A personal loan is a great financial tool offering you the freedom to use your tomorrow’s income to plan your today. You can use it for a vacation, education, home renovation or a medical emergency which requires immediate funds. With no collateral, the personal loan offers various benefits to borrowers at a market-driven interest rate and flexible repayment tenure.
Why take a Personal Loan?
It is important that before you apply for a personal loan, you look at why you want the loan and whether it is a beneficial step for you. Some of the reasons for choosing a personal loan are:
- You are not qualified for a low-interest credit card.
- Your credit card limit is not adequate to meet your current borrowing needs.
- A personal loan is the least expensive option you have.
- You don’t have any collateral or assets.
- You need small money for a predefined period.
Some of the common reasons why people opt for a personal loan are:
- Home Renovation
- Funding an expensive product, you want to buy
- Debt Consolidation
- Paying Off Other High-Interest Debts
- Paying for a Major Life Event
- Improving Your Credit Score
If you are facing any of the above issues, then a personal loan can be a great financial help to you. For this, you must know what a personal loan has to offer and the various options that you can choose from.
Personal Loan Features
Under the right circumstances, personal loans can be a useful option. Let us look at some important features which will help you make the right choice.
- Loan Application: The digital age has made the entire process of personal loan online, and one can easily apply by downloading a good instant loan app on their phone. They can fill the application, upload documents, and submit the form and get the loan approved within 24 hours.
Some documents required for the loan are:
- Duly filled and signed application form
- Proof of identity
- Proof of address
- Proof of age
- Salary slips for the last three months (for salaried)
- Bank statement for the last six months
- Income tax returns or form 16
- Proof of Income / financial statements (for self-employed)
- Loan Amount: The loan amount for personal expenses depends on various factors, which also play a major role in defining the eligibility of the applicant. Some of these factors are:
- Age: The age of the applicant must be between 21 to 60 years.
- Income: For salaried individuals, the monthly income of the applicant must be more than Rs 25,000.
- Credit Score: The credit score of the applicant must be over 750.
- Loan Interest: As a personal loan is an unsecured loan, the interest rate is fairly high, which depends on the lender and the market rate.
- Loan Tenure: Most lenders offer flexible repayment tenure to individuals. However, you can choose the loan repayment tenure based on your repayment plan.
- EMI: Once you know the loan amount, interest rate and tenure, you can calculate the EMI for the loan by using the personal loan EMI calculator. This will help you make an informed decision.
Personal loan options
With all the above features, there are various lenders offering personal loan based on your profile. To make your work easy, we have listed some of the best loan options to choose from are:
| Lender | Loan Amount | Interest Rate |
| Fullerton India | Up to ₹ 25 Lakh | 13.99% |
| Dhani | ₹ 1,000 – ₹ 15 Lakh | 1 – 3.17 % per month |
| Early Salary | ₹ 2,000 – ₹ 2 Lakh | Up to 3% |
| Bajaj Finserv | Up to ₹ 25 Lakh | 12.99% |
| Stash Fin | ₹ 500 – ₹ 5,00,000 | 1 – 5% per month |
| Flex Salary | ₹ 4,000 – ₹ 2 Lakh | Up to 3% |
| Upwards | ₹ 15,000 – ₹ 1,00,000 | 1.5 – 2.6% |
| Rupeelend | ₹ 10,000 to ₹ 1,00,000 | 3 – 30% |
Conclusion
Various types of personal loans are also available like pre-approved loans-where based on your details, the lender offers you the loan for your expenses. While a personal loan is easy to get, it may sometimes become a financial burden in the future as they come with a high-interest rate. Thus, make sure to make a wise decision before you apply for the loan.