Personal loans are an unsecured form of credit that is popular to meet immediate requirements. It is multi-purpose in nature and therefore can be used for various purposes including wedding, home renovation, travel purposes and more. Moreover, there is no restriction for the amount borrowed and can be used for any purpose they want. In fact, a personal loan can help you build your credit faster when compared with other forms of credit. This is because of the risk it carries due to being unsecured.

All in all, a personal loan can offset any temporary financial crisis.

Benefits and Features of Personal Loan

A personal loan is a loan for your personal use, be it your child’s wedding, a dream vacation, or a shopping extravaganza. A personal loan does not require any security or collateral. Getting a Personal loan is quite stress free and there are typically a number of offers in the market most of the time.

No collateral required

One of the benefits associated with an online personal loan is that it is unsecured in nature. This means you don’t need to pledge any collateral for your loan. Although this can be a reason for your interest rate, you can get a low-interest personal loan easily if you meet the eligibility requirements.

Minimal Documentation

In this age of digitisation, the process of verification and documentation has now become short. This is applicable for an instant personal loan as they are fast in disbursal and require minimum documents for approval.

Easy Approval

You can get personal loans that are quick and easy in approval. This is why it is the best bet in times of financial emergency. Moreover, the process has become digital; thus, reducing time in the verification process.

Multipurpose in nature

A personal loan can be used for anything except for investment and illegal activities. Apart from that, it is multipurpose in nature and can be used for anything. Other forms of credit when taken are for a specific purpose and can be used only for the same. For example, a home loan is used for purchasing a house whereas a car loan is taken to buy a car. However, a personal loan can be taken to offset any immediate requirements.

Personal Loan Eligibility Criteria

Personal loans eligibility criteria can be fairly stringent, considering banks need to mitigate their risk. Most people with a regular source of income such as salaried individuals or self-employed individuals can avail a personal loan. Banks consider salaried individuals, self-employed professionals and self-employed business people.

Personal Loan Amount

An individual can borrow as much as they can repay. This in banking terms would mean a personal loan that has an EMI that does not exceed 40% of your monthly take home income, where the EMIs for existing loans are also deducted.

Personal Loan Interest Rates

Personal loan rates vary from bank to bank, and are anywhere between 10%-18% depending upon your profile and the policies/scheme you decide to opt for. 

FinKartz works with a wide range of personal loan providers to get you the best deals and interest rates for your financial profile.

Documents Required for Personal Loan

The common documents required for an online personal loan approval are given below:

For Salaried Individuals

• Identity & Age Proof

• Completely filled personal loan application with photograph

• PAN Card

• Residence proof - Passport driving licence, Voter ID, post-paid/landline bill, utility bills (electricity/water/gas)

• Bank statements for the last 3 months (preferably your salary account)

• Salary Slips of last 3 months

• Form 16 or Income Tax Returns of last 3 years

For Self-Employed Individuals

• Identity & Age Proof

• Completely filled personal loan application with photograph

• PAN Card

• Residence proof - Passport driving licence, Voter ID, postpaid/landline bill, utility bills (electricity/water/gas)

• Bank statements for the last 3 months (preferably your salary account)

• Last 3 years Income Tax Returns with computation of Income

• Last 3 years CA Certified / Audited Balance Sheet and Profit & Loss Account