A personal loan is a small collateral-free loan taken by an individual from a bank or an NBFC. These loans do not require the borrower to state their reasons for taking the loan.

What are the Eligibility Criteria of Personal Loans?

To avail a personal loan, you need to meet a very basic eligibility criterion. It comprises of a stable income, a stable place of residence, a good credit score, age and satisfactory repayment capacity. You will have to present documents to offer as proof of all these factors when applying for a personal loan.

Loan Amount 

Three factors decide the amount of a personal loan that you are eligible for. They are your income, your debt-to-income ratio, which is your repayment capacity and your credit score. You can check your eligibility on personal loan eligibility calculators available on the websites of most lenders.

Rate of Interest

The rate of interest for personal loans is high. Since it is an unsecured loan, the interest rate begins at 8.8% per annum. But the rate of interest on your loan will be subject to your eligibility. If you have a low credit score, your rate of interest will be on the higher side.

Loan Tenure

A borrower can avail a personal loan for a maximum of 7 years. But since the interest rate of personal loans is high, it is advised to choose a shorter tenure.

How to Apply

You can apply for a personal loan by filling a simple form on the website of your chosen lender with the required documents. Personal loans are usually disbursed within hours of verification.

A personal loan is the best to fuel any urgent cash requirements.

Must Read: 5 Tips to Get a Personal Loan Without Hurting your Credit Score