What is Personal loan?
Raj’s wife had to undergo her third bypass surgery and he has spent his entire savings already on her previous surgeries, what does he do next? He can take a personal loan from the bank for which there is no mortgage that he has to keep (girvi nahi rakna padta hai).
Let’s say if you take a home loan or car loan (amounting in lakhs), how can the bank believe that you would repay them this huge sum of money? In this case the bank agrees to give you the loan by keeping your house as a security (collateral) if in any case you are unable to pay the loan, this is a secured loan. Personal loan is an unsecured loan, which means there is no collateral. As there is no security involved, loans are provided based on credit history. Have you made your payments on time in the past? If yes, well then you can avail personal loans easily.
Best part of personal loans? The documentation is minimal, and approval is instant, sometimes within few hours, so Raj can get the loan sanctioned quickly. You can also take a personal loan for various other purposes like vacation, Home renovation, holidays, child’s marriage etc.
Eligibility for personal loan
Age:
The age of the applicant should be between 21-60 years at the time of applying; this may vary from different banks.
Income:
The required income varies from city to city, but the minimum required monthly income should be Rs 15,000 which varies from banks.
Salaried employee:
Applicant would need minimum 2 years of experience and should be part of the organization for more than 6 months.
Self employed:
Self Employed individual should have business continuity for minimum 3 years.
Credit score:
To be eligible for a personal loan you should be having a credit score of 700, some banks would want you to have a credit score of 750.
Special schemes:
Banks offer customized personal loan interest rates and schemes for salaried borrowers working in government, defense, private or MNC companies. Banks offer personal loan to self-employed professionals like Doctors, CA, CS, Architects. Top banks have also launched special loan schemes to pensioners up to the age of 76 years.