Skip to content
Home » A Detailed Guide to the Various Personal Loan Options Available in India

A Detailed Guide to the Various Personal Loan Options Available in India

In India, there are many different kinds of loans available, including housing loans, educational loans, personal loans, healthcare loans, and so forth. A personal loan is a highly sought-after financing option among diverse borrowers. 

When it comes to funding urgent necessities, a personal loan becomes the best option. These loans serve various purposes, such as covering medical emergencies or consolidating debt that has higher interest rates. Sometimes, such as with credit card debt, personal loans are the preferred choice. These loans can be tailored to the borrower’s needs and are offered by banks and NBFCs.

We are going to explore the various categories of personal loans that are offered in India. Here you will also learn about their qualifying requirements, and their distinctions from one another in the following paragraphs.

Personal Loan Highlights 2024

Loan Provider Minimum Income Loan Amount Range Loan Tenure Range Interest Rate Range CIBIL Score Requirement Processing Fees Range
Hero Fincorp ₹15.00k ₹50.00k – ₹10.00L 12M – 60M 9.5% – 16% 700 or above 1% – 5%
Cash Out ₹12.00k ₹10.00k – ₹4.00L 4M – 4M 1.5% – 3% 550 or above 1.5% – 2%
Stashfin ₹20.00k ₹5.00k – ₹5.00L 9M – 36M 2.45% – 4% 725 or above 2% – 2%
KreditBee ₹16.00k ₹1.00k – ₹3.00L 1D – 4M 1.5% – 3% 550 or above 5% – 6%
FlexSalary ₹8.00k ₹4.00k – ₹2.00L 6M – 60M 1.5% – 3% 550 or above ₹300 – ₹750
Mpokket ₹9.00k ₹500 – ₹30.00k 1W – 4M 2% – 4% 550 or above ₹50 – ₹200
Rk Bansal ₹25.00k ₹10.00k – ₹50.00k 7D – 1M 1% – 1% 650 or above
Werize ₹12.00k ₹30.00k – ₹5.00L 12M – 36M 15% – 22% 650 or above 3% – 5%
IDFC Bank ₹20.00k ₹1.00L – ₹40.00L 12M – 60M 10.49% – 22% 700 or above 1% – 4%
Aditya Birla ₹20.00k ₹1.00L – ₹50.00L 12M – 84M 12% – 28% 650 or above 1% – 4%
Muthoot Finance ₹20.00k ₹1.00L – ₹7.50L 12M – 60M 14% – 22% 685 or above 1% – 3%
Tata Capital ₹25.00k ₹75.00k – ₹25.00L 12M – 60M 10.5% – 14.25% 720 or above 0.75% – 2%
Standard Chartered ₹50.00k ₹1.00L – ₹1.00cr 12M – 60M 11.49% – 20% 740 or above 1% – 3%
Bajaj Finserv (Prime) ₹38.00k ₹1.00L – ₹35.00L 12M – 84M 13.5% – 15% 685 or above 0.5% – 1.5%
Axis Bank ₹25.00k ₹1.00L – ₹40.00L 12M – 60M 11.15% – 16.25% 690 or above 1% – 4%
ICICI Bank ₹40.00k ₹1.00L – ₹1.00cr 12M – 72M 10.5% – 15% 700 or above 0.5% – 1.5%
Fullerton ₹25.00k ₹1.00L – ₹25.00L 12M – 60M 14% – 32% 705 or above 1% – 3%
HDFC Bank ₹25.00k ₹1.00L – ₹1.00cr 12M – 72M 10.25% – 16% 700 or above 0.5% – 1.5%
Loan Tap ₹12.00k ₹50.00k – ₹7.00L 12M – 36M 11% – 24% 675 or above 1% – 2%
Insta Money ₹15.00k ₹5.00k – ₹25.00k 1M – 6M 13% – 36% 650 or above 1% – 4%
Kotak Bank ₹25.00k ₹1.00L – ₹50.00L 12M – 60M 10.75% – 22% 705 or above 0.75% – 2.5%
Cholamandalam ₹20.00k ₹1.00L – ₹35.00L 6M – 60M 14% – 22% 675 or above 1% – 3%
SBM ₹20.00k ₹50.00k – ₹25.00L 6M – 60M 14% – 20% 700 or above 1% – 4%
Axis Finance ₹50.00k ₹1.00L – ₹50.00L 12M – 60M 14% – 16% 650 or above 1% – 3%

 

Wedding Loan

Indian marriages are renowned for their luxury, with sumptuous ceremonies, delicious feasts, traditional customs, and gift exchanging. It becomes costly to make each minute of the day unique and unforgettable. A wedding loan is intended to help the prospective bride, groom, or any member of the family cover the cost of the wedding and make easy repayments.

Similar to personal loans, wedding loans have eligibility standards, and applicants must fulfill all of them as set forth by the lender.

Travel Credits

Travel loans are specifically intended to finance international and domestic family getaways and travel. In order to give their borrowers additional benefits, lenders frequently integrate travel insurance with the loan amount. The loan includes an easy application process and customizable repayment conditions.

Loan for Home Renovation

As the name implies, you can use a personal loan to do repairs, painting, restoration, and other similar work around the house. Asking for a loan for home renovation requires the same paperwork and application procedures as a standard personal loan. On the other hand, the borrower may receive a larger loan amount, and the repayment period is longer than with a standard personal loan.

Loan for Debt Consolidation

When you decide to take out a new loan with favorable terms and conditions to pay off all of your current debt, it’s known as a debt-consolidation loan. You will be able to better handle your finances, reduce interest costs, and properly manage monthly repayments by consolidating various debts into one. Repayment terms are comparable to those of a standard personal loan, with a maximum duration of 72 months.

Medical Loan

Medical loans are available for immediate approval and have lower interest rates than personal loans. They can be used for planned medical operations or to cover unexpected medical costs. The amount of the loan is determined by your financial standing, repayment capability, and professional status.

Eligibility Requirements for Getting Various Kinds of Personal Loans

Maintaining an excellent credit score is one of the essential requirements when applying for a personal loan. If your credit score is high, you could be able to acquire the best loan offer at a cheaper interest rate. However, you might have to pay a higher interest rate on your loan if your credit score is low. Other requirements must be met in order to be eligible for a personal loan. 

The following are the requirements for professionals who are self-employed or on a salary:

For Individuals With Salaries

The following are the requirements for salaried individuals to be eligible for personal loans:

  • The applicant must be at least 21 years old.
  • 60 years is the maximum age of an applicant upon loan maturity.
  • Minimum Employment Period: One year at the present company, two years overall
  • Minimum Monthly Income: Starts at Rs 15,000, depending on the lender.

For Self-employed Workers

The following are the requirements for self-employed professionals to be eligible for personal loans:

  • The applicant must be at least 25 years old.
  • 65 should be the maximum age of an applicant upon loan maturity.
  • In the modern business world, a minimum of two to three years is the business period.
  • Rs 1 lakh is the minimum annual income.

Required Documents for Every Kind of Personal Loan

  • Proof of identity
  • Proof of Residence
  • Pan Card 
  • Form 16 
  • Income tax returns for the previous two years
  • Last six months’ bank statements
  • Last three months’ pay slips

Things to Effectively Take into Account for Various Personal Loan Types

In order to obtain the best terms and conditions on your loan, you should think about the following things before applying for a personal loan, or any kind of personal loan:

Credit Score: Due to a decreased likelihood of repayment default, lenders choose applicants with a credit score of 700 or higher for personal loans. To improve your chances of receiving a personal loan with favorable terms and circumstances, make sure your credit score is higher than 700 before applying.

APRs: Prior to applying for a personal loan, compare the annual percentage rate, or APR, rather than the interest rates of loans provided by various lenders. It conveys the true cost of a personal loan, which takes into account the interest rate, processing charges, and any other additional expenses.

Lower and Upper Limits on Borrowing: The maximum borrowing limit is decided by the lender, taking into account many aspects such as repayment capacity, professional status, and earnings. The loan amount can be less than the maximum lending limit if your credit score is low.

Terms of Repayment: The APR on your loan account is affected by your repayment period. Your APRs will increase with a longer payback period, but your EMI will decrease (you may use an EMI calculator to calculate the EMI for a loan). Selecting the right repayment duration helps control the total cost of the loan.

What Makes Personal Loans Apart from Other Loan Types

Personal Loan vs. Cash Advance Loan

Cash Advance Loan vs Personal Loan
Basis Cash Advance Loan Personal Loan
Nature of Loan Credit card firms offer short-term loans subject to an authorized credit limit. Loans are offered for a variety of reasons by banks or NBFCs. 
Interest Rate Generally more expensive  Lower than loans for cash advances.
Tenure 12-36 months 12-84 months
Credit Check Minimal  It usually necessitates a thorough credit check.
Approval Basis Approved based on habits of usage, credit card limit, etc.  Approved based on a variety of factors, including age, salary, employer profile, and credit score. 
Purpose of Loan Urgent financial requirements and expenses. Various other objectives like marriage, trips, home remodeling, etc. 

 

Line of Credit versus Personal Loan

Personal Loan versus Line of Credit
Basis Personal Loan Line of Credit
Nature of Credit Total loan amount disbursed all at once. Credit that revolves and has a predetermined limit
Purpose of Credit Different objectives, including support for higher education, travel, house improvement, etc.  Versatile use for many kinds of requirements, including carrying on expenses and emergencies.
Repayment Period Repaid in fixed EMIs.  Continuous as long as the credit line is available, with no set termination date.
Interest Accrual  As soon as the loan amount is handed over, interest is charged. Only when the loan amount is borrowed or the credit limit is utilized is interest paid. 

 

Bottom Line

Personal loans are an adaptable financial instrument. This can be utilized for many types of purposes, including debt reduction, home improvements, travel, and medical costs. You can easily fulfill all of your financial goals and objectives and make sound choices if you have a thorough understanding of each sort of personal loan. 

But keep in mind that you have to make EMI payments when you’re taking out a personal loan. It is crucial to confirm that the EMI does not exceed your income threshold and that you do not need to take on more debt. You may check your EMI with a personal loan EMI calculator to make things easier for you.

 

Leave a Reply

Your email address will not be published. Required fields are marked *