<h2><strong>Documents Required for Personal Loans for Salaried, Self Employed, NRIs &amp; Pensioners</strong></h2><p>A cash shortfall can strike anytime. Thankfully, a personal loan can meet any financial deficit easily. An individual who is above 18 years of age and has a regular income is eligible for a personal loan in India. All banks and non-banking financial companies operating in India advance such loans. But as personal loans are unsecured loans that are issued without collateral, the borrower must meet the eligibility conditions set by the lender to avail of a personal loan. Eligibility conditions are further validated through corresponding documents. Let’s understand what documents are required for a personal loan:</p><h2><strong>Documents Required for Personal Loan</strong></h2><p>The documents required for a personal loan can broadly be classified into four categories:</p><ul><li><strong>Age Proof</strong> – The loan tenure is dependent upon the age of the applicant. The document that validates the applicant’s age is considered age proof.</li><li><strong>Identity Proof </strong>– The list of documents that validate a person’s identity is considered identity proof. The lending company checks the applicant’s identity to reduce their risk of default.</li><li><strong>Address Proof </strong>– The lender has to be certain about the applicant’s residential address before approving a loan. Thus, a series of documents are accepted as address proof. The applicant can submit any one of the address proof as mentioned in the documents required for a personal loan.&nbsp;</li><li><strong>Income Proof</strong> – The amount of loan that will be approved will depend upon the applicant’s income status. Thus, submission of income proof becomes mandatory to avail of a personal loan. Also, the documents required for a personal loan vary with the job profile of the applicant. Thus, salaried, self-employed, and pensioners have to submit different income proof documents.&nbsp;</li></ul><p>A prospective personal loan borrower is required to submit documents under each category. Every lender has a series of documents that are accepted under each category. Thus, the personal loan borrower must go through the list of documents required for a personal loan of a particular lending company before filing up the loan application form.&nbsp;</p><h2><strong>&nbsp;List of Documents Required for Personal Loan for Salaried Employees</strong></h2><figure class="table"><table><tbody><tr><td colspan="2"><strong>Salaried Individuals</strong></td></tr><tr><td><p>Identity Proof (Any One)</p><p>&nbsp;</p></td><td><ul><li>Aadhar Card</li><li>Passport</li><li>Driving License</li><li>Voters ID Card</li><li>PAN Card</li></ul></td></tr><tr><td><p>Address Proof (Any One)</p><p>&nbsp;</p></td><td><ul><li>Aadhaar Card</li><li>Passport</li><li>Voter ID Card</li><li>Driving License</li><li>Lease Agreement</li><li>Rent Agreement</li><li>Post-paid mobile phone bill (do not submit a bill more than three months old)</li><li>Water bill (do not submit a bill more than three months old)</li><li>Electricity bill (do not submit a bill more than three months old)</li><li>Landline telephone bill (do not submit a bill more than three months old)</li><li>Piped gas bill (do not submit a bill more than three months old)</li></ul></td></tr><tr><td>Proof of Age (Any One)</td><td><ul><li>Aadhaar Card</li><li>Passport</li><li>PAN Card</li><li>Driving License</li></ul></td></tr><tr><td>Photograph</td><td>Two recent, coloured, passport size photographs</td></tr><tr><td>Income Proof (All)</td><td><ul><li>Latest Salary slip</li><li>Form No.16, duly authenticated by employer</li><li>6-month bank statement in which salary is credited</li><li>Income Tax Return</li><li>Appointment letter</li></ul></td></tr></tbody></table></figure><h2><strong>List of Documents Required for Personal Loan for Self Employed</strong></h2><figure class="table"><table><tbody><tr><td colspan="2"><strong>Self-Employed Individuals</strong></td></tr><tr><td><p>Identity Proof (Any One)</p><p>&nbsp;</p></td><td><ul><li>Aadhar Card</li><li>Passport</li><li>Driving License</li><li>&nbsp;Voters ID Card</li><li>PAN Card</li></ul></td></tr><tr><td><p>Address Proof (Any One)</p><p>&nbsp;</p></td><td><ul><li>Aadhaar Card</li><li>Passport</li><li>Voter ID Card</li><li>Driving License</li><li>Lease Agreement</li><li>Rent Agreement</li><li>Post-paid mobile phone bill (do not submit a bill more than three months old)</li><li>Water bill (do not submit a bill more than three months old)</li><li>Electricity bill (do not submit a bill more than three months old)</li><li>Landline telephone bill (do not submit a bill more than three months old)</li><li>Piped gas bill (do not submit a bill more than three months old)</li><li>&nbsp;</li></ul></td></tr><tr><td>Proof of Age (Any One)</td><td><ul><li>Aadhaar Card</li><li>Passport</li><li>PAN Card</li><li>Driving License&nbsp;</li></ul></td></tr><tr><td>Photograph</td><td>Two recent, colour passport size photographs</td></tr><tr><td>Income Proof (All)</td><td><ul><li>Last three years’ ITRs</li><li>6-month bank account statement of Current account</li><li>Audited financial records like Balance Sheet, Profit and Loss account</li></ul></td></tr><tr><td>Other Documents</td><td><ul><li>Certified copy of Academic Degree/License</li></ul></td></tr></tbody></table></figure><h2><strong>List of Documents Required for Personal Loan for Pensioners</strong></h2><figure class="table"><table><tbody><tr><td colspan="2"><strong>Pensioners</strong></td></tr><tr><td><p>Identity Proof (Any One)</p><p>&nbsp;</p></td><td><ul><li>Aadhar Card</li><li>Passport</li><li>Driving License</li><li>&nbsp;Voters ID Card</li><li>PAN Card</li></ul></td></tr><tr><td><p>Address Proof (Any One)</p><p>&nbsp;</p></td><td><ul><li>Passport</li><li>Voter ID Card</li><li>Driving License</li><li>Lease Agreement</li><li>Rent Agreement</li><li>Water bill (do not submit a bill more than three months old)</li><li>Electricity bill (do not submit a bill more than three months old)</li><li>Piped gas bill (do not submit a bill more than three months old)</li><li>Post-paid mobile phone bill (do not submit a bill more than three months old)</li><li>Landline telephone bill (do not submit a bill more than three months old)</li></ul></td></tr><tr><td>Proof of Age (Any One)</td><td><ul><li>Aadhaar Card</li><li>Passport</li><li>PAN Card</li><li>Driving License</li></ul><p>(The pensioner must not be more than 75 years of age)</p></td></tr><tr><td>Photograph</td><td>2 recent, colour passport size photographs</td></tr><tr><td>Income Proof (All)</td><td><ul><li>Last 6-month bank account statement in which pension is credited</li><li>Pensioner’s Portion of PPO in original</li><li>Authority letter in case of DPDO Pensioners</li></ul></td></tr></tbody></table></figure><h2><strong>List of Documents Required for Personal Loan for NRIs</strong></h2><figure class="table"><table><tbody><tr><td colspan="2"><strong>Pensioners</strong></td></tr><tr><td><p>Identity Proof (Any One)</p><p>&nbsp;</p></td><td><ul><li>Aadhar Card</li><li>Passport</li><li>Driving License</li><li>Voters ID Card</li><li>PAN Card</li></ul></td></tr><tr><td><p>Address Proof (Any One)</p><p>&nbsp;</p></td><td><ul><li>Aadhaar Card</li><li>Passport</li><li>Voter ID Card</li><li>Driving License</li><li>Lease Agreement</li><li>Rent Agreement</li><li>Post-paid mobile phone bill (do not submit a bill more than three months old)</li><li>Water bill (do not submit a bill more than three months old)</li><li>Electricity bill (do not submit a bill more than three months old)</li><li>Landline telephone bill (do not submit a bill more than three months old)</li><li>Piped gas bill (do not submit a bill more than three months old)</li></ul></td></tr><tr><td>Proof of Age (Any One)</td><td><ul><li>Aadhaar Card</li><li>Passport</li><li>PAN Card</li><li>Driving License</li></ul></td></tr><tr><td>Photograph</td><td>2 recent, colour passport size photographs</td></tr><tr><td>Other Documents</td><td><ul><li>Copy of Passport</li><li>&nbsp;Valid Visa</li><li>Email ID</li></ul></td></tr><tr><td>Income Proof (All)</td><td><ul><li>Bank account statement of all accounts</li><li>6-month bank statement&nbsp; of NRE/ NRO account</li></ul></td></tr></tbody></table></figure><ul><li>NRI applicants must have a close relative in India. The resident Indian must be personally present at the time of loan application.</li></ul><h4><strong>FAQs</strong></h4><h4><strong>✅What are the documents required for a personal loan for NRIs?</strong></h4><p>Documents required for a personal loan for NRIs are:&nbsp;</p><ul><li>&nbsp;Valid identity proof</li><li>Valid address proof</li><li>Age proof</li><li>Two recent, colour passport size photographs</li><li>&nbsp;Copy of Passport</li><li>Copy of Valid Visa</li><li>Email ID</li><li>6-month bank account statement of all accounts</li><li>6-month bank statement&nbsp; of NRE/ NRO account</li></ul><h4><strong>✅What are the documents required for a personal loan for pensioners?</strong></h4><p>Documents required for a personal loan for pensioners are:&nbsp;</p><ul><li>&nbsp;Valid identity proof</li><li>Valid address proof</li><li>Age proof. The pensioner must not be more than 75 years of age.</li><li>Two recent, colour passport size photographs</li><li>Last 6-month bank account statement in which pension is credited</li><li>Pensioner’s portion of PPO in original</li><li>Authority letter in case of DPDO pensioners</li></ul><h4><strong>✅What are the documents required for a personal loan for a self-employed?</strong></h4><p>Documents required for a personal loan for self-employed are:&nbsp;</p><ul><li>&nbsp;Valid identity proof</li><li>Valid address proof</li><li>Age proof</li><li>2 recent, colour passport size photographs</li><li>Last three years ITRs</li><li>6-month bank account statement of Current account</li><li>Audited financial records like Balance Sheet, Profit and Loss account</li><li>Certified copy of Academic Degree/License</li></ul><h4><strong>✅ What are the documents required for a personal loan for salaried employees?</strong></h4><p>Documents required for a personal loan for salaried employees are:&nbsp;</p><ul><li>Valid identity proof</li><li>Valid address proof</li><li>Age proof</li><li>TwoTwo recent, colour passport size photographs</li><li>Latest salary slip</li><li>Form No.16, duly authenticated by employer</li><li>6-month bank statement in which salary is credited</li><li>Income Tax Return</li><li>Appointment letter</li></ul><h4><strong>✅Which documents are accepted as identity proof for a personal loan?</strong></h4><p>The following documents are accepted as proof of identity. The personal loan borrower can submit to anyone.</p><ul><li>Aadhar Card</li><li>Passport</li><li>Driving License</li><li>Voters ID Card</li><li>PAN Card</li></ul><h4><strong>✅ Which documents are accepted as address proof for a personal loan?</strong></h4><p>The following documents are accepted as proof of address. The personal loan applicant must submit anyone.</p><ul><li>Aadhaar Card</li><li>Passport</li><li>Voter ID Card</li><li>Driving License</li><li>&nbsp;Lease Agreement</li><li>Rent Agreement</li><li>Post-paid mobile phone bill (do not submit a bill more than three months old)</li><li>Water bill (do not submit a bill more than three months old)</li><li>Electricity bill (do not submit a bill more than three months old)</li><li>Landline telephone bill (do not submit a bill more than three months old)</li><li>Piped gas bill (do not submit a bill more than three months old)</li></ul><h4><strong>✅Which documents are accepted as proof of age for a loan?</strong></h4><p>The following documents are accepted as proof of age:</p><ul><li>Aadhaar Card</li><li>Passport</li><li>PAN Card</li><li>Driving License</li></ul><h4><strong>✅ Can I get a personal loan without documents?</strong></h4><p>Yes, you can avail of a personal loan without documents from your existing banker, provided all KYC details have already been updated.</p><h4><strong>✅Is Aadhar Card mandatory for a personal loan?</strong></h4><p>Aadhar Card is not mandatory for a loan. However, it is accepted as proof of identity, address and age and therefore makes the loan application and processing process easier both for borrower and lender.</p><h4><strong>✅&nbsp; Which documents are accepted as valid photo identity proof?</strong></h4><p>Acceptable photo identity proof for a loan is:</p><ul><li>Aadhar Card</li><li>Passport</li><li>Driving License</li><li>Voters ID Card</li><li>PAN Card</li><li>Official ID card</li></ul><h4><strong>✅Who is eligible for a personal loan in India?</strong></h4><p>A personal loan in India can be applied by salaried, self-employed, pensioners and NRIs.</p><h4><strong>✅ Are NRIs eligible for a personal loan in India?</strong></h4><p>Yes, certain banks and non-banking consider personal loan applications submitted by NRIs.</p><h4><strong>✅ Can pensioners apply for a personal loan?</strong></h4><p>Yes, pensioners can apply for a personal loan. The pensioner must not be more than 75 years of age. The pension account must be with the same bank in which a personal loan application is submitted.</p><h4><strong>✅Can utility bills be used as address proof for a loan?</strong></h4><p>Utility bills, namely water bills, electricity bills, piped gas bills, postpaid mobile connection bills and landline telephone bills can be used as address proof for a loan. The utility bill must be in the name of the loan applicant. Also, the utility bill must not be more than three months old.</p><h4><strong>✅What are the pension documents required by a pensioner for a personal loan?</strong></h4><p>A pensioner must submit the following pension documents to avail of a personal loan:</p><ul><li>Last 6-month bank account statement in which pension is credited</li><li>Pensioner’s portion of PPO in original</li><li>Authority letter in case of DPDO pensioners</li></ul>

Documents Required for Personal Loans for Salaried, Self Employed & Pensioners

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Check List of Documents Required for a Personal Loan for Salaried, Self-employed, Pensioners and NRI Applicants. 

Documents Required for Personal Loans for Salaried, Self Employed, NRIs & Pensioners

<p>Finance Writer: Expert in Loans &amp; Credit Cards</p>

Priyanka Jain

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Priyanka Jain.jpg

<p>Omni Channel Content Specialist| enthusiastic personal finance writer | Top50 CM professional by WMC, CMO</p>

<p>A cash shortfall can strike anytime. Thankfully, a personal loan can meet any financial deficit easily. An individual who is above 18 years of age and has a regular income is eligible for a personal loan in India. All banks and non-banking financial companies operating in India advance such loans.</p>

<h2><strong>How to Get a Personal Loan without Salary Slip in 2021?</strong></h2><p>If you have to qualify for a personal loan and, as a matter of fact, any loan, the prime requirement is repayment capacity. More so for a personal loan since the risk of recovery is very high in the absence of security. Your monthly income is the metric for repayment capacity. That is why the salary slip has been made a mandatory document to proceed with processing a loan application. How to get a loan without a salary slip<strong> </strong>and is it really possible to get a personal loan when you do not have your salary slip is the main concern of individuals/professionals who are self-employed. With alternate income documents, it is possible for both salaried and self-employed individuals/professionals to get a personal loan without a salary slip.</p><h2><strong>How to get a personal loan without a salary slip?</strong></h2><p>There are several individuals who work for a monthly salary, but there are no records like salary slips for the salary they are drawing as they are being paid by cash. In such cases, how to get a personal loan without a salary slip?&nbsp;</p><p>Lenders review the financial profile of an applicant to gauge the repayment capacity before conveying a credit decision. Scrutinising the salary slip is a part of reviewing your financial strength. What could you do to prove the repayment capacity in the absence of a salary slip? There are indeed other documents that vouch for your monetary strength. Even a person who draws salary by cash will have a bank account wherein they would be depositing the salary drawn. A consistent deposit of cash on the same dates every month is proof enough of the cash salary drawn. So a bank statement, account passbook, Form 16 or ITR can be submitted as income proof in the absence of a salary slip for a personal loan without a salary slip.</p><p>In the case of self-employed individuals/professionals, audited financial statements like balance sheet and profit and loss account along with ITRs with income computation serve as income proof for a personal loan without a salary slip.</p><h2><strong>How to avail of a personal loan without a bank statement?</strong></h2><p>In the absence of a salary slip, you can still avail of a personal loan by submitting an alternate income proof, i.e., a bank statement, especially for the self-employed. Self-employed individuals/professionals will have a bank account to carry out business transactions, and by consolidating the sales/service receipts routed through the bank, the lender can get an idea about the turnover of the business.&nbsp;</p><p>Similarly, in the case of salaried individuals, the salary will be routed through a bank account, and so with a bank statement, the lender can ascertain the monthly income of the applicant.</p><p>But how to avail of a personal loan without a salary slip and bank statement.&nbsp;</p><p>If you do not have a bank statement, you can still apply for a personal loan with Audited financial statements and ITRs with income computation if you are self-employed. Salaried individuals can produce Form 16 as income proof. These alternate documents suffice to validate your income. Establishing a good relationship with your lender and maintaining a high credit score will help in these circumstances.</p><p>Yet another way to get a personal loan without a salary slip and bank statement<strong> </strong>will be by including a co-applicant with a steady source of income and high credit score — the co-applicant shares equal responsibility for the repayment of the loan. The income of the co-applicant will instil confidence in the lender about your repayment capacity. The creditworthiness of the co-applicant will be the yardstick to decide your eligibility for the personal loan.&nbsp;</p><h2><strong>Other documents required to avail a personal loan without a salary slip</strong></h2><p>If you are a self-employed individual or a freelancer or hired on a contract basis, you will have to apply for a personal loan without a salary slip. How to get a personal loan without a salary slip?</p><p>It is possible to avail of a personal loan without a salary slip by producing alternate documents that validate your monthly/annual income. If your work is on a freelance basis and you get paid by cash or are hired contractually, you can submit the following alternate documents.</p><ul><li><strong>Bank Statement</strong>: Even if your salary is being paid by cash and there is no record for your monthly emoluments, it is certain that you will be depositing the cash salary into a bank account. The regular deposit of a similar amount of cash every month is good enough to prove a stable income source. Self-employed individuals/professionals will route their business transactions through bank accounts. Hence you can produce a bank statement as an alternate income proof.</li><li><strong>Certificate from Employe</strong>r: A certificate from your employer on a letterhead proves your association with the organisation. The certificate should contain the details like your name, employment details and itemised monthly emoluments. This will indicate the job as well as income stability.</li><li><strong>Income Tax Returns</strong>: If you are a taxpayer, then you can produce Income Tax Returns for the last 2 or 3 years to prove the stability of income.&nbsp;</li><li><strong>Form 16</strong>: Form 16 issued by the employer will have the information of the total income, deductions and the tax deducted for a particular financial year. This is valid income proof that can be submitted while availing of a personal loan without a salary slip.</li><li><strong>Audited Financial Statement: </strong>Audited financial statements like balance sheet and profit and loss account will reflect the financial health of an institution. The financial profile of a company can be reviewed with this document.</li></ul><p>Along with the above-mentioned income proof, you will have to submit the standard KYC documents like Aadhar Card, laAN Card, Passport or Driving Licence as proof of residence and proof of identity.</p><h2><strong>Tips to avail personal without a salary slip in India</strong></h2><p>Validating the income is a part of the loan processing ordeal, and salary slips are the most authentic mode of income validation. Having said this, not always can you produce a salary slip to prove your repayment capacity. There are some categories of borrowers who are unable to submit a salary slip for a personal loan. Then how do they establish their income source, or how can they get a personal loan without a salary slip?<strong>&nbsp;</strong> Here are some valuable tips that will enable you to go ahead with the loan process without a salary slip.</p><ul><li><strong>Credit Score</strong>: Aim at maintaining a credit score above 750. A score above 750 is very appealing to the lenders as it indicates your financial management acumen, your commitment towards loan repayments and establishes your creditworthiness. It gives assurance to the lenders about your responsibility towards EMI servicing.</li><li><strong>Provide other documents</strong>: If you have been out of a job for a while and do not have the latest salary slips and if you are self-employed or being paid a cash salary, it is not impossible to establish your income source without a salary slip. An income certificate from the employer, Audited Financial Statements, Bank Account Statement, Form 16 or ITRs can serve as alternate documents for review of income.</li><li><strong>Avail a secured loan</strong>: You can do without a salary slip for a personal loan if you offer adequate security by way of gold, immovable property, LIC policies or NSCs. These securities will serve as a recovery backup for the lenders in case you default on the repayment.</li><li><strong>Include a co-applicant</strong>: Including a co-applicant with a salary slip indicating a stable source of income can be a good option. A good credit score is mandatory for the co-applicant as well. You will be able to get a personal loan without a salary slip based on the creditworthiness of the co-applicant. The co-applicant is equally responsible for the repayment of the loan, and in case you fail to repay the loan on time, the lenders can fix the co-applicant for the repayment.</li><li><strong>Approach a lender with liberal eligibility criteria: </strong>Various NBFCs have simple eligibility criteria to qualify for a personal loan. They have independent algorithms to establish the creditworthiness of the applicant. Choosing one such lender will fulfil your requirement of a personal loan without a salary slip.</li></ul><h3><strong>Frequently Asked Questions</strong></h3><h4><strong>✅How can you establish your creditworthiness to avail a personal loan in the absence of a salary slip and bank statement?</strong></h4><p>Salary slips and bank statements are indeed authentic proofs to establish your income source and stability. But then how to get a personal loan without a salary slip and bank statement. As the old saying goes, ‘every problem has a solution, even this issue has a solution. You can produce alternate documents like ITRs, Audited Financial Statements, Form 16 or an Income Certificate from the employer as income proof and proceed with your personal loan application process.</p><h4><strong>✅ How can an income certificate from the employer substitute a salary slip?</strong></h4><p>An income certificate is issued on the letterhead of the employer and contains item-wise details of the monthly emoluments. The structure of the certificate will be almost similar to a salary slip and can substitute a salary slip to prove the income source.</p><h4><strong>✅What happens if you are drawing a cash salary and the employer does not issue a salary slip? Can you apply for a personal loan?</strong></h4><p>If you are depositing the salary amount in your bank account and carrying on all your transactions (both debit and credit) through the account, the bank statement will be accepted as income proof in place of a salary slip. An income certificate from the employer will also be accepted as income proof.</p><h4><strong>✅ What are the options to get a personal loan without a salary slip and bank statement?&nbsp;</strong></h4><p>The option to get a personal loan without a salary slip and bank statement would be to apply with a co-applicant with a steady income. The co-applicant with a good score having the required income documents will be the ideal option. The steady income source of the co-applicant will be an assurance of the repayment capacity. The co-applicant is as good as the primary borrower in terms of responsibility towards repayment of the loan.</p><h4><strong>✅What are the best ways to adapt to avail of a personal loan without a salary slip?</strong></h4><p>You can still avail of a personal loan sans a salary slip by adopting the following tips.</p><ul><li>Aim at a consistent credit score of 750 and above as it will assure the lender about your repayment capabilities and your acumen in managing finances. You will be considered a responsible borrower and will even be offered better interest rates.</li><li>Provide alternate income documents like a bank statement, Form 16, and ITR if you are a salaried individual. If you are self-employed, you can submit Audited Financial Statements and ITRs with income computation.</li><li>Approach NBFCs with less complicated eligibility criteria to qualify for the loan. NBFCs assess the creditworthiness of an applicant with independent algorithms with different assessment methods based on the digital footfall of the applicant.</li><li>By pledging securities like gold, LIC policies or NSCs or by mortgage of immovable property. It is easier to avail of a secured personal loan as the lender will have a backup source for recovery in case if you fail to repay the loan as agreed.</li></ul>

How to Get Personal Loan without Salary Slip in 2021?

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A self-employed person needs to figure out how to get a personal loan without salary slip. Here are simple ways to get a personal loan without salary slips.

How to Get a Personal Loan without Salary Slip in 2021? - MyMoneyMantra

<p>If you have to qualify for a personal loan and, as a matter of fact, any loan, the prime requirement is repayment capacity. More so for a personal loan since the risk of recovery is very high in the absence of security. Your monthly income is the metric for repayment capacity.&nbsp;</p>

<p>At times of unexpected financial emergencies or expenses, you may apply for debt to get by. Personal loans are one of the best forms of credit during these situations. These loans are best if you need a specific amount on a one-time basis. A personal loan is an instalment or EMI based loan that is to be repaid over a set term or tenure along with interest.&nbsp;</p><p>A personal loan is extremely versatile and can come in different forms. Following are different types of personal loans that are available in India:</p><h2><strong>Unsecured Personal Loan</strong></h2><p>An unsecured personal loan is not backed by any asset or collateral, and therefore it can be easier to acquire this type of personal loan. You must have a good credit score (typically 750 or above) and a regular source of sufficient monthly income (usually Rs. 25,000 per month) to get these<strong> </strong>types of unsecured loans.</p><h2><strong>Secured Personal Loan</strong></h2><p>As the name suggests, a secured personal loan is borrowed against collateral, such as a home, car, savings account, insurance, gold or another asset. In case you default on the loan, the lender can seize the mortgaged asset to cover all or a portion of the balance. The interest rates on various types of secured loans are usually lower than unsecured loans. You can avail of personal loans secured or unsecured depending on the availability of collateral.</p><h2><strong>Personal Line of Credit</strong></h2><p>A personal line of credit is a revolving form of credit, similar to a credit card. Unlike an instalment loan that involves a lump sum to be repaid in EMIs, borrowers get access to a line of credit up to a specific amount that can be borrowed whenever needed. Interest is levied only on the outstanding balance. You need an excellent credit score and good credit history to <a href="https://www.mymoneymantra.com/line-of-credit"><strong>apply for a line of credit</strong></a>.</p><h2><strong>Personal Loan Against Credit Card</strong></h2><p>Your credit card can offer a cash advance, which is a short-term personal loan that you can borrow against your credit card’s available balance. Even though you are using your credit card, you will not necessarily have the same rate of interest on a <a href="https://www.mymoneymantra.com/loan-on-credit-card"><strong>credit card loan</strong></a> as a normal purchase. The interest may begin accruing as soon as you withdraw the money, and you will likely face a processing fee.</p><h2><strong>Pension Loan</strong></h2><p>Pension loans are personal loans exclusively for retired personnel. The usual eligibility criteria do not apply for this loan scheme. Under a pension loan, some banks may provide 7 to 10 times the amount of pension pensioners drew the month previous to submitting their loan application. These loans come with longer tenure and shorter loan amounts.</p><p>Personal Loans can be categorized based on different interest rates types, such as follows:</p><h2><strong>Fixed Interest Rate Personal Loan</strong></h2><p>Personal loans usually come with fixed rates of interest, which means the interest rate remains unchanged for the entire tenure of the loan, and so does your monthly payment or EMI. For these types of loans offered by banks,<strong> </strong>you will know exactly how much your EMI will be each month. A <a href="https://www.mymoneymantra.com/mmm/personal-loan-emi-calculator.html"><strong>Personal Loan EMI Calculator</strong></a> can help you estimate your EMI even before you apply for the loan.</p><h2><strong>Adjustable Interest Rate Personal Loan</strong></h2><p>Some lenders may also offer adjustable/ variable/ floating interest rate personal loans. Under this loan, the interest rate is subject to change over time rather than having the same rate of interest forever. The interest rate for this loan typically starts off quite low, and after a certain time frame, it may increase depending on market conditions, so the EMI can go up or down.</p><p>Lenders may offer personal loans based on the requirement of the borrower. Personal loan types based on requirements can be categorized in the following variants:</p><h2><strong>Personal Loan for Debt Consolidation&nbsp;</strong></h2><p>A Debt Consolidation Loan is a type of personal finance that is obtained for paying off multiple existing loans and credit card debts with a single Personal Loan through single monthly instalments. It can help you reduce overall monthly costs into one affordable payment.</p><h2><strong>Wedding Loan</strong></h2><p>If you have a wedding wishlist, like a dream destination wedding, a gorgeous diamond ring, tempting cuisine, dreamy decor and designer wedding outfits, you can <a href="https://www.mymoneymantra.com/marriage-loan"><strong>apply for a marriage loan</strong></a> or wedding loan. This loan covers all your wedding-related expenses, including catering, makeup, venue booking, photography, hiring choreographers and event managers, shopping for a perfect wedding dress and jewellery, and so on.</p><h2><strong>Travel Loan</strong></h2><p>A travel loan, also known as a vacation loan, can be obtained to soothe your wanderlust. This loan covers all the travel-related expenses, including flight tickets booking, accommodation, local fares (taxis, ferries, etc.), travel insurance, visa fees, activities (scuba diving, snorkelling, paragliding, skydiving, etc.), meals, tour guide, and so on. You can <strong>apply for a holiday loan</strong> to go on a dream vacation with your family, friends and loved ones without having to worry about money.</p><h2><strong>Home Renovation Loan</strong></h2><p>If you want to give your old home a new makeover, you can <a href="https://www.mymoneymantra.com/blog/top-5-home-renovation-loans-for-2019-in-india"><strong>apply for a home renovation loan</strong></a>. This loan covers the home renovation and repair expenses, such as remodelling of the kitchen, buying new furniture, interior designing of your house, paint, changing electrical wiring, getting new fixtures and fittings, and so on.</p><h2><strong>Medical Emergency Loan</strong></h2><p>As clear from the name, a medical emergency loan can be availed of for catering to your urgent medical needs, such as paying off medical bills, urgent treatment or surgery, checkups, and so on. These loans come handy when you don’t have medical insurance or the limit of the insurance is not enough to cater to the expenses.</p><h2><strong>Higher Education Loan</strong></h2><p>A higher education loan can be obtained by a borrower to pay for the higher education of their family members or themselves. This loan helps you pay off the admission fee, tuition fee, books purchase and other expenses related to education.</p><h2><strong>Personal Loan for COVID</strong></h2><p>The impact of the COVID-19 virus and the pandemic has changed the lives of all directly or indirectly. It has impacted several people as many lost their jobs or went financially broken by paying off for the treatment of their own and/or their loved ones. To cater to this ongoing need of the Indian citizens, many lenders have launched a <a href="https://www.mymoneymantra.com/blog/sbi-kavach-personal-loan-scheme-for-covid-19-expenses"><strong>special personal loan for COVID</strong></a>. This personal loan is usually offered at concessional rates and with zero or nominal processing fee to reduce your burden during the stressful times of the pandemic. This loan helps you manage COVID-19 related medical expenses and tackle the challenges that lie ahead.</p><p>Some lenders may also offer different types of personal loans based on different categories of borrowers, such as follows:</p><h2><strong>Personal Loan for Salaried Employees</strong></h2><p><a href="https://www.mymoneymantra.com/personal-loan-for-salaried"><strong>Personal loans for salaried employees</strong></a> are designed especially for the financial needs of salaried individuals to meet the cost of any vacation, medical emergency, education, wedding, home renovation, and so on. For this loan, the lender requires you to have a specific minimum net monthly income depending on the city of residence and employment status.</p><h2><strong>Personal Loan for Self-employed</strong></h2><p>These are <a href="https://www.mymoneymantra.com/personal-loan-for-self-employed"><strong>personal loans for self-employed professionals</strong></a> (such as doctors, chartered accountants, architects, engineers, etc.) and non-professionals. These loans can be obtained for the personal as well as professional needs of self-employed applicants. The interest rates on these loans are slightly higher than that of personal loans for salaried employees due to the unavailability of regular income sources.</p><h2><strong>Personal Loan for Teachers</strong></h2><p>Most teachers at private or government schools/ colleges have fixed monthly salaries. There can be situations when they need urgent financial aid. So to help them overcome any added overheads, a Personal Loan for teachers is offered by various lenders. If you are a teacher who needs extra funds for personal needs, a personal loan for teachers is the best choice.&nbsp;</p><h2><strong>Personal Loan for NRIs</strong></h2><p>Some lenders may also offer special <a href="https://www.mymoneymantra.com/blog/5-best-personal-loan-offers-for-nris-in-india"><strong>personal loans for NRIs</strong></a>. These loans help in funding the personal financial needs of Non-Indian Residents (NRIs). The eligibility criteria and charges for this loan can be different from other personal loan variants.</p><h2><strong>Personal Loan for Women</strong></h2><p>To help women meet their financial needs, many banks offer special <a href="https://www.mymoneymantra.com/blog/5-available-personal-loans-for-working-women-in-india"><strong>personal loans for women</strong></a>. These loans can be used for funding your higher education, travel plans, wedding, or any emergency expenses. These loans are usually available at competitive rates of interest, and some lenders may also offer a special concession on interest rates.</p><h2><strong>Personal Loan for Government Employees</strong></h2><p><a href="https://www.mymoneymantra.com/personal-loan-for-government-employees"><strong>Personal loan for government employees</strong></a> is tailored specifically for salaried government employees to help them cater to their personal needs. These loans are available to employees of public sector undertakings or PSUs, including central, state and local government bodies. It can be obtained for a medical emergency, a sudden travel plan, a wedding venue booking, home renovation, and so on. This loan is offered at discounted rates and longer tenure.</p><h2><strong>Personal Loan for Students</strong></h2><p>A student loan can be availed of by students for various education-related needs, such as getting admission to the best of universities or pursuing a professional course to hone their skills. Unlike an education loan, which is made only for education expenses, a <a href="https://www.mymoneymantra.com/blog/how-to-get-a-personal-loan-for-students-in-india"><strong>personal loan for students</strong></a> can be used for a wide range of purposes, including education as well as personal. It can be used to fund your own education or that of a child/ family member. You are not even required to pledge your assets to get this loan. Before apply for the loan make sure to check which student loans are the best.</p><p>Types of loans in bank come in various forms to cater to the financial needs of every customer segment. You can apply for a personal loan online and get a loan amount up to Rs. 50 Lakhs for tenure up to 6 years, at attractive interest rates and processing charges. This loan requires minimum documentation and comes with easy eligibility criteria, making it the best financial alternative in times of need.</p><p>To know which personal loan you should apply for, you must know what are the different types of loans offered by banks.</p><figure class="image"><a href="https://www.mymoneymantra.com/personal-loans/"><img src="https://d1lt2ralzv8247.cloudfront.net/images/origin/Instant_Loan_Online_2_560b73ef3a.jpg" alt="Instant Personal Loan Online"></a></figure>

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Different Types of Personal Loans - MyMoneyMantra

Reshma Rawat

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<h2><strong>How much Personal Loan Can I Get on 50000 Salary in India?</strong></h2><p>Personal loans are an easy solution for immediate cash requirements during uncertainties. Personal loans not only come in handy during emergencies but also enable you to plan a wedding, a holiday, consolidate debts, invest in property etc. Suppose you are earning a salary of Rs. 50000/- and would intend to avail of a personal loan for any of the above-mentioned purposes, you will wonder as to how much personal loan can I get on 50000 salary. The loan amount again depends on your existing financial obligations vis-a-vis your present monthly income and your credit score.</p><h2><strong>How much personal loan can I get on 50000 salary?</strong></h2><p>If you intend to avail of a <b><a href="https://www.mymoneymantra.com/marriage-loan">personal loan to meet wedding expenses</a></b>, planning a holiday or invest in a property, the first thing that you would do is draw the budget for these purposes. The next concern would be how much personal loan can I get on 50000 salary, and will it be commensurate with the budget drawn for the required purpose?&nbsp;</p><p>All financial institutions adopt the multiplier method to arrive at the maximum loan amount for a declared income. The maximum loan provided will be 10 to 20 times the monthly gross income. The FOIR ratio will be drawn before approving the loan and deciding on the loan amount. Your existing EMIs, credit card dues, mandatory bills, as well as the proposed EMI will be considered while drawing the FOIR. If the FOIR exceeds 40% to 50%, then either the loan will be rejected, or the EMI for the proposed loan will be managed by increasing the tenure so as to accommodate the FOIR within the benchmark level of 40% to 50%.</p><p>Considering that FOIR is within the desired level, you can apply for a personal loan on 50000 salary and get <b><a href="https://www.mymoneymantra.com/5-lakh-personal-loan">loan upto Rs. 5 lakhs</a></b> or <a href="https://www.mymoneymantra.com/10-lakh-personal-loan"><b>Rs. 10 lakhs</b></a> depending on the internal credit policy of the lender you have chosen.</p><h2><strong>Eligibility criteria to avail a personal loan on 50000 salary</strong></h2><p>The <b><a href="https://www.mymoneymantra.com/personal-loan-eligibility">eligibility criteria</a></b> to be fulfilled to qualify for a personal loan on 50000 salary are given below.</p><ul><li>Age: The applicant should be within 21 to 58 years on the date of submitting the application.</li><li>Income: The minimum income requirement varies from lender to lender. It could vary anywhere between Rs. 15000/- to Rs. 25000/-. Some financial institutions have the minimum income stipulation based on the city of residence.</li><li>Employment: Both <b><a href="https://www.mymoneymantra.com/personal-loan-for-salaried">salaried</b></a>, as well as <a href="https://www.mymoneymantra.com/personal-loan-for-self-employed"><b>self-employed individuals</b></a>/professionals, are eligible for the personal loan. Salaried individuals employed with State/Central Government Organisations, PSUs or any reputed private company are more likely to get a personal loan easily.</li><li>Job Stability: Salaried individuals/professionals should have a minimum work experience of 1 to 2 years and should have been with the current employer for a minimum of 6 months. For self-employed individuals/professionals, business existence of a minimum of 3 to 5 years is mandatory.</li><li>Credit Score: The desired level of credit score varies from 700 to 750 and above, depending on the lender.</li><li>Debt to income ratio: The debt to income ratio should not exceed 40% to 50%. Some of the lenders stipulate 40% of monthly income, while some of them permit up to 50% of monthly income.</li></ul><h2><strong>Documents required for a personal loan on 50000 salary</strong></h2><p>There are some mandatory <b><a href="https://www.mymoneymantra.com/documents-required-for-personal-loan">documents required to avail personal loan</b></a> on 50000 salary. They are:</p><p><strong>KYC documents</strong>: Aadhar Card, PAN Card, Voter’s ID, Passport</p><p><strong>Income Proof</strong> <strong>for salaried individuals professionals: </strong>Latest Salary slips(last three months), Form 16, 6 months bank account statement of salary account.</p><p><strong>Income Proof for self-employed individuals/professionals</strong>: Audited financial statement and Income Tax Returns with Income computation for the last two years. 1-year bank account statement of operative account.</p><p><strong>Job Stability Proof</strong>: Appointment letter of the current employer or contract agreement from the current employer.</p><p><strong>Business existence proof:</strong> GST Certificate, MOA, AOA, Partnership Deed, Shops and Establishment Act certificate.</p><p><strong>Signature Proof: </strong>PAN Card, Passport, Certificate from Bank</p><p><strong>Age Proof</strong>: PAN Card, Aadhar Card, Voter’s ID, Passport</p><h2><strong>Best Personal Loan Interest Rates in India 2021</strong></h2><p>&nbsp;A list containing existing personal interest rates offered by top banks/NBFCs is given below to enable a comparison of the latest interest rates in the market.</p><figure class="table"><table><tbody><tr><td>Name of the Bank/<b><a href="https://www.mymoneymantra.com/nbfc-personal-loan">NBFC</b></a></td><td>Interest Rate</td></tr><tr><td><b>Bandhan Bank</b></td><td>15.90% onwards</td></tr><tr><td><a href="https://www.mymoneymantra.com/personal-loans/tata-capital"><b>Tata Capital</b></a></td><td>10.50% onwards</td></tr><tr><td><b><a href="https://www.mymoneymantra.com/personal-loans/bajaj-finserv">Bajaj Finserv</a></b></td><td>12.99%&nbsp;</td></tr><tr><td><b><a href="https://www.mymoneymantra.com/personal-loans/dbs-bank">DBS Bank</b></a></td><td>10.99% onwards</td></tr><tr><td><a href="https://www.mymoneymantra.com/personal-loans/deutsche-bank"><b>Deutsche Bank</a></b></td><td>10.99% onwards</td></tr><tr><td><b><a href="https://www.mymoneymantra.com/personal-loans/sbi"><b>State Bank of India</b></a></td><td>9.60% onwards</td></tr><tr><td><b>Muthoot Finance</b></td><td>14.50% onwards</td></tr><tr><td><b><a href="https://www.mymoneymantra.com/personal-loans/indian-bank">Indian Bank</b></a></td><td>9.05% onwards</td></tr><tr><td><b><a href="https://www.mymoneymantra.com/personal-loans/federal-bank">Federal Bank</b></a></td><td>10/49% onwards</td></tr><tr><td><b><a href="https://www.mymoneymantra.com/personal-loans/axis-bank">Axis Bank</b></a></td><td>12% onwards</td></tr></tbody></table></figure><h2><strong>Steps to Avail a Personal Loan on 50000 salary</strong></h2><p>After you have done the groundwork before applying for a personal loan on 50000 salary, the next step will be applying for the loan. Applying for a personal loan comprises a simple procedure, and it is furnished below. Follow the step-to-step guide to complete the application process.</p><ul><li>You will have to access the website of the bank/NBFC.</li><li>Go to ‘Loans’ or ‘Products’ and choose ‘Personal Loan.’</li><li>On the personal loan page, click on the ‘Apply Now’ tab.</li><li>An online application will crop up.</li><li>Fill in the required personal, contact, and income details. Agree to the terms and conditions and click on the submit button.</li><li>For the monthly income and the existing EMI details provided, the eligible offers will be displayed.</li><li>If you are convinced of the offer, click on the continue button.</li><li>You will be directed to upload mandatory documents, or a message will appear that the representative of the bank/NBFC will contact you for further details.</li><li>The documents and the details provided will be verified, and on proper appraisal of the application, the credit decision will be conveyed either through SMS to the registered mobile number or vide email to the registered email ID.</li><li>Execution of the prescribed documents is the final step.</li><li>The loan amount will then be credited to your bank account.</li></ul><p>You can also apply for the loan by visiting a branch and submitting the application after getting the entire details of the personal loan on 50000 salary like the interest rate, the maximum amount eligible, processing charges, etc. You should go equipped with mandatory documents if you intend to apply for a personal loan.</p><h2><strong>How can I improve my eligibility for a personal loan on 50000 salary?</strong></h2><p>The maximum personal loan amount permitted for a salary of 50000 will be Rs. 5.00 lakhs to Rs. 10.00 lakhs. If you desire to avail of the maximum amount, you should be eligible for the same. The eligibility depends on the debt to income ratio, credit score, income and repayment capacity. In case you are not eligible for the maximum limit, then you should deliberate on ways to improve your eligibility. Here are a few pointers that can help you enhance your eligibility.</p><ul><li>Declare other sources of income like rent, fixed deposit interest, dividends, etc., to enhance the income level. With an enhanced income level, the debt to income ratio will improve, which will accommodate for an increased EMI. Your ability to pay a higher EMI will, in turn, enhance your eligibility.</li><li>Work on improving the credit score. Pay off some of the existing loans if you have to improve your credit score. With a higher credit score, you will be offered a lower interest rate that will impact the eligibility.</li><li>Avoid any action that will deplete the credit score. One of the critical actions to avoid is multiple applications for a personal loan simultaneously with various lenders. Every time you submit an application, a credit report will be drawn, which will be recorded in your credit history. For every enquiry, your credit score will decrease by 50 to 70 points. If you intend to successfully avail of a personal loan, maintain a gap between enquiries. Do not jump to the next lender the moment one of them rejects your application.</li><li>Opt for a longer tenure to lower the EMI so that your existing income can fetch you a higher loan amount.&nbsp;</li><li>Improve your debt to income ratio by paying off existing loans, including credit card dues.</li><li>Include a co-applicant who has a regular income. The credit score of the co-applicant also should be 750 and above.</li></ul><h3><strong>Frequently Asked Questions</strong></h3><h4><strong>✅ What is FOIR, and how is it calculated?</strong></h4><p>FOIR is one of the prominent parameters that financial institutions consider to gauge repayment capacity. It is a yardstick to measure the residual amount that will be available out of the monthly income for your sustenance after meeting the fixed obligations like EMI of existing loans, utility bills, credit card dues and the EMI of the proposed personal loan. The formula to compute the FOIR is&nbsp;</p><p>FOIR= [Total of existing fixed obligations including the proposed EMI/Monthly Income] X 100</p><p>The FOIR should ideally be within 40% to 50% of the monthly income.&nbsp;</p><h4><strong>✅What is the maximum loan amount offered for a salary of Rs. 50000/-?</strong></h4><p>The maximum personal loan limit for a salary of 50000 depends on the lender of your choice. If the lender provides ten times the monthly salary, you will be able to get Rs. 5.00 lakhs, and if the lender provides 20 times the monthly salary, you will be able to get Rs. 10.00 lakhs provided you have a good credit score and the FOIR is within the desired level of 40% to 50% of the monthly income.</p><h4><strong>✅. What are the factors that affect the eligibility of a personal loan on 50000 salary?</strong></h4><p>The following are the factors that affect the eligibility of a personal loan are&nbsp;</p><p><strong>Rate of interest:</strong> Before deciding on availing of a personal loan, you should compare the interest rates of various banks/NBFCs and choose the lowest of all. With a lower rate of interest, the EMI also will be lower. This will enable you to get a higher loan amount.</p><p><strong>Credit Score</strong>: With a higher credit score, you will be offered a personal at the best rate, which will impact the EMI. The lower the EMI, the higher will be the eligible loan amount.</p><p><strong>Income:</strong> Your monthly income is the main parameter that will decide your repayment capacity. Increase the income by either declaring other income sources, if any or include a co-applicant with a stable income.</p><p><strong>Tenure</strong>: The tenure you choose has a direct impact on the loan amount. If you have a high income and you can afford a higher EMI, you can opt for a short tenure. But if your income is not adequate, then you can choose a longer tenure to reduce the EMI in order to enhance the eligibility.</p><h4><strong>✅Is debt consolidation by availing a personal loan a good option?</strong></h4><p>If your existing debts comprise loans and credit card dues with heavy interest rates, then it is advisable to pay off these debts by availing of a personal loan which will be available at a comparatively lower rate. You can reduce the cost of the loan by doing so.</p><h4><strong>✅ What is the maximum tenure that will be available for a personal loan?</strong></h4><p>The maximum tenure that will be available for a personal loan will be 36 months to 60 months, depending on the lender.</p>

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Suppose you are earning a salary of Rs. 50000/- and would intend to avail of a personal loan for any of the above-mentioned purposes, you will wonder as to how much personal loan can I get on 50000 salary. 

How much Personal Loan Can I Get on 50000 Salary in India?

<p>Suppose you are earning a salary of Rs. 50000/- and would intend to avail of a personal loan for any of the above-mentioned purposes, you will wonder as to how much personal loan can I get on 50000 salary.&nbsp;</p>

<h2><strong>How much Personal Loan Can I Get on 25000 Salary in India?</strong></h2><p>Personal loans are very popular owing to the flexible usage options and the quick turnaround time. Now you can avail loan at one click if you satisfy the <a href="https://www.mymoneymantra.com/personal-loan-eligibility"><b>personal loan eligibility criteria</b></a> set out by individual financial institutions. The loan amount will land in your bank account within seconds if you are an existing customer of the lender and within hours if you are a new customer.&nbsp;</p><p>The main criteria to decide on the loan amount for the personal loan is your income and the repayment capacity. The repayment capacity is assessed based on the existing fixed financial obligations versus your net monthly income. Ideally, the ratio should be 50% and above.&nbsp;</p><h2><strong>How Much Personal Loan Can I Get on 25000 Salary?</strong></h2><p>You opt for a personal loan only when you are in dire need of finance and when your savings will not suffice your requirement. But you will wonder how much personal loan can I get on 25000 salary and will it be adequate to suit my requirements.</p><p>The calculation of the Personal Loan amount varies from lender to lender depending on their internal credit policies. However, the general criterion is that the minimum FOIR or Fixed obligation to Income ratio should not exceed 40% to 50% of the net income after considering the EMI for the proposed loan. The maximum loan amount that will be permitted will generally be 10 months of the gross salary, and so you will be able to get a personal loan up to Rs. 250000/- provided the FOIR criteria is complied with.</p><p>It is recommended to be aware of the proposed EMI before applying for the loan. You can calculate the EMI easily with the <b><a href="https://www.mymoneymantra.com/mmm/emi-calculator.html">EMI calculator</a></b> available on the official websites of the lenders.</p><h2><strong>Eligibility Criteria to Avail Personal Loan on 25000 Salary</strong></h2><p>Most of the financial institutions provide <b><a href="https://www.mymoneymantra.com/personal-loan-for-salaried">Personal Loans for both salaried</b></a> as well as <a href="https://www.mymoneymantra.com/personal-loan-for-self-employed"><b>self-employed individuals</b></a>/professionals. However, some of the banks restrict the loan to only salaried individuals.&nbsp;</p><p>The eligibility criteria to avail personal loan on 25000 salary are as follows:</p><figure class="table"><table><tbody><tr><td>Criteria</td><td>Salaried</td><td>Self-employed</td></tr><tr><td>Age</td><td>21 years to 60&nbsp; years</td><td>25 years to 65 years</td></tr><tr><td>Work Experience</td><td>Minimum 2 years with a minimum work experience of 6 months with the current employer</td><td>Minimum 3 to 5 years in the current business</td></tr><tr><td>Relationship with&nbsp; the lender</td><td>Minimum 6 months</td><td>Minimum 12 months</td></tr><tr><td>Residential status</td><td>Indian citizen</td><td>Resident Indian</td></tr><tr><td>Credit Score</td><td>750 and above</td><td>750 and above</td></tr><tr><td>Employer</td><td>Government Organisation/Public Sector Undertakings/PSBs, MNCs and any Reputed Companies.</td><td>Not Applicable</td></tr></tbody></table></figure><p>The above-mentioned eligibility criteria is a general one and could vary from lender to lender. The lenders, at their discretion, may vary the eligibility criteria based on the customer’s profile.</p><h2><strong>Documents Required</strong></h2><p>KYC and Income documents as detailed below have to be submitted while applying for a personal loan on 25000 salary</p><figure class="table"><table><tbody><tr><td>Type of document</td><td>Details</td></tr><tr><td>Application form</td><td>Relevant application form duly filled and signed</td></tr><tr><td>Photo Identity Proof</td><td>Passport, Aadhar Card, Voter’s ID, PAN Card, Driving Licence (anyone)</td></tr><tr><td>Address Proof</td><td>Aadhar Card, Utility bills, Voter’s ID Card, Driving Licence, Passport (anyone)</td></tr><tr><td>Signature Proof</td><td>PAN, Passport, Bank Certificate (anyone)</td></tr><tr><td>Age Proof</td><td>Passport, Birth Certificate, PAN Card, Voter’s ID, Aadhar Card (anyone)</td></tr><tr><td>Income Proof</td><td><p><strong>For salaried individuals</strong></p><p>Latest salary slips(3 months)</p><p>Form 16 and ITR</p><p>Bank statement for last 6 months of salary account.</p><p><br>&nbsp;</p><p><strong>For self-employed&nbsp; individuals/professionals</strong></p><p>Audited financials along with ITRs with income computation for the last two years</p><p>Bank account statement for the last one year of the main operative account</p></td></tr></tbody></table></figure><h2><strong>Best Personal Loan Interest Rates 2021 in India</strong></h2><p>A comparative list of the prevailing interest rates of Top financial institutions for 2021 in India is given below.</p><figure class="table"><table><tbody><tr><td>Name of the financial institution</td><td>Interest Rate</td></tr><tr><td><b><a href="https://www.mymoneymantra.com/personal-loans/canara-bank">Canara Bank</b></a></td><td>10.20% to 13.30%</td></tr><tr><td><b><a href="https://www.mymoneymantra.com/personal-loans/bank-of-baroda">Bank of Baroda</b></a></td><td>10.50% to 12.50%</td></tr><tr><td><a href="https://www.mymoneymantra.com/personal-loans/central-bank-of-india"><b>Central Bank of India</b></a></td><td>9.85% to 10.05%</td></tr><tr><td><a href="https://www.mymoneymantra.com/personal-loans/tata-capital"><b>Tata Capital</a></b></td><td>10.50% to 24%</td></tr><tr><td><a href="https://www.mymoneymantra.com/personal-loans/bajaj-finserv"><b>Bajaj Finserv</a></b></td><td>12.99% onwards</td></tr><tr><td><a href="https://www.mymoneymantra.com/personal-loans/indusind-bank"><b>Indusind Bank</a></b></td><td>11% onwards</td></tr><tr><td><a href="https://www.mymoneymantra.com/personal-loans/idfc-first-bank"><b>IDFC First Bank</b></a></td><td>10.49% onwards</td></tr><tr><td>Bandhan Bank</td><td>15.90% to 20.75%</td></tr><tr><td><a href="https://www.mymoneymantra.com/personal-loans/hdfc"><b>HDFC Bank</b></a></td><td>10.50% to 21%</td></tr></tbody></table></figure><h2><strong>Steps to Avail Personal Loans with Salary up to Rs. 25,000</strong></h2><p>Before applying for a personal loan on 25000 salary you will have to consider the following.</p><ul><li><strong>Eligibility</strong>: You should primarily check the eligible amount commensurate to your salary using the EMI calculator. You should keep in mind that the debt to income ratio should not exceed 40% to 50% of your net income after considering the proposed EMI. Consolidate all your existing commitments and arrive at the differential available income to service the EMI. Check eligibility keeping the affordable EMI in mind, and apply for the loan amount accordingly to hasten the approval process.</li><li><strong>Credit Score</strong>: Draw your credit report and check the credit score. If there are any discrepancies, then get is resolved through the customer support group of the credit bureau. The credit score should necessarily be between 700 to 750 to be eligible for the loan amount and also to get a good deal in terms of interest.</li><li><strong>Interest Rate</strong>: Compare the current <a href="https://www.mymoneymantra.com/personal-loan-interest-rates"><b>personal loan interest rate</b></a> in the market as well as the other charges and then approach the lender who is offering the best deal.</li></ul><p>Once all the above pointers are in place, apply for a personal loan on 25000 salary by filling an online application available on the official website of the vendor.</p><ul><li>Access the website of the lender.</li><li>Choose ‘Personal Loan’ under the ‘Loans’ option.</li><li>Click on the ‘Apply Now button.</li><li>You will be directed to the online personal loan application.</li><li>Input the required personal, contact and income details and submit the application.</li><li>You may have to scan and upload the required documents.</li><li>In the case of some lenders, the representatives will contact you will pick up the required documents from your doorstep.</li><li>The loan application will be processed, and if approved, the same will be communicated to you vide SMS or Email.</li><li>On execution of the documents, the loan proceeds will be credited to your account.</li></ul><p>If how much personal loan can I get for 25000 salary<strong> </strong>from the bank where my salary account is maintained is your concern then, you can check for a <b><a href="https://www.mymoneymantra.com/pre-approved-personal-loan">pre-approved personal loan</b></a> by logging in to net banking. If you are one of the select customers eligible for the loan, you can place a request by mentioning the loan amount and tenure, and the amount will be credited to your account within seconds.</p><p>In addition, you can also approach the nearest branch of the lender to apply for the loan via a loan application along with the required documents.</p><h2><strong>How can I improve the eligibility for a Personal Loan in India?</strong></h2><p>To improve the eligibility for a personal loan on 25000 salary in India, you will have to deliberate on the following points.</p><ul><li><strong>Credit Score</strong>: Maintain the credit score at 750 and above by paying the existing EMIs and credit card dues well before the due date. A good score is like a financial character certificate. It projects you as a responsible borrower who has a commitment towards repayment. If you have a good credit score, you will be categorised as a low-risk candidate, and the lender will offer a lower rate of interest as well.</li><li><strong>Avoid multiple enquiries</strong>: In a quest for urgent finance, you might land up making multiple enquiries simultaneously with various lenders. Every time an enquiry is made, the lenders will draw a credit report that will reflect your credit history. This will implicate you as a person desperate for credit and will not carry a good impression as far as the lenders are concerned. So you should avoid hopping from lender to lender seeking a loan.</li><li><strong>Pay off existing debts</strong>: Try to reduce your existing obligations by paying off some of the debts. This will help in improving the debt to income ratio, which will, in turn, improve your eligibility.</li><li><strong>Declare all income sources</strong>: In addition to your regular income, if you have any other source of income like rent, interest on deposits, dividends or any other income from investments, declare the sources to improve your eligibility.</li><li><strong>Add a co-applicant:</strong> You can add a co-applicant with a good credit score and regular income to improve the eligibility. The co-applicant can be a spouse, parent or child.</li></ul><h3><strong>Frequently Asked Questions</strong></h3><h4><strong>✅What are the criteria to calculate personal loan eligibility?</strong></h4><p>The personal loan eligibility will depend on various factors like credit score, income, repayment capacity, number of dependents, type of employment, and stability of income.</p><h4><strong>✅What is the eligible loan amount for a salary of Rs. 25000/-?</strong></h4><p>The loan amount is normally equivalent to 10 months gross salary. This may, however, vary from lender to lender depending on the internal credit guidelines. The maximum amount you can get for a personal loan on 25000 salary will be Rs. 250000/-This again depends on your income, repayment capacity and credit score. Credit Score because the interest rate depends on the credit score. The higher the credit score, the lower will be the interest. With a lower interest, the EMI will also be lower, and you will be able to get a higher loan amount.</p><h4><strong>✅ What are the different modes to repay a personal loan?</strong></h4><p>The different modes to repay a personal loan are:</p><ul><li>Registering standing instructions through NACH mandate</li><li>Setting up an AutoPay through net banking</li><li>Transfer through NEFT or RTGS</li><li>Post Dated Cheques</li></ul><p>The above-mentioned are common repayment modes. However, the repayment modes may differ from lender to lender.</p><h4><strong>✅ What is the credit score required for Rs. 25000 personal loan?</strong></h4><p>The credit score required for Rs. 25000/- personal loan will be 750 and above.</p><h4><strong>✅ How is the EMI for Rs. 25000 personal loans calculated?&nbsp;</strong></h4><p>The EMI is calculated using the formula [P x R x (1+R)^N]/[(1+R)^N-1] where P is the Principal, R is the rate of interest, and N is the tenure. You can try different variable combinations and arrive at the desired EMI that can fetch the maximum loan amount.</p><h4><strong>✅How does the credit score impact the Rs. 25000/- personal loan?&nbsp;</strong></h4><p>A good credit score speaks of your financial discipline and your commitment towards repayment of the loans and credit card dues promptly. You will be considered as a responsible borrower, and the lender will be convinced about your integrity and will offer you the loan at a lower rate. This will reduce the cost of the loan as the EMI will be low when the interest is low.</p><h4><strong>✅Is it always necessary to go for the lowest EMI while applying for a personal loan?</strong></h4><p>The EMI choice again depends on your repayment capacity. If your existing obligations are low and your debt to income is at a sufficiently lower level, then you can opt for a higher EMI and shorten the tenure. This will reduce the cost of the loan. It is not mandatory to choose the lowest EMI. Lowest EMI is only a convenient option to increase your eligibility.</p><h4><strong>✅ Is it a good option to pay off credit card dues with a personal loan?</strong></h4><p>If you have opted for a revolving credit for your credit cards and are habitual of paying only the minimum amount on the due date, the rate of interest charged on the outstanding balance is much higher than the interest on the personal loan. So it is highly recommended to avail of a personal loan and clear the credit card dues as you will have the option of consolidating all thee credit card dues and paying off with a personal loan to reduce the cost of the loan.</p>

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Personal loans are very popular owing to the flexible usage options and the quick turnaround time. Now you can avail of a personal loan at the click of a button if you satisfy the eligibility criteria set out by individual financial institutions. 

How much Personal Loan Can I Get on 25000 Salary in India?

<p>Personal loans are very popular owing to the flexible usage options and the quick turnaround time. Now you can avail of a personal loan at the click of a button if you satisfy the eligibility criteria set out by individual financial institutions.&nbsp;</p>

<h2><strong>Best Personal Loans for Bad Credit in India - Things You Should Be Aware Of</strong></h2><p>A bad credit score or no credit history are roadblocks when availing of a personal loan on favourable terms. Financial institutions do not advance loans for bad credit<strong> </strong>as a low credit score indicates a higher risk of default in payments. But thankfully, there are a few lenders who work with such borrowers. They tweak the terms and conditions and customize their lending, thus helping people get an urgent loan with bad credit in India. Let’s check out which bank gives personal loans with bad credit in India?</p><h2><strong>What are Loans for Bad Credit?</strong></h2><p>Loans for bad credit are advances that are approved for people who have a low credit score. A low credit score is either a reflection of poor or short credit history. But financial emergencies can strike anyone. Loans<strong> </strong>for bad credit<strong> </strong>act as a panacea and help applicants seek loans during times of need. These loans are approved at a higher rate of interest and customized terms and conditions. The loans for bad credit can be secured or unsecured, depending upon the lending company’s policies and the applicant’s profile.</p><h2><strong>Best Bad Credit Loans in India 2021</strong></h2><p>A borrower looking for an urgent loan with bad credit in India can choose between these best bad credit loans in India:</p><ul><li><strong>Secured Loans</strong> – Applying for a secured loan is the easiest way to get personal loans for bad credit. The loan is approved against collateral or security and therefore lowers the lender’s credit risk. This, in turn, helps the borrower avail of a loan at a lower rate of interest and favourable loan terms.</li><li><strong>Unsecured Loans</strong> – In case the borrower is unable to pledge any collateral, an unsecured loan can be applied for provided there is a stable income and low debt-income ratio. But the unsecured loan will be approved at a higher rate of interest.</li><li><strong>Loans From NBFC</strong> – The Non-Banking Financial Companies are lenient than scheduled banks when it comes to eligibility checks and credit scores. Therefore, the chances of getting loans for bad credit are more with NBFCs. But loans from NBFCs are approved at a higher rate of interest.</li><li><strong>Choose your Existing Banker </strong>– In case your credit score is low because of your no credit history, you can apply for an urgent loan for bad credit with your existing banker. Customers who are eligible for a personal loan, have a good relationship with the bank, and have a healthy financial track record will be approved for an urgent loan for bad credit by their existing bank.</li><li><strong>Apply for Current Account Overdraft </strong>– If you are a self-employed individual and have a current account in the bank, you can avail of an overdraft facility to meet the urgent financial shortfalls.</li><li><strong>Digital Lenders</strong> – Apart from banks and NBFCs, digital lenders also advance credit. These lenders operate through mobile apps. They do not have stringent eligibility checks. They advance short-term loans for bad credit without much hassle.</li></ul><h2><strong>Reasons for Low Credit Score in India</strong></h2><p>Low credit scores have great financial implications. But let’s understand what exactly causes a low or bad credit score:</p><ul><li><strong>Delayed credit card bill payments</strong> – Missing out or delaying credit card payments is the most important factor that causes a plunge in credit score. It is pertinent to mention here that the entire credit card outstanding is to be repaid either before or on the due date. Paying only the minimum amount due on the due date causes a drop in the credit score.</li><li><strong>Overspending and Reaching Credit Limit Regularly </strong>- Although you might be paying off your credit card bills regularly, reaching the credit limit quickly and regularly is not considered to be a good sign. It is interpreted as exorbitant spending. This behaviour is not appreciated and therefore causes a dip in the credit score.</li><li><strong>Too many ongoing loans</strong> - Having too many active loans is a warning signal for the lender. A very high debt-income ratio can push the borrower to default on payments. This impacts the credit score negatively.</li><li><strong>Unbalanced Credit Mix </strong>– There should be a right quantum of secured and unsecured loans in the kitty. As unsecured loans are without collateral, having too many of them in your loan portfolio lowers your credit rating.</li><li><strong>Not Adequate Credit History </strong>– If you haven’t availed of a loan before and do not have a credit card, you’ll not have a credit history. Thus, the lending company may not be able to gauge your creditworthiness. Therefore, it is recommended that you start your credit journey with a secured loan or a credit card.</li></ul><h2><strong>Things You Should Consider Before Availing Loans for Bad Credit</strong></h2><p><strong>Loans for bad credit</strong> can help you sail through the tough times. But before you apply for a bad credit loan, keep the following points in mind:</p><ul><li><strong>Explore Well </strong>– A bad credit loan will come at a higher rate of interest. The processing fee and other charges will add to the cost. It is therefore important that you do proper research, evaluate the benefits, and compare the offers of different lenders carefully.</li><li><strong>Check Eligibility</strong> – Loans for bad credit will be approved only if the eligibility conditions are fulfilled. Applying for a bad credit loan without fulfilling eligibility conditions can lead to rejection of the application, damaging the credit score further.</li><li><strong>Understand Terms and Conditions</strong> – It is important to understand the terms and conditions of the personal loans for bad credit before proceeding. These loans come at a higher rate of interest with several clauses. Go through each clause minutely to avoid hidden charges and financial implications later.</li><li><strong>Consider Your Repayment Capacity </strong>– <strong>Loans for bad credit</strong> levy a higher rate of interest. Going in for the same without evaluating your repayment capacity can push you into defaulting on payments. This can lead to a debt trap, further lowering your credit score. Consider taking a bad credit loan only if you can repay the EMIs comfortably.</li></ul><h2><strong>How to Avail Bad Credit Loans in India?</strong></h2><p>Getting loans for bad credit<strong> </strong>requires considerable effort and research and is not a straightforward deal. But thankfully, it’s not impossible to get one. If you wish to avail of a bad credit loan in India, here are a few steps that can help you get one:</p><ul><li><strong>Know Your Credit Score</strong> – A credit score above 750 is considered good. A score higher than 750 enables the borrower to avail of a personal loan at favourable terms and conditions. But before you apply for a personal loan, be aware of your credit score. The same can be checked for free online.</li><li><strong>Assess Your Financial Standing </strong>- Ensure that there will be no defaults in repayment of the loan. Consider a loan only if the current income can support additional monthly outflow in the form of loan EMIs.</li><li><strong>Compare Personal Loans for Bad Credit</strong> – A bad credit loan will cost more. So careful research and comparison of benefits offered along with terms and conditions applicable are important. Review different lenders and read through the fine print carefully before selecting the lender.</li><li><strong>Check Eligibility</strong> – An eligibility check or pre-qualification will help you know whether you’ll qualify for the loan without making a hard inquiry. Every hard inquiry leads to a further drop in the credit score.</li><li><strong>Opt for Secured Loans </strong>– A secured loan is easier to get even if you have a bad credit score. Opt for taking a loan against gold, PPF, or any other financial instrument. These will act as the financial backing and therefore let you avail of a personal loan with a low APR.</li><li><strong>Add Co-Applicants</strong> – A co-applicant with a good credit score can help you avail of a personal loan despite the primary applicant having a bad credit score.</li><li><strong>Provide Income Proof</strong> – If you have adequate proof to validate your total income, getting a personal loan with bad credit becomes easier. Therefore, ensure that your employment information, business details, ITR documents, etc., are in place before you apply for a bad credit loan</li></ul><h2><strong>Which Lenders Offer Bad Credit Loans?</strong></h2><p>You have a bad credit score and want to know which bank gives personal loans with bad credit in India, here’s help:</p><p>Loans for bad credit can be availed through any of the financial lenders mentioned below:</p><ul><li>Scheduled Banks</li><li>Non-Banking Financial Companies</li><li>Digital Lenders</li><li>Peer-to-Peer Lending (P2P)</li></ul><p><strong>Scheduled Banks</strong> - Scheduled banks have stringent eligibility conditions. But they approve loans with bad credit if all other eligibility conditions are met. Pledging collateral and providing adequate proof to validate your repayment capacity can help you negotiate for a low rate of interest despite a bad credit score. Scheduled banks sanction loans with stricter conditions and higher charges to applicants who have a credit score between 500 and 750. Prominent scheduled banks offering loans for bad credit are:</p><figure class="table"><table><tbody><tr><td><strong>Name of Bank</strong></td><td><strong>Rate of Interest</strong></td></tr><tr><td><a href="https://www.mymoneymantra.com/personal-loans/idfc-first-bank"><b>IDFC First Bank</a></b></td><td>10.49% p.a. onwards</td></tr><tr><td><a href="https://www.mymoneymantra.com/personal-loans/icici-bank"><b>ICICI Bank</b></a></td><td>10.50% p.a. onwards</td></tr><tr><td><a href="https://www.mymoneymantra.com/personal-loans/hdfc"><b>HDFC Bank</b></a></td><td>10.50% p.a. onwards</td></tr><tr><td><a href="https://www.mymoneymantra.com/personal-loans/axis-bank"><b>Axis Bank</b></a></td><td>12.00% p.a. onwards</td></tr><tr><td><a href="https://www.mymoneymantra.com/personal-loans/yes-bank"><b>Yes Bank</b></td><td>13.99% p.a. onwards</td></tr></tbody></table></figure><p><strong>Non-Banking Financial Companies </strong>– Compared to scheduled banks, Non-Banking Financial Companies are more flexible and lenient with their lending terms. Chances of getting a low value, shorter-duration loan are high despite having a low credit score. Some NBFCs also sanction loans to applicants who have a credit score as low as 360. Leading <a href="https://www.mymoneymantra.com/nbfc-personal-loan"><b>NBFCs</b></a> offering loans with bad credit are:</p><figure class="table"><table><tbody><tr><td><strong>Name of NBFC</strong></td><td><strong>Rate of Interest</strong></td></tr><tr><td><a href="https://www.mymoneymantra.com/personal-loans/tata-capital"><b>Tata Capital</b></a></td><td>10.99% p.a. onwards</td></tr><tr><td><a href="https://www.mymoneymantra.com/personal-loans/fullerton-india"><b>Fullerton India</b></a></td><td>11.99% p.a. onwards</td></tr><tr><td><a href="https://www.mymoneymantra.com/personal-loans/indiabulls-dhani"><b>India Bulls Dhani</b></a></td><td>13.99% p.a. onwards</td></tr><tr><td><a href="https://www.mymoneymantra.com/personal-loans/bajaj-finserv"><b>Bajaj Finance<b></a></td><td>13.00% p.a. onwards</td></tr><tr><td>Muthoot Finance</td><td>14.50% p.a. onwards</td></tr></tbody></table></figure><p><strong>Digital Lenders</strong> – Digital lenders, operate through mobile apps. They offer short-term loans with a low principal value. After a prior eligibility check, they approve loans to applicants with a low credit score. Leading digital lenders offering loans with bad credit are:</p><figure class="table"><table><tbody><tr><td><strong>Name of Digital Lender</strong></td><td><strong>Rate of Interest</strong></td></tr><tr><td><a href="https://www.mymoneymantra.com/personal-loans/moneytap"><b>Money Tap</b></a></td><td>1.08% per month onwards</td></tr><tr><td><a href="https://www.mymoneymantra.com/personal-loans/money-view"><b>Money View</a></b></td><td>1.33% per month onwards</td></tr><tr><td><a href="https://www.mymoneymantra.com/personal-loans/earlysalary"><b>Early Salary</b></a></td><td>2.50% per month onwards</td></tr><tr><td><a href="https://www.mymoneymantra.com/personal-loans/paysense"><b>PaySense</b></a></td><td>15.96% p.a. onwards</td></tr></tbody></table></figure><p><strong>Peer-to-Peer Lending (P2P)</strong> – This kind of lending enables borrowers to borrow loans from other individuals, thus eliminating middlemen. The lenders can be within the family or private players in the money lending business. The rate of interest charged is quite high.</p><h3><strong>Bad Credit Loans FAQs</strong></h3><h4><strong>✅ How can I ensure that my loan application is not rejected due to a bad credit score?</strong></h4><p>To increase your chances to avail of a bad credit loan:</p><ul><li>Pledge collateral</li><li>Add co-applicant</li><li>Apply for a shorter loan term</li><li>Apply for a low principal value</li><li>Prove your repayment capacity</li></ul><h4><strong>✅Which lenders offer personal loans for bad credit?</strong></h4><p>Personal loans for bad credit can be availed from:</p><ul><li>Scheduled Banks</li><li>Non-Banking Financial Companies</li><li>Digital Lenders</li><li>Peer-to-Peer Lending (P2P)</li></ul><h4><strong>✅ What is considered a bad credit score?</strong></h4><p>A credit score is recorded on a scale of 300-900.&nbsp;</p><ul><li>Between 800 and 900 – Excellent</li><li>Between 750 and 800 – Good</li><li>Between 625 and 750 - Average</li><li>Below 625 - Bad</li></ul><p>It is recommended to maintain a credit score of 750 and above to avail of loans on favourable terms.</p><h4><strong>✅How much loan can I avail myself of with a bad credit score?</strong></h4><p>The lower your credit score, the lower will be the principal loan amount sanctioned. Financial companies generally do not lend more than Rs. 5 lakh to people with a bad credit score. The loan eligibility will depend upon the applicant’s profile.</p><h4><strong>✅How can I apply for a bad credit loan?</strong></h4><p>To apply for a bad credit loan, the applicant needs to closely evaluate the terms and conditions offered by different lenders.&nbsp;</p><ul><li>Visit websites of different lenders.</li><li>Choose the relevant loan term and principal amount.</li><li>Check loan eligibility with your credit score.</li><li>In case the applicant is eligible for the loan, check the rate of interest and other charges that will be charged on loan.</li><li>Compare the APR of different lenders.</li><li>Apply for a bad credit loan with the relevant lender</li></ul><h4><strong>✅ Can I get a loan top-up on a bad credit loan?</strong></h4><p>After a bad credit loan is sanctioned and disbursed, an applicant can apply for a loan top-up if there have been no delays and defaults in EMI payment for a specified number of months.</p><h4><strong>✅ How long does it take to get a bad credit loan approved?</strong></h4><p>The loan application process and processing time for a bad credit loan are the same as in the case of a normal personal loan. The time taken to approve a loan varies from lender to lender.&nbsp;</p><p>Q8. What are the documents required to apply for a bad credit loan?</p><p>The documents required for a bad credit loan include:</p><ul><li>Income proof</li><li>Identity Proof</li><li>Address proof</li><li>Credit report</li><li>PAN Card</li><li>Documents for collateral security</li></ul><h4><strong>✅Who can apply for a bad credit loan?</strong></h4><p>In most cases, one can apply for a bad credit loan if:</p><ul><li>Age18 years and above as fixed by the lending institution</li><li>Indian citizen</li><li>Salaried or self-employed with required work experience</li></ul><h4><strong>✅What makes up a bad credit score?</strong></h4><p>The CIBIL score comprises of four factors, each having a specific weightage:</p><ul><li>Payment History carries 30% weight</li><li>Credit Exposure carries 25% weight</li><li>Credit Mix and Duration carries 25% weight</li><li>Other Factors make up the remaining 20%</li></ul>

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If you have hurt your credit score or CIBIL score then you might be wondering about how to get a personal loan with bad/low credit score? Look no more, we got it right here.

Best Personal Loans for Bad Credit in India 

<p>If you have hurt your credit score or CIBIL score then you might be wondering about how to get a personal loan with bad/low credit score? Look no more, we got it right here.</p>

<h2><strong>What is the Interest Rate on a Personal Loan in India? - All You Need to Know</strong></h2><p>A personal loan helps you meet urgent financial shortfalls. They do not carry an end-use clause and therefore can be put to any use. But they come at a higher rate of interest simply because they are unsecured loans and do not have collateral security backing. Thus, the rate of interest at which a personal loan is borrowed is the most crucial factor of the personal loan process.</p><h2><strong>What is the Interest Rate on a Personal Loan?</strong></h2><p>The rate of interest on a personal loan is the interest rate at which the lender approves the personal loan. It is linked to the lending rate set by the Reserve Bank of India. It is the factor that indicates the cost of the loan. The higher the rate of interest on a personal loan, the higher will be the cost of the loan resulting in a high monthly EMI. The average rate of interest on a personal loan in India is generally around 9.5% per annum.</p><h2><strong>Best Personal Loan Interest Rates in India</strong></h2><p>Personal loans are given by many banks and non-banking financial companies in India. Every lender promises unique benefits through its products, but what is the interest rate on a personal loan<strong> </strong>offered by far remains the most attractive feature that acts as the major pull factor for borrowers.</p><p>Listed below are some of the <a href="https://www.mymoneymantra.com/personal-loan-interest-rates">best personal loan interest rates</a> in India:</p><figure class="table"><table><tbody><tr><td><strong>Name of Lender</strong></td><td><strong>Rate of Interest</strong></td></tr><tr><td colspan="2"><strong>Top Banks</strong></td></tr><tr><td>SBI Bank</td><td>08.50% p.a. onwards</td></tr><tr><td>UCO Bank</td><td>10.05% p.a. onwards</td></tr><tr><td>IDFC First Bank</td><td>10.49% p.a. onwards</td></tr><tr><td>ICICI Bank</td><td>10.50% p.a. onwards</td></tr><tr><td>HDFC Bank</td><td>10.50% p.a. onwards</td></tr><tr><td>Kotak Mahindra Bank</td><td>10.75% p.a. onwards</td></tr><tr><td>Axis Bank</td><td>12.00% p.a. onwards</td></tr><tr><td>Yes Bank</td><td>13.99% p.a. onwards</td></tr><tr><td colspan="2"><strong>Top Non-Banking Financial Companies</strong></td></tr><tr><td>Tata Capital</td><td>10.99% p.a. onwards</td></tr><tr><td>Fullerton India</td><td>11.99% p.a. onwards</td></tr><tr><td>India Bulls</td><td>13.99% p.a. onwards</td></tr><tr><td>Bajaj Finance</td><td>13.00% p.a. onwards</td></tr><tr><td>Muthoot Finance</td><td>14.50% p.a. onwards</td></tr><tr><td colspan="2"><strong>App-Based Personal Credit Line</strong></td></tr><tr><td>Money Tap</td><td>Starting 1.08% per month</td></tr><tr><td>Money View</td><td>Starting 1.33% per month</td></tr><tr><td>Early Salary</td><td>Starting 2.50% per month</td></tr><tr><td>PaySense</td><td>15.96% p.a. onwards</td></tr><tr><td>Home Credit</td><td>19.00% p.a. onwards</td></tr></tbody></table></figure><p>&nbsp;<strong>How to Compare the Personal Loan Interest Rate?</strong></p><p>The rate of interest mentioned above is the least that the lending company offers. But the rate of interest at which your application will be approved will depend upon a range of factors like age, work profile, credit score, loan term, etc. therefore, before submitting a personal loan application to any lender, it is important to do an eligibility check or prequalification.&nbsp;</p><p>Once you get your eligibility terms in a soft inquiry, you can compare these for different lenders before you pick the best personal loan deal. The personal loan interest rate is compared on the following basis:</p><ul><li><strong>Annual Percentage Rate (APR)</strong> - The APR is the cost of the loan, including processing fees, expressed in percentage. The higher the APR of the lending company, the higher the cost of the loan.</li><li><strong>Loan term</strong> - As the loan tenure increases, the overall interest outflow increases, making the personal loan expensive. Therefore, the shorter the loan term, the lower the APR will be.</li><li><strong>Schemes and Discounts</strong> - The lending company may offer schemes and discounts to their loyal customers. So, you may be able to lower your loan interest rate by availing of a personal loan from a lender where you have other accounts.</li><li><strong>Monthly EMI -</strong> The monthly EMI amount should fit into your current budget comfortably. A high EMI amount can lead to financial distress. On the other hand, a very low EMI as compared to your repayment capacity will be a result of an unnecessarily long loan term, resulting in a high APR.&nbsp;</li><li><strong>Fees and Charges </strong>- In addition to the processing fees, a range of other charges are also applicable on a personal loan from time to time. Understand how much is to be paid for late fees, prepayment, or foreclosure.&nbsp;</li></ul><h2><strong>&nbsp;Factors Affecting Personal Loan Interest Rates</strong></h2><p>Although the lowest interest rate on a personal loan is linked to market lending rates and therefore changes periodically, the rate of interest that is offered to a loan applicant is dependent upon their repayment capacity and credit score. The factors that affect your loan interest rate are:</p><ul><li><strong>Credit Score - </strong>This is the foremost checkpoint for any lending company before advancing a loan. Your credit score indicates your creditworthiness. So, responsible financial behaviour in the past will show a high credit score. On a scale of 300-900, the higher the credit score, the greater are the chances of getting a personal loan approved at the lowest rate of interest offered by the lender.&nbsp;</li><li><strong>Monthly Income</strong> - A personal loan is without collateral. Therefore, a high monthly income of the applicant would mean a stronger capacity to repay the loan. This lowers the credit risk for the lender.&nbsp;</li><li><strong>Employment Status</strong> - Salaried employees are usually preferred over self-employed applicants because of their stable job profile and consistent income.</li><li><strong>Debt-Income Ratio</strong> - The portion of the income that goes into repayment of existing loans is taken into consideration while processing a personal loan application. It is calculated through the Debt-Income Ratio and therefore should not be more than 50%.</li><li><strong>Credit Utilization Ratio</strong> - This is typically calculated for credit cards. It is the ratio of credit used to the total credit limit available. A higher credit utilization ratio indicates over-reliance on credit. Lending companies prefer a credit utilization ratio of less than 40%.&nbsp;&nbsp;</li><li><strong>Simultaneous Loan Applications</strong> - Applying for a loan with multiple lenders over a short period grossly affects your credit score. Each loan approval, rejection, and inquiry reflects in the credit report and lowers the credit score.</li><li><strong>Relationship with the Lender</strong> - Existing relationship with the lender impacts the personal loan interest rate. In case you are a loyal customer and have a good banking history, your existing banker can advance a personal loan at the lowest rate of interest.</li></ul><h2><strong>How to Get Low-Interest Rates on a Personal Loan?</strong></h2><p>Searching for the best personal loan deal? Follow these simple steps that can help you enjoy a personal loan at a low rate of interest:</p><ul><li><strong>Maintain High Credit Score -</strong> Lending companies approve personal loans at the lowest rate of interest for applicants who have a high credit score. A credit score of more than 750 will enable you to get a low interest rate on a personal loan.</li><li><strong>Do Not Miss Repayments</strong> - Avoid missing timely repayments of credit card bills or existing EMIs. This adversely affects your credit score and lowers your chances of getting a personal loan at a low rate of interest.</li><li><strong>Compare Lenders</strong> - Before submitting a personal loan application to a particular lender, compare the personal loan interest rates charged by different lenders. A careful comparison will enable you to avail of a personal loan at a low rate of interest.</li><li><strong>Negotiate With Existing Lender</strong> - Existing customers having a good credit history and a healthy relationship with the lending company can negotiate for the lowest interest rate. This will be a win-win situation for both parties.</li><li><strong>Look Out For Schemes and Special Offers</strong> - Lending companies roll out limited period offers to offer a low rate of interest, especially during festive occasions. Also, special schemes for women applicants or salaried individuals can help avail of a personal loan at a low rate of interest.&nbsp;</li></ul><h2><strong>&nbsp;Fixed Vs Floating Personal Loan Interest Rates</strong></h2><p>A personal loan can be availed at a fixed or floating rate of interest. In the case of a personal loan with a fixed rate of interest, the same rate of interest is charged for the entire loan term.&nbsp;</p><p>Therefore, the EMI value calculated at the start of the loan term remains the same throughout.&nbsp;</p><p>However, in the case of personal loans approved on floating interest rates, the rates change with the change in the MCLR (Marginal Cost of Lending Rate), causing the fluctuation in the corresponding EMI value.</p><p>While the personal loan taken on a fixed rate of interest makes you aware of the exact value of EMI, thereby helping in monthly budgeting, it does not allow you to take advantage of the drop in MCLR rates which can help in lowering the interest cost.</p><h2><strong>How Personal Loans May Affect Your Credit Scores?</strong></h2><p>A personal loan may have a positive and a negative impact on your credit score. Submitting a personal loan application to multiple lenders at the same time is considered a hard inquiry and will harm the credit score. To avoid this, go in for pre-approvals with several lenders. This will enable you to understand your loan eligibility and other terms and conditions of the personal loan. Submit the personal loan application only once the lender is fixed.</p><p>Akin to credit cards, personal loans also help in improving credit scores. Ensure timely repayment of personal loan EMIs with no delays and defaults. This will help boost your credit score and thereby enable you to get future credit at favourable terms and conditions.</p><h2><strong>How to Calculate Personal Loan Interest Rates and EMI?</strong></h2><p>Are you looking for how to calculate EMI for a personal loan? Well, you can use the EMI calculator available online. It is available on the official websites of banks and non-banking financial companies. One can also visit third-party aggregator websites to learn how to calculate EMI for a personal loan.</p><p>The personal loan EMI is calculated using the mathematical formula -</p><p>EMI = [PxRx(1+R)^N]/[(1+R)^N-1]</p><p>Here, P is the loan amount, R is the monthly interest rate charged by the lender, and N is the repayment tenure in months.</p><h2><strong>FAQs</strong></h2><h4><strong>✅How to calculate EMI for a personal loan?</strong></h4><p>To calculate EMI for a personal loan,&nbsp;</p><ul><li>Use an online EMI calculator either through a lender website or a third-party aggregator website.&nbsp;</li><li>Enter the values of P (principal amount), R (monthly rate of interest), and N (loan term in months)</li><li>Submit the details</li></ul><p>The personal loan EMI value corresponding to the input values will appear on the screen.</p><h4><strong>✅Can I compare personal loan interest rates using APR?</strong></h4><p>APR (Annual Percentage Rate) is the overall cost of the loan. It is a comprehensive total of the rate of interest, and other fees and other charges apply. Therefore, the lower the personal loan APR of the lending company, the lower will be the cost of the loan.</p><h4><strong>✅ Should I avail myself of personal loans from banks or NBFC?</strong></h4><p>The rate of interest charged on a personal loan by banks is generally lower than the rate of interest levied by NBFCs (non-banking financial companies). This is because banks impose stringent eligibility checks. This lowers their credit risk. Therefore, if you fulfil all eligibility conditions and have all supporting documents in place, it is prudent to opt for a personal loan from a bank at a lower rate of interest.</p><h4><strong>✅What is the total interest payout on my loan?</strong></h4><p>The total interest paid on a personal loan can be checked through the EMI calculator. Provide the values of the principal amount, rate of interest, and loan term. The corresponding EMI value, along with the overall interest component of the personal loan, will appear on the screen.</p><h4><strong>✅ Is the lowest interest rate the only thing to be considered when taking a personal loan?</strong></h4><p>The rate of interest charged on a personal loan is of significant importance. It is the direct cost. A higher rate of interest will result in higher loan costs. But in addition to the lowest rate of interest, other charges like processing fee, prepayment fee, foreclosure fee, default penalty, and other associated fees and charges must also be taken into consideration before choosing a personal loan lender.</p>

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Compare latest personal loan interest rates for all banks. Check processing fees, know about fixed vs floating interest rates.

What is the Interest Rate on a Personal Loan in India? - All You Need to Know

<p>Compare latest personal loan interest rates for all banks. Check processing fees, know about fixed vs floating interest rates.</p>

<h2><strong>What are the Consequences or Punishment for Non-Payment of Personal Loan?</strong></h2><p><a href="https://www.mymoneymantra.com/personal-loans"><b>Personal loans</b></a> are unsecured loans that are provided without any restrictions on the end-use. In recent years the demand for personal loans has increased drastically owing to the ease with which the personal loans are issued. Just because it is easily available and with a quick turnaround time, you should not get tempted and apply for one without thinking twice. You should consider your affordability and borrow only if the loan is necessary.&nbsp;</p><p>If you do not plan your finances and borrow erratically, there is a good chance that you will end up in a financial mess that will lead to defaults in repayment. Read on to understand the repercussions and punishment for non-payment of personal loans.</p><h2><strong>What Happens if Personal Loan EMI is not Paid?</strong></h2><p> After meeting <a href="https://www.mymoneymantra.com/personal-loan-eligibility"><b>Personal Loan Eligibility Criteria</b></a> and submitting the loan documents, you commit to repay the loan within the tenure that you have opted for in equated monthly instalments (EMI). It means that you will have to pay a fixed amount on the set date every month. If you have not planned your finances meticulously or if you are unable to pay the personal EMI due to unavoidable circumstances, you will have to bear the brunt of the punishment for non-payment of personal loans.</p><ul><li>There will be reminders in the form of email, SMS, notification or a phone call from the lender if you miss out on even a single EMI. If the payment is still not made and the reasons for the non-payment are genuine, the lender may give you some extra time over and above the due date.&nbsp;</li><li>Despite the extension of the deadline, if the EMI is unpaid, then you are liable to penalties. In addition to that, it will have a negative impact on your credit score.<br>&nbsp;</li><li>The personal loan will be classified as a non-performing asset if the default continues and results in the non-payment of 3 EMIs in a row. The gravest punishment for non-payment of personal<strong> </strong>loans is the dip in the credit score. Every lender will keep the Transunion Cibil informed about the individual’s repayment behaviour. With every EMI you miss, your cibil score will lower by 50 to 70 points. A continuous delay in repaying your EMI will bring down your credit score drastically and may reduce your chances of getting further loans.&nbsp;</li></ul><h2><strong>Legal Action &amp; Punishment for Non Payment of Personal Loan</strong></h2><p>The personal loan will be classified as a non-performing asset if the borrower defaults beyond 90 days. If the loan is not repaid even after 180 days, the lender has the right to proceed legally against the borrower under Section 138 of the Negotiable Instruments Act 1881. Before proceeding legally, the lender will exercise all recovery measures like sending two reminders followed by a recall letter. The recall letter will be the final reminder wherein it will be specifically mentioned that the lender will proceed legally if the dues are not cleared within a specific date.</p><p>If the borrower appeals to the lender and gives valid reasons for the non-repayment, then the lender may provide options like restructuring of the loan. The restructure will make it convenient for the borrower to repay the dues.</p><p>On the other hand, if the borrower has diverted the funds and is wilfully avoiding the repayment of the loan or if the collateral is sold (in the case of secured personal loans) without the knowledge of the lender, then a criminal case will be lodged against the borrower as a punishment for non-payment of personal loan.</p><p>Though the lender has the right to take legal action against defaulting borrowers, there are certain rights that borrowers are eligible for.&nbsp;</p><ul><li><strong>Rights to Notice </strong>- Rights to know the facts of the case, i.e., the charges against the concerned party</li><li><strong>Rights to Fair&nbsp; Value </strong>- Rights to know the value at which the asset is being sold</li><li><strong>‘Rights to be Heard’</strong> - the right to express their opinion.</li><li><strong>Rights to be treated politely </strong>- Rights to be treated with dignity.</li><li><strong>Rights to Claim the Balance </strong>- Rights to the residual value after appropriating the outstanding liability with the sale proceeds of the asset</li></ul><p>It is recommended not to let the situation go to the extent of legal action. The penalty for delayed payment followed by legal fees could really pinch your pocket.</p><h2><strong>What happens if someone Defaults on Secured Loans?</strong></h2><p>Loans, where security like gold, property, LIC policies, NSCs etc. is offered, are called secured loans. The punishment for non-repayment of personal loans that are secured by way of mortgage of property or pledge of jewellery, LICP or&nbsp; NSCs is quite different.&nbsp; The initial recovery steps, like sending reminders, are similar to unsecured loans. When the borrower fails to respond to such reminders, the lender will send a notice to the borrower regarding the sale of the asset along with the date of auction.&nbsp;</p><p>In the case of a mortgage of a property, after the loan is classified as Non-Performing Asset, a notice under the SARFAESI Act will be sent with sufficient time to repay the dues within the legal framework. If unpaid within the time permitted, the next step would be sending a notice stating that the property will be auctioned on a certain date. The reserve value set for the auction will also be mentioned. The time gap between the date of the notice and the date of the auction will be one month. If the borrower clears the dues within this time, the auction will be called off.</p><p>In case the asset is sold, the borrower will have the right to claim the residual value out of the sale proceeds after the entire dues have been paid off.</p><h2><strong>Impact of Non Payment of Personal Loan on Credit Score</strong></h2><p>The lender will keep the credit bureau informed regarding the repayment behaviour of individual borrowers. Every EMI that is missed will be recorded in the credit history of the borrower. There will be a dip in the credit score by 50 to 70 points each time. If the default continues consecutively for three months, the personal loan will be classified as a Non-Performing Asset, and the same will be reported to the credit bureau. This will have a drastic effect on the credit score and to the extent that it may become difficult for you to procure further loans.&nbsp; It will negate your chances of availing of big-ticket loans like <a href="https://www.mymoneymantra.com/home-loans"><b>home loans</b></a>.</p><p>It is therefore recommended to plan your finances prudently and borrow only if you need to and if you can afford it.</p><h2><strong>Consequences of Missing Personal Loan EMI Payments</strong></h2><p>Missing Personal Loan EMI payments have the following consequences. This is in addition to the punishment for non-payment of personal loan.</p><ul><li><strong>Accumulation of liability: EMI concept was introduced to ease the burden of loan repayment. Missing personal loan EMI payments will defeat the purpose as it will lead to the accumulation of liability. Further, the penalty charged for such delays and missed payments will add up the cost of the loan, making it even tougher to clear the liability.</strong></li><li><strong>Dip in the credit score: The minimum credit score required for easy approval of any loan or a credit card is 750. Your aim should be to maintain a credit score beyond 750 to fulfil bigger dreams like owning a home. Missing out on personal loan EMI payments will negatively impact the credit score, which will make it difficult for you to avail of big-ticket loans like home loans, and your dream of owning a home will remain a dream.</strong></li><li><strong>Legal Action:</strong> You will be liable for legal action if you continue to miss personal loan EMI repayments beyond 180 days. The lender will give you sufficient relaxation in the form of extension of the EMI due date, providing a moratorium for the loan etc., and the ultimate recovery measure will be legal action.&nbsp;</li></ul><h2><strong>How to Avoid Default or Non Payment of Personal Loan?</strong></h2><p>Non-payment of personal loans could be due to unforeseen circumstances like a temporary layoff, medical emergencies, loss in the business, etc.&nbsp; It can also be due to unplanned financial commitments. There are several tactful ways of avoiding the default of personal loans.</p><ul><li><strong>Well-planned budget: </strong>This is the most prudent way of avoiding personal loan default. Every lender provides a simple financial tool, i.e., the EMI calculator, to calculate the probable EMI for a certain amount, tenure, and interest rate. Plan the EMI vis-a-vis your monthly income, and you will be able to make seamless repayment of the loan till the end of the tenure.</li><li><strong>Discussion with the lender</strong>: Discuss your financial condition with your lender to get some relaxation in the form of an extension of the due date, or a moratorium, as the case may be.</li><li><strong>Make part payments: Make part payments whenever there are surplus funds to lower the EMI.</strong></li><li><strong>Cut down on expenses: Plan your finances and cut down on unnecessary expenditures to save funds for the personal loan EMI.</strong></li></ul><h2><strong>Conclusion</strong></h2><p>Availing a personal loan is a financial commitment that has to be honoured seamlessly.&nbsp; Planning the monthly budget to provide for the additional burden in the form of a personal loan EMI for tenure as long as 60 months is highly essential to avoid missing or delaying the EMI and save yourself from the punishment for non-repayment of personal loan.</p>

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Is there a punishment for non payment of personal loan? Loan default is a civil case, police cannot make arrest. What happens if personal loan is not paid?

What are the Consequences or Punishment for Non-Payment of Personal Loan?

<p>Is there a punishment for non payment of personal loan? Loan default is a civil case, police cannot make arrest. What happens if personal loan is not paid?</p>

<h2><strong>Know How Much CIBIL Score Is Required For Personal Loan in India</strong></h2><p>Several factors come into play when you apply for a personal loan. Lenders have pre-set eligibility conditions and closely assess the applicant’s profile for aspects like age, current income, employment status, nature of the job, etc. In addition to these, one of the crucial parameters to gauge the applicant’s creditworthiness and repayment capacity is the credit score.&nbsp;</p><p>The relevance of credit score for personal loan applications is extremely high. This is because a personal loan is an unsecured loan and therefore does not have collateral backing. Therefore, the lender grossly relies on the CIBIL score for a personal loan to gauge creditworthiness, thereby reducing their credit risk.</p><p>But what is the minimum CIBIL score for a personal loan? Let’s understand the intricacies of credit score and know how much CIBIL score is required for a personal loan in India:</p><h2><strong>What is the Minimum Credit Score for a Personal Loan?</strong></h2><p>How much CIBIL score is required for a personal loan<strong> </strong>in India? Before we answer this question, let us understand what a credit score is and how it is measured. The credit score is an indicator of the creditworthiness of the individual. It is measured on a scale of 300-900. The values of the credit score are interpreted as follows:</p><ul><li>A credit score between 800 and 900 is rated as Excellent</li><li>A credit score between 750 and 800 is rated as Good</li><li>A credit score between 625 - 750 is rated as Average</li><li>A credit score below 625 is rated as Bad</li></ul><p>Thus, a minimum credit score of 750 is considered ideal for availing of a personal loan in India. This helps the borrower get the loan on the most favorable terms and conditions. However, it is pertinent to mention here that applicants who have a credit score less than 750 can also apply for a personal loan, but the lender will charge a much higher rate of interest on personal loans approved to people who have an average credit score.</p><h2><strong>Eligibility Criteria for Availing Personal Loan in India</strong></h2><figure class="table"><table><tbody><tr><td><strong>General Requirements</strong></td><td><strong>Conditions and Limits</strong></td></tr><tr><td>Age</td><td><p>Borrowers must age between 21 and 65 years.</p><p>The maximum loan term is dependent upon the age of the borrower. Years remaining until retirement can be the maximum loan period for which the personal loan can be availed.</p></td></tr><tr><td>Credit Score</td><td><p>Recommended Credit Score - 750</p><p>Minimum Credit Score accepted - 625</p></td></tr><tr><td>Fixed Obligation To Income Ratio</td><td>Existing Fixed Obligation To Income Ratio must be less than 50%</td></tr><tr><td>Work Profile</td><td><ul><li>Salaried</li><li>Self-employed professional</li><li>Self-employed non-professionals</li></ul></td></tr><tr><td>Work Experience</td><td>Applicant’s work experience is mandatory. It can range between 2-5 years, with at least the previous 1-year must be with the existing employer or in the existing profession.</td></tr><tr><td>Income</td><td><p>Salaried Individuals - Minimum monthly income of Rs. 15,000</p><p>Self-employed individuals - Minimum monthly income of Rs 20,000&nbsp;</p></td></tr></tbody></table></figure><h2><strong>&nbsp;Why is CIBIL Score Important to Avail Personal Loan in India?</strong></h2><p>Evaluating the CIBIL score is an integral part of lending. It is extremely important for personal loans as these loans are issued without collateral. CIBIL scores are helpful to borrowers too. The reasons why CIBIL score is important to avail a personal loan in India are:</p><ul><li><strong>Gauge Creditworthiness</strong> - The CIBIL score helps the lender assess the creditworthiness and repayment capacity of the applicant. A high CIBIL score is a reflection of the applicant’s good financial behaviour. This reduces the credit risk of the lender.&nbsp;</li><li><strong>Expedited Loan Application Process</strong> – A high credit score helps build confidence and win the trust of the lender. The personal loan applications that meet the eligibility criteria completely are processed quickly. The loan approval and disbursal happens in a matter of a few hours!</li><li><strong>Competitive Rate of Interest </strong>– The lowest rate of interest advertised by the lending company is typically offered to borrowers who have a high credit score. With a higher credit score, the applicant stands a chance to seek a personal loan at the most favourable terms and conditions.</li><li><strong>Increases Loan Eligibility</strong> – One of the aspects on which the personal loan eligibility is judged is the credit score. Borrowers who have a high credit score are eligible for a higher loan amount at a longer loan term.</li></ul><h2><strong>How to Avail Personal Loan with Low Credit Score?</strong></h2><p>A high credit score for a personal loan ensures that you get the best-possible loan deal instantly. On the other hand, a personal loan with a low credit score will require a considerable amount of research and effort. But thankfully, it’s not impossible to get a personal loan with a low credit score. Here’s a quick help to enable you to avail of a personal loan with a low credit score:</p><ul><li><strong>Check Your Credit Score</strong> – Check your credit score when you plan to apply for a personal loan. Do not apply for a personal loan instantly if you have a low credit score. Try to build on your credit score for at least three months before applying.&nbsp;</li><li><strong>Compare Personal Loans Interest Rates For Low Credit Score</strong> – In case you require a personal loan immediately, compare the interest rates offered by different lenders. A personal loan with a low credit score will cost more. Therefore, it is important to carefully research and compares the benefits offered along with the terms and conditions applicable. Reviewing offers of different lenders and reading through the fine print is important.</li><li><strong>Know Your Repayment Capacity </strong>– Take a loan only if you can repay it comfortably. This is important because any default in repayment of the loan will lead to a further drop in the credit score.</li><li><strong>Check Eligibility</strong> – A pre-qualification or eligibility check will help you know the quantum of loan you’ll be eligible for on your current credit score. By doing this, you can save on a hard inquiry, which can lead to a drop in the credit score if the loan is rejected.</li><li><strong>Provide Collateral </strong>– A secured loan is approved even if you have a low credit score. Contemplate pledging collateral to avail a personal loan with a low APR.&nbsp;</li><li><strong>Add Co-Applicants</strong> – By adding a co-applicant with a good credit score to the personal loan application, the loan eligibility increases.&nbsp;</li><li><strong>Include Income From All Sources</strong> – Club your income from all sources. A higher income increases the chances of getting a personal loan with a low credit easier.&nbsp;</li></ul><h2><strong>Tips to Improve CIBIL Score in India 2021</strong></h2><p>A high credit score for a personal loan is crucial. How it can be improved include:</p><ul><li><strong>Pay Bills On Time</strong> – The best and the easiest way to boost credit score is by paying off credit card bills and EMIs timely. Timely repayments reflect responsible financial behaviour.&nbsp;</li><li><strong>Do Not Revolve Credit </strong>– The total outstanding on the credit card must be paid on the due date. Paying the Minimum Amount Due and revolving credit causes a dip in the credit score.&nbsp;</li><li><strong>Do Not Overspend - </strong>Getting near to or reaching the credit card limit frequently is a warning signal. It is considered exorbitant spending with heavy reliance on credit.</li><li><strong>Keep Credit Utilization Ratio Low -</strong>. In case you are a heavy credit card user, apply for a higher limit credit card to reduce your credit utilisation ratio. The credit utilisation should not be more than 30% of the credit limit.&nbsp;</li><li><strong>Do Not Apply For Many Loans Simultaneousl</strong>y – Too many active loans at a time or applying for a loan to several lenders simultaneously does not go well with the lending companies. Furthermore, every rejection of a loan application affects credit score negatively.</li><li><strong>Maintain a Balanced Credit Mix –</strong> Try to maintain a balance between secured and unsecured loans. Also, have loans for different tenures.</li><li><strong>Apply For A New Credit Card </strong>– Having no credit history or inadequate credit history both are a reason for low credit score. Hence, applying for a credit card and repaying an outstanding amount in time helps you build and maintain a good credit score. Having two credit cards from different credit card providers will further boost the credit score.</li><li><strong>Monitor Co-Signed Accounts</strong> – Applicant is equally liable for defaults occurring in jointly held accounts or accounts wherein the individual is a guarantor or a co-applicant. Therefore, it is important to monitor these accounts to improve credit scores.</li></ul><h2><strong>Things to Keep in Mind While Applying for a Personal Loan</strong></h2><p>Once you are aware of how much CIBIL score is required for a personal loan, there are certain things you need to keep in mind while applying for a personal loan. These include:</p><ul><li><strong>Check Personal Loan Eligibility</strong> – A personal loan will be approved only if the eligibility conditions are fulfilled. Applying for a personal loan without fulfilling eligibility conditions can lead to loan rejection which can damage the credit score.</li><li><strong>Check CIBIL Score</strong> – Know your CIBIL score. Also, check the minimum credit score for a<strong> </strong>personal loan required by the specific lending institution. This will enable you to get the personal loan at the most favourable terms and conditions.</li><li><strong>Research Well </strong>– To get a personal loan at the lowest rate of interest, it is important to explore products carefully. Evaluate the benefits and compare the features of personal loans offered by different lenders carefully.</li><li><strong>Reduce Your Credit Utilization Ratio</strong> – If you have a high credit utilisation ratio on your credit card, consider paying off the outstanding dues immediately.&nbsp;</li><li><strong>Work on Rejection Reasons</strong> – In case your previous loan application was rejected, do not apply for a fresh loan until you clear your cause of rejection. Furthermore, wait for at least three months before reapplying for a personal loan.</li></ul><h3><strong>&nbsp;FAQs</strong></h3><p><strong>✅How much is CIBIL score required for a personal loan?</strong></p><p>Lenders usually consider a CIBIL score of 750 and above for personal loans. In case the CIBIL score is less than 750, you can still avail of a personal loan at a higher rate of interest, provided all other eligibility conditions are met.</p><p><strong>✅ How can I improve my CIBIL score for a personal loan?</strong></p><p>Consider these points to increase your CIBIL score for a personal loan</p><ul><li>Pay bills on time&nbsp;</li><li>Do not revolve credit.&nbsp;</li><li>Do not overspend</li><li>Keep credit utilisation ratio low</li><li>Do not apply for too many loans simultaneously&nbsp;</li><li>Maintain a balanced credit mix&nbsp;</li><li>Apply for a new credit card&nbsp;</li><li>Monitor joint accounts</li></ul><p><strong>✅Why is CIBIL Score Important to Avail Personal Loan in India?</strong></p><p>CIBIL score is important to avail personal loan because:</p><ul><li>It helps gauge creditworthiness&nbsp;</li><li>A high credit score expedites the loan application process&nbsp;</li><li>Allows taking a loan at a competitive rate of interest&nbsp;</li><li>It increases loan eligibility&nbsp;</li></ul><p><strong>✅ How is the CIBIL score calculated?</strong></p><p>CIBIL score is measured on a scale of 300-900. It takes into account four factors: Payment history (40%), Credit exposure (25%), Credit type and duration (25%), and other factors (20%).</p><p><strong>✅ How are the values of credit score interpreted?</strong></p><ul><li>A credit score between 800 and 900 is termed Excellent</li><li>A credit score between 750 and 800 is rated as Good</li><li>A credit score between 625 - 750 is considered Average</li><li>A credit score below 625 is considered Bad</li></ul>

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CIBIL Score for a personal loan is a 3-digit number ranging from 300 to 900. Know what is the minimum CIBIL score required for a personal loan.

Know How Much CIBIL Score Is Required For Personal Loan in India

<p>CIBIL Score for a personal loan is a 3-digit number ranging from 300 to 900. Know what is the minimum CIBIL score required for a personal loan.</p>

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