What is a Personal Loan?
A personal loan is an unsecured loan that you can use for various purposes, such as covering emergency expenses, debt consolidation, or financing events like weddings. Unlike secured loans, personal loans don’t require collateral, making them accessible to a wider range of borrowers.
How Do Personal Loans Work?
To apply, you’ll need to provide information about your income, credit score, and employment history. Lenders assess your ability to repay based on these factors. Once approved, funds are disbursed, and you’ll start making monthly repayments based on a fixed or variable interest rate.
Types of Personal Loans
- Unsecured Loans: No collateral is required, but the interest rates may be higher.
- Secured Loans: These are backed by collateral and offer lower rates.
- Debt Consolidation Loans: Combine multiple debts into one, often at a lower interest rate.
Benefits of Personal Loans
Personal loans offer flexibility, with funds usable for various purposes, and typically have lower interest rates than credit cards. They also have fixed repayment terms, providing a clear payment plan over time.
Eligibility Criteria
Key factors include a good credit score, stable income, and a low debt-to-income ratio. Lenders will also look at your employment history to determine eligibility.
How to Apply for a Personal Loan
- Research lenders and compare rates.
- Submit an application with relevant documents.
- Once approved, review terms and accept the loan offer.
Factors to Consider
Look at interest rates, fees, and loan terms. It’s crucial to ensure the loan fits your monthly budget and overall financial plan.
Risks Involved
Personal loans come with risks, such as high-interest rates for those with poor credit, the possibility of over-borrowing, and negative impacts on your credit score if repayments are missed.
| Bank Name | Minimum Rate Of Interest (%) | Loan Amount | Loan Tenure | Minimum Processing Fees |
|---|---|---|---|---|
| Indusind Bank | 10.25 % | Rs. 1 LAKH – 50 LAKHS | 1 – 5 YEARS | 1 % |
| HDFC Bank | 10.75% | Rs. 1 LAKH – 99 LAKHS | 1 – 6 YEARS | Rs. 5899/- |
| ICICI Bank | 10.75 % | Rs. 1 LAKH – 99 LAKHS | 1 – 6 YEARS | Rs. 4999/- |
| IDFC Bank | 10.75 % | Rs. 1 LAKH – 50 LAKHS | 1 – 5 YEARS | 1 % |
| Yes Bank | 10.99 % | Rs. 1 LAKH – 50 LAKHS | 1 – 6 YEARS | 1 % |
| Kotak Mahindra Bank | 11 % | Rs. 1 LAKH – 50 LAKHS | 1 – 5 YEARS | 1 % |
| Tata Capital | 11.75 % | Rs. 1 LAKH – 35 LAKHS | 1 – 5 YEARS | Rs. 7000/- |
| Piramal Finance | 12.99 % | Rs. 1 LAKH – 20 LAKHS | 1 – 7 YEARS | 2 % |
| Credit Siason | 13 % | Rs. 1 LAKH – 15 LAKHS | 1 – 5 YEARS | 1.50 % |
| Shriram Finance | 13 % | Rs. 1 LAKH – 15 LAKHS | 1 – 5 YEARS | 1 % |
| Aditya Birla | 13.50 % | Rs. 1 LAKH – 50 LAKHS | 1 – 7 YEARS | 1.50 % |
| Axis Bank | 13.50 % | Rs. 1 LAKH – 50 LAKHS | 1 – 5 YEARS | 1 % |
| Axis Finance | 13.50 % | Rs. 1 LAKH – 50 LAKHS | 1 – 7 YEARS | 1.25 % |
| Incred | 13.99 % | Rs. 1 LAKH – 10 LAKHS | 1 – 5 YEARS | 5 % |
| Fullerton | 14 % | Rs. 1 LAKH – 25 LAKHS | 3 – 5 YEARS | 2.50 % |
| PaySense | 15 % | Rs. 1 LAKH – 7.5 LAKHS | 1 – 5 YEARS | 4 % |
| Muthoot Finance | 15.50 % | Rs. 1 LAKH – 20 LAKHS | 1 – 5 YEARS | 2.85 % |
| Finnable | 18.99 % | Rs. 1 LAKH – 10 LAKHS | 2 – 5 YEARS | 4 % |
| Hero Fincorp | 19 % | Rs. 1 LAKH – 7.5 LAKHS | 1 – 5 YEARS | 2 % |
