Applying for a personal loan is simple as you do not need any collateral in order to apply for a personal loan. People generally apply personal loans to cover their unexpected financial expenses. Personal loans can be pre approved or you can get approval for them in no time. However, that might depend on the value of the loan that you are applying for. Apart from that, there are no specific restrictions as to how you can use the loan amount. Therefore, there are various types of personal loans available in the market. Whether you need to apply for a loan to cover your travel, medical or any other expenses or even if you want to fulfil your cash in hand requirements at a given point of time, you can apply for a personal loan. Moreover, selecting a bank in India to apply for a personal loan can be a difficult task as banks offer personal loans at affordable interest rates.
There is a certain eligibility criteria that banks use to make sure that you are a trustworthy applicant and would be able to repay your loan. However, the eligibility criteria can vary from one bank to another but the standard eligibility criteria remains the same throughout the country. The eligibility criteria, in this case for a personal loan, is as follows:
- The applicant should be above the age of 21 years but not more than 60 years in case of salaried employees.
- However, if the applicant is a self-employed individual then the age limit varies from 22 years to 55 years.
- In case of salaried employees, the net monthly income required is INR 15000.
- Whereas self employed applicants should have a monthly income of above INR 25000.
- The minimum CIBIL Score required can vary in some cases but banks usually demand a CIBIL score of 750 or above to approve a personal loan application.
Apart from the eligibility criteria there is a certain set of documents that every applicant shall present to the bank while applying for a personal loan. The list of documents required to apply for a personal loan are as follows:
- Every applicant needs to present a proof of their identity while applying for a personal loan. This identity proof can be in the form of an Aadhaar card, Driving Licence, Passport, PAN card, etc.
- Banks also require a proof of residence that can be in the form of an Aadhaar card or any other utility bill.
- While applying for a personal loan, you will also need to provide proof of your income. Salaried employees can submit their last 2 years’ bank statements of their salary accounts. On the other hand, self employed applicants can submit their last 2 years’ Income Tax returns as a proof of income.
Just like how you receive a saving account interest rate on your savings bank account, banks also charge an interest rate on their loan accounts. However, it is advisable for you to check and compare the interest rates on personal loans from various banks. This would help in securing the personal loan at the lowest interest rate possible. Since personal loans are unsecured forms of loan, the interest rates on such kinds of loans can be very high. Therefore, comparing the interest rate from numerous banks on your loan application can be beneficial. Generally, the interest rate on a personal loan application can range anywhere from 8.00% p.a. Up to 18.00% p.a. However, the interest rate also depends on a number of factors. Factors like the amount of loan that you are applying for, your CIBIL score and various other factors.