dip in your spirit.
  6. Travel loan- Fund your dream holiday with a travel loan. This personal loan for travel gives you instant funds so that the fear of expenses cannot dampen your spirits.
Q.
How to use Afinoz EMI calculator?
The Afinoz personal loan EMI calculator is an excellent tool where you can calculate your EMIs online. Your personal loan EMI will be displayed within just a minute. But you need to feed certain variables into it as inputs (in the appropriate spaces provided) before it produces the final result for you accurately.

a) Loan amount This is the amount you need to borrow from the lender and the interest is calculated from this amount. Higher is your personal loan amount, more you need to pay every month as EMIs.

b) Loan tenure This is the total time period within which you wish to repay your loan amount. Lenders often specify a range within which you need to pay back the personal loan amount, which may go up to 5 years. The longer is your personal loan tenure, the more will be the personal loan interest rates you need to pay. This, in turn, will increase your personal loan EMI outflow too. Therefore, you need to select a loan tenure so that your EMI remains in the affordable range.

c) Interest Rate It is the agreed rate at which the interest will be charged on your personal loan amount. The personal loan interest rates vary as per the loan amount and from lender to lender. It is imperative that you compare the personal loan interest rates offered by different lenders before making your final decision.

Q.
How to improve your chances of getting a personal loan?
Many personal loan applications get rejected as loan applicants are not able, at times, to fulfill the stated requirement criteria. You should check the following points before applying to a particular personal loan provider and to improve your chances of getting a personal loan.

Check your credit score

If you are not mindful of your credit score while applying for a personal loan, your loan application might get rejected. Even if your loan application gets approved somehow, you may be asked to pay a higher personal loan interest rate and may be offered unfavorable terms and conditions when you apply for personal loan, as compared to those borrowers with excellent credit scores.

Obtain your credit report, to identify your credit score and rectify errors, if any. You should take care to pay all your dues on time as your payment history takes care of 35 % of the credit score. A decent credit score can boost your chances of loan approval a great deal.

Have a check on your outstanding debt

Along with your income, your debt-to-income or DTI ratio gives an important account of how much your affordability is for borrowing a personal loan. It also indicates to the lenders whether you can pay the personal loan amount every month and whether you are responsible enough in handling your money.

A high DTI percentage shows that you are using a considerable part of your income to pay your existing debts. Hence, check your DTI and if it’s over 43 %, consider paying off some of your existing debts.

Provide truthful information

Personal Loan providers verify the information provided by you through supporting documents. They may possibly give you a call to verify your information personally. Therefore, you must provide factual information about your residential details, annual income, past loan repayments etc.

Aim for a realistic loan amount

Often, many borrowers apply for an extremely huge amount which is mostly rejected by the lender. It is crucial to recognize how much you need to borrow.  Most lenders conduct a check of your income and repayment ability before approving your loan. Thus, aim for a reasonable amount in order to avoid loan rejection.