If you are salaried, there can be events, situations, and emergencies that do not fit your budget. Personal loans play a vital role in such cases and emergencies. These loans can be used for weddings, medical emergencies, or other purposes. Personal loans help you arrange a significant amount of money with a simple procedure. However, you need to know a few things before getting a personal loan in India.
What is a personal loan?
A personal loan (instant or instant personal loan) is a loan you can take from a financial institution. A bank can provide you with a loan at a fixed interest rate to meet personal financial needs like weddings, education, or any other emergencies.
Usually, personal loans are referred to as unsecured loans. In personal loans, applicants don’t need to provide security against borrowed money. The borrower agrees to pay a fixed interest rate within a specific time through installments.
Documents required to get a personal loan in India
Getting a personal loan in India is easy when you have a well-maintained credit profile. When you want to take a personal loan, make sure you have the following fulfilled:
- Credit score
A credit score is a three-digit figure ranging from 300 to 900. A credit reporting firm gives you the score after analysing your credit profile.
People who want a personal loan in India must have a high credit score. This is possible by timely meeting financial responsibilities. You require a credit score of at least 700. However, it should be 750.
Your credit score decreases if you miss a payment on a loan or any installment. That might be a challenge when you need a personal loan.
To get a personal loan in India, you should keep in mind that the financial institutions give you a loan according to your ability to pay it back, keeping your income stable.
If you are salaried, you must show the last six months’ salary slips while applying for the loan. The bank gives you a loan on your ability to pay back the interest.
You must be actively running your business for 3 years or more if you are self-employed. Your company’s income tax returns are checked and evaluated to check your ability to repay.
- Age requirement
Personal loans are available to consumers of legal age who apply to financial organisations.
An individual’s age can vary from 18 to 65 years to take a loan. Though, banks and lenders may have their age limits.
- Loan tenure/duration
Personal loans are also called short-term loans. It means you need to them pay off in a short period. Personal loans in India are usually given for 12 to 60 months. Based on your loan duration, your monthly installment amount changes.
Installments are generally higher for short-term loans and lower for long-term loans.
- Loan amount
There is no limit on how much loan you can acquire with personal loans. It depends on your income and existing liabilities.
A financial institution analyses if you can afford the monthly installment without risking other costs. Usually, it should not exceed half of your income.
Non-banking financial organisations that enable smaller personal loans provide a minimum loan of INR 3000. Banks only give a minimum loan amount between INR 30,000 and 50,000.
Step-by-step process to get a personal loan in India
You can visit the bank or apply online to complete the personal loan application process. In both cases, digitalisation has made it possible to evaluate loans and the fees attached to them in advance and make an appropriate choice.
Applying for a personal loan in India involves the following steps:
Choose your lender
The criteria determining which lender is best for a personal loan are eligibility, fees, dependability, and compatibility.
Decide on a personal loan
Once you have decided on your lender, you may pick the loan they are providing by weighing the interest rates and other taxes.
You must keep the following documents ready to complete the documentation:
- For identification proof, you need an Aadhaar card, a PAN card, a driving licence, and a passport.
- For residential proof, you need an Aadhaar card, water & energy bills, and a driving licence.
- For income proof, you need your salary slips.
- Lastly, you need your photographs.
Send in your application
Once you have all the documents ready, you can apply either ways:
Offline: By visiting the financial institution’s main office or the branch granting you the personal loan.
Online: By submitting your application on the lender’s website. You can provide all the necessary information using digital know-your-customer documentation. The majority of financial institutions accept legally binding records.
Before applying for a personal loan and making sure it gets accepted, you must follow the above-mentioned points.
Piramal Finance is an Indian financial services company that provides various loans. For example, personal, business, housing, and other financial products. Visit the company’s website for a simple and seamless instant personal loan process.
- What is the procedure for getting an instant loan?
The lender will usually respond within minutes and put funds into your bank account If you are approved. However, it may take a business day or two, or even longer, to get the funds.
- What are the requirements for an instant loan?
Instant loans are often not subject to a credit check. To get an instant loan, you must provide your details, be 18 years or above, have identity proof, provide income proof (e.g., a pay slip), and have a bank account.