Personal Loan: Overview
A personal loan is an unsecured loan provided by banks, NBFCs, or other financial institutions to individuals to meet personal financial needs—such as medical emergencies, travel, wedding expenses, education, home renovation, or debt consolidation. Since it's unsecured, no collateral is required.
Advantages of a Personal Loan
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No Collateral Required
You don’t need to pledge any asset or property. -
Flexible End Use
Funds can be used for any personal purpose without restrictions. -
Quick Approval & Disbursal
Many lenders offer same-day approval and instant disbursal, especially for pre-approved customers. -
Minimal Documentation
Simple paperwork and easy application process. -
Flexible Repayment Tenure
Tenure ranges from 12 to 60 months, depending on the lender. -
Improve Credit Score
Regular and timely repayment helps build or improve your credit history.
Eligibility Criteria for a Personal Loan
(Note: Criteria may vary from lender to lender)
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Age
21 to 65 years (self-employed)
21 to 60 years (salaried)
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Employment Status
Self-employed professionals or business owners
Salaried individuals working in government, public or private sectors
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Income Requirement
Minimum monthly income (usually ₹15,000–₹25,000 or more)
Income stability is key
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Work Experience/Business Vintage
Self-employed: Business operational for 2–3 years
Salaried: At least 1–2 years of total work experience
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Credit Score
A CIBIL score of 700 or above is usually preferred for approval and better interest rates.
Documents Required for a Personal Loan
1. Identity Proof (any one)
PAN Card (mandatory)
Aadhar Card
Passport
Voter ID
Driving License
2. Address Proof (any one)
Aadhar Card
Utility bill (electricity/water)
Passport
Rent agreement
3. Income Proof
For Salaried Individuals:
Latest 3–6 months’ salary slips
Form 16 or ITR
Bank statements (last 6 months)
For Self-Employed Individuals:
ITRs of last 2–3 years
Business income documents (Profit & Loss Statement, Balance Sheet)
Bank statements (6–12 months)