Personal loans are one of the most popular financial products in India. Whether you need money for medical emergencies, marriage, travel, education, or debt consolidation, a personal loan can help you meet your needs without providing any collateral. In this complete guide, you will learn everything about personal loans in India, including eligibility criteria, interest rates, documents required, and how to apply online.
What Is a Personal Loan?
A personal loan is an unsecured loan provided by banks, NBFCs, and digital lenders. Since no collateral is required, approval depends mainly on your income, credit score (CIBIL), employment type, and repayment capacity.
Key features of personal loans:
- No collateral required
- Fixed interest rate in most cases
- Fixed monthly EMI
- Loan tenure usually ranges from 1 to 5 years
Uses of Personal Loan
You can use a personal loan for almost any legal purpose, such as:
- Medical emergency expenses
- Wedding or family functions
- Travel or vacation planning
- Home renovation
- Education expenses
- Credit card bill or debt consolidation
There are no restrictions on how the loan amount must be used.
Personal Loan Eligibility Criteria
Eligibility criteria may vary slightly from lender to lender, but the general requirements are:
For Salaried Individuals
- Age: 21 to 60 years
- Minimum monthly income: ₹15,000 to ₹25,000 (varies by lender)
- Employment: At least 6–12 months of work experience
- Credit score: 700 or above is preferred
For Self-Employed Individuals
- Age: 24 to 65 years
- Stable business income
- Business vintage: Minimum 2–3 years
- Good banking history
Documents Required for Personal Loan
Most lenders require the following documents:
- Identity proof (Aadhaar Card, PAN Card, Passport)
- Address proof (Aadhaar, Voter ID, utility bill)
- Income proof (salary slips or bank statements)
- PAN card (mandatory)
- Recent passport-size photographs
Digital lenders may approve loans using only PAN and Aadhaar.
Personal Loan Interest Rates in India
Personal loan interest rates depend on your credit score, income, and lender type.
| Lender Type | Interest Rate Range |
|---|---|
| Banks | 10.5% – 18% per annum |
| NBFCs | 12% – 24% per annum |
| Loan Apps | 18% – 36% per annum |
A higher credit score can help you get a lower interest rate.
How to Apply for a Personal Loan Online
Follow these simple steps to apply for a personal loan online:
- Compare personal loan options from banks and NBFCs
- Check eligibility and interest rates
- Fill out the online application form
- Upload required documents
- Complete KYC verification
- Get loan approval and disbursal
In many cases, loan approval and disbursal happen within 24–48 hours.
Personal Loan EMI Calculation
Your EMI depends on three factors:
- Loan amount
- Interest rate
- Loan tenure
Always use a personal loan EMI calculator to choose a comfortable repayment plan before applying.
Advantages of Personal Loan
- Quick approval and fast disbursal
- No collateral required
- Flexible usage
- Easy online application
Disadvantages of Personal Loan
- Higher interest rates compared to secured loans
- Penalty on late payment
- Impact on credit score if EMIs are missed
Tips to Get Personal Loan at Low Interest Rate
- Maintain a credit score above 750
- Choose shorter loan tenure
- Avoid multiple loan applications at once
- Maintain stable income and job profile
Things to Know Before Taking a Personal Loan
- Check processing fees and hidden charges
- Read loan agreement carefully
- Ensure EMI fits your monthly budget
- Avoid over-borrowing
Disclaimer
EarnPG.com is not a lender or financial institution. We provide informational content and comparison guides related to personal loans. Loan approval, interest rates, and terms depend on the lender’s policies.
Frequently Asked Questions (FAQs)
What credit score is required for a personal loan?
Most lenders prefer a credit score of 700 or above for personal loan approval.
Can I get a personal loan without income proof?
Some digital lenders offer small loan amounts with minimal documentation, but interest rates are usually higher.
How long does personal loan approval take?
Online personal loan approval can take anywhere from a few minutes to 48 hours.
Is a personal loan taxable?
No, the loan amount is not taxable, but interest paid is generally not tax-deductible.
This guide is designed to help users understand personal loans clearly and make informed decisions before applying.
