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What is a Personal Loan?
A personal loan is an unsecured loan provided by financial institutions to individuals for personal expenses such as the cost of debt consolidation, home improvement, medical expenses, education, vacation, or any other personal need. Everybody wants to be financially stable at some point in their lives. A personal loan is a financial tool that can be your savior in unexpected situations with Myzeon that you can face in your life. These loans come with fixed interest rates which means your monthly payments remain the same over the predetermined time of the loan. Apply personal loan online to get the best deal on a personal loan with lower interest rates. The repayment period of a personal loan ranges from one to seven years. Your eligibility and interest rate are assessed based on your credit history.
When to Consider a Personal Loan?
Personal loans can come to the rescue in various financial scenarios. If you are struggling to pay the monthly payment of your high-interest credit card debt then a personal loan can be used to quickly and easily access funds with lower interest rates. The benefits of a personal loan can be availed in unexpected medical bills, home repairs, or car troubles for a quick source of funds to cover these costs. You can also celebrate your life’s milestones without draining your savings for a wedding, or a dream vacation. You can get the lowest personal loan interest rate if you have a good credit score. Keep in mind that a poor credit score may not qualify you for getting a personal loan.
What Are Eligibility Criteria For Personal Loan?
Personal loan eligibility plays a crucial role in getting you a personal loan with lower interest rates. Some of the key factors that lenders consider are:- Credit Score: Your credit history decides whether you are eligible for a loan or not. It demonstrates your ability to manage loans responsibly. A good credit score is usually above 700 which can qualify you for a lower personal loan interest rate.
- Income: To be able to repay the loan, you need to have a reliable source of income. Lenders require a minimum income level of an individual before securing them a personal loan. A higher income grants a larger loan amount.
- Employment Status: Except for a stable income, you must have stable employment. Lenders may look at your job history to assess your ability to repay the loan. Being self-employed can also work in your favor.
- Debt-to-income Ratio: The debt-to-income ratio is the percentage of your monthly income that is spent on paying existing debts. The higher the DTI ratio, the lower the chances of qualifying for a loan. A lower DTI ratio makes you highly eligible for a personal loan.
- Age: The minimum age to qualify for a loan is 18 years but it can vary for different lenders. Some lenders require 21 years of age but some can avail you of a personal loan at 18 years of age.
Documents For Personal Loans That Required:
The necessary documentation for easy steps for online personal loan is very important for Lenders who require these documents to assess your eligibility and Value of Credit. Get ready with these documents to streamline the application process for a personal loan :- Identity proof (Adhar card, PAN card, Passport, etc)
- Proof of Age (Birth Certificate, Passport, Adhar Card, etc)
- Proof of Address (Electricity bill, Rent agreement, bank statement with your address, etc)
- Proof of Income(for salaried employees- payslip, a letter from your employer stating your income. For self-employed individuals- profit and loss statement, bank statements.)
- Bank statements of 2-3 months to assess your financial stability and transaction history.
How Can You Apply Personal Loan Online?
Here are some steps that you should take before applying for a personal loan:-
Check if You Are Eligible
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Compare and Analyze Interest Rates
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Compile Necessary Documents
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Fill Out Online Application Form
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Upload Personal Loan Documents
What Are Benefits Of A Personal Loan?
You can manage your finances, navigate expenses, and meet your goals with the funds provided by a personal loan. It has numerous benefits such as:- Quick Approval: Apply personal loan online and get a quick approval for your loan. It is easier and faster to secure than other types of loans. Individuals seeking to obtain a personal loan may benefit from the expediency and simplicity of the online application process, which allows for rapid approval.
- Fixed Terms: The fixed interest rates of a personal loan mean your monthly payments remain the same throughout the loan term. This can help you budget your expenses resulting in easy management of your finances.
- No Security: These loans are unsecured loans which means that you do not need to provide collateral in order to secure a loan. This reduces the risk of losing your assets in case of fail to repay the loan. Personal loan interest rates are higher than business loan interest rates as it provide funds without any collateral.
- Multiple Uses: Whether you want to cover the expense of a wedding, a dream vacation, education, medical bills, home renovation, or any unexpected financially draining situation, you can always depend on a personal loan. These funds can be availed quickly and easily in times of emergency.
- Credit Building: Timely repayments of the personal loan can reflect positively on your credit score. It demonstrates your responsible use of funds, which results in an improved credit history and a higher credit score.
Compare Personal Loans
The three major factors that you consider before borrowing a personal loan are the Interest Rate, Loan Tenure, and Loan amount. Therefore, you can compare different banks and NBFCs that offers personal loan to Indian customers.
| Name of the Bank/NBFC | Interest Rate | Loan Amount | Tenure | Processing Fee |
| ICICI Bank Personal Loan | 10.75% p.a. onwards | Up to INR 50 Lakhs | Min:- 1 Year Max:- 6 Years | Up to 2.5% of the Loan Amount |
| Kotak Mahindra Bank Personal Loan | 10.99% p.a. onwards | Up to INR 25 Lakhs | Min:- 1 Year Max:- 5 Years | Up to 3% of the Loan Amount |
| Axis Bank Personal Loan | 10.25% p.a. onwards | Up to INR 40 Lakhs | Min:- 1 Year Max:- 5 Years | Up to 2% of the Loan Amount |
| IDFC First Bank Personal Loan | 10.49% p.a. onwards | Up to INR 1 Crore | Up to 5 Years | Up to 3.5% of the Loan Amount |
| HDFC Bank Personal Loan | 11% p.a. onwards | Up to INR 40 Lakhs | Up to 6 Years | Up to INR 4999 |
| Yes Bank Personal Loan | 10.99% p.a. onwards | Up to INR 40 Lakhs | Min:- 1 Year Max:- 5 Years | As per the Bank’s Norms |
| Bajaj Finserv Personal Loan | 13% p.a. Onwards (Salaried) 17% p.a. Onwards (Non-Salaried) | Up to INR 25 Lakhs (Salaried) Up to INR 45 Lakhs (Non-Salaried) | Up to 5 Years (Salaried) Up to 7 Years (Non-Salaried) | Up to 4% of the Loan Amount |
| Tata Capital Personal Loan | 10.99% p.a. onwards | Up to INR 35 Lakhs | Up to 6 Years | Up to 2.75% of the Loan Amount |
| Aditya Birla Finance Personal Loan | 13% p.a. onwards | Up to INR 50 Lakhs | Up to 7 Years | Up to 3% of the Loan Amount |
| Incred Personal Loan | 11.49% p.a. onwards | Up to INR 15 Lakhs | Up to 7 Years | As per the Bank’s Norms |
| Paysense Personal Loan | 2.3% onwards per month | Up to INR 4 Lakhs | Up to 540 Days | Up to 3% of the Loan Amount |
| Finnable Personal Loan | 16% p.a. onwards | Up to INR 10 Lakhs | Min:- 6 Months Max:- 5 Years | Up to 4% of the Loan Amount |
| Upward Personal Loan | 18% p.a. onwards | Up to INR 7 Lakhs | Up to 5 Years | As per the Company’s Norms |
| Finzy Personal Loan | 18% p.a. onwards | Up to INR 5 Lakhs | Up to 3 Years | Up to 5% of the Loan Amount |
| Ashv Finance Personal Loan | 18% p.a. onwards | Up to INR 7 Lakhs | Min:- 2 Year Max:- 5 Years | As per the Company’s Norms |
| AU Small Finance Bank Personal Loan | Up to 30% per annum | Up to INR 7.5 Lakhs | Min:- 1 Year Max:- 5 Years | Up to 5% of the Loan Amount |
| IndusInd Bank Personal Loan | 10.49% p.a. onwards | Up to INR 25 Lakhs | Min:- 1 Year Max:- 5 Years | Up to 3% of the Loan Amount |
| Fullerton Personal Loan | 11.99% p.a. onwards | Up to INR 30 Lakhs | Up to 5 Years | Up to 6% of the Loan Amount |
| RBL Bank Personal Loan | 17.50% p.a. onwards | Up to INR 20 Lakhs | Min:- 1 Year Max:- 5 Years | Up to 2% of the Loan Amount |
| Home Credit Personal Loan | 2% onwards per month | Up to INR 5 Lakhs | Min:- 6 Months Max:- 4 Years | Up to 5% of the Loan Amount |
| Citibank Personal Loan | 10.75% p.a. onwards | Up to INR 30 Lakhs | Min:- 1 Year Max:- 5 Years | Up to 2% of the Loan Amount |
| Ujjivan Small Finance Bank Personal Loan | 11.49% p.a. onwards | Up to INR 10 Lakhs | Up to 5 Years | Up to 2% of the Loan Amount |
| Standard Chartered Bank Personal Loan | 11.49% p.a. onwards | Up to INR 50 Lakhs | Up to 5 Years | Up to 2.25% of the Loan Amount |
| Punjab National Bank Personal Loan | Up to 15.85% per annum | Up to INR 20 Lakhs | Up to 5 Years | Up to 1% of the Loan Amount |
| SBI Personal Loan | 10.30% p.a. onwards | Up to INR 20 Lakhs | Up to 6 Years | Up to 1.5% of the Loan Amount |
| Bank of Baroda Personal Loan | Up to 17.05% per annum | Up to INR 20 Lakhs | Up to 6 Years | Up to 2% of the Loan Amount |
| Bank of India Personal Loan | 12.75% p.a. onwards | Up to INR 20 Lakhs | Up to 3 Years | Up to 2% of the Loan Amount |
| IDBI Personal Loan | Up to 14% per annum | Up to INR 5 Lakhs | Min:- 1 Year Max:- 5 Years | Up to 1% of the Loan Amount |
| Union Bank of India Personal Loan | 10.30% p.a. onwards | Up to INR 15 Lakhs | Up to 5 Years | Up to 1% of the Loan Amount |
| IIFL Personal Loan | 14.25% p.a. onwards | Up to INR 5 Lakhs | Up to 3 Years | As per the Company’s Norms |
FAQs
To determine your eligibility for a personal loan, consider these factors:
Credit Score: A higher credit score increases your chances of approval.
Income and Employment: Stable income and employment history are crucial.
Debt-to-Income Ratio: Lenders prefer a lower ratio for better eligibility.
Age and Citizenship: Typically, you must be a legal adult and a indian citizen.
Documentation: Ensure you have necessary documents like ID proof, income statements, etc.
Loan Amount: Verify if you meet the lender’s minimum and maximum loan amount criteria.
Collateral (if applicable): Some loans require assets as security.
Repayment Capacity: Assess if you can comfortably manage monthly payments.
Your ability to borrow money from a bank up to a certain amount will depend on a number of variables. If you make a salary, your EMI should ideally not be more than 30% of your monthly salary. The bank or NBFC will also consider whether you currently have any loans for which you are making EMI payments. Self-employed people will be given a loan amount based on the revenue generated by their firm. The other debts owed by the person in question will also be considered. The maximum loan amount made available will also be subject to the terms and circumstances set forth by the lender.
With MyZeon offerings, customers can select a loan term between 1 and 7 years based on their convenience.
While the specific documents needed differ from lender to lender, the following generic documents are often needed by most banks and financial institutions from applicants: Proof of identity Address proof Proof of income Proof of business (applicable only for self-employed individuals) Any other documents requested by the lender
When requesting a personal loan, you should keep the following in mind: Interest Rates: Depending on the terms and factors of the lender and your credit score, the interest rate paid for a personal loan may get at 10.25% p.a. The total cost of the loan is significantly affected by the interest rate. Flexibility in Repayment: Verify whether the lender permits partial or early repayments and whether there are any fees associated with doing so. Processing Fee: A hefty processing fee could increase the cost of your loan even if you are provided a low interest rate.
Maintaining or raising your credit score above 750 can allow you to lower the EMI for a personal loan. If you and the bank are friendly, you might be able to work out a better interest rate or a special discount.
Your chances to get a loan with a low interest rate are equally great if you have a strong credit score. Your credit score reveals your creditworthiness and capacity to make payments. It is advised to keep your credit score above 750 if you intend to apply for a personal loan. A personal loan may be provided to applicants with an average credit score, but at a high interest rate, while those with a very poor credit score may be completely turned down.
Using a Personal Loan Calculator to Determine EMI:
Open the Calculator: Go to a reputable financial website or use a mobile app that offers a Personal Loan EMI calculator.
Input Loan Amount: Enter the total amount of the loan you wish to borrow.
Set Interest Rate: Provide the annual interest rate offered by the lender for the personal loan.
Choose Loan Tenure: Select the duration (in months or years) for which you intend to repay the loan.
Click Calculate: Press the ‘Calculate’ button to compute your Equated Monthly Installment (EMI).
Maintain a Good Credit Score: A higher credit score increases your chances of qualifying for a low-interest rate.
Compare Lenders: Research and compare loan offers from various lenders to find the one offering the lowest interest rates.
Meet Eligibility Criteria: Ensure you meet the lender’s eligibility requirements, which may include factors like income, employment stability, and age.
Provide Accurate Information: Be truthful and provide accurate financial information when applying for the loan.
Opt for a Shorter Tenure: Choosing a shorter loan tenure often results in lower interest rates.
