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What is a Personal Loan?

A Personal Loan is an unsecured loan provided by banks and financial institutions to meet personal exigencies.

When Should I Consider Taking a Personal Loan?

Financial woe scan arise at any time. You may need funds to pay for educational expenses for your children or a wedding in the house. There could also be unexpected medical bills to deal with.

Availing a Personal Loan as an additional back-up is something you could consider if you find yourself in a tough spot. Some people take Personal Loans to consolidate their credit card debt. You too can do this and pay off your existing credit card outstanding amount. MyMoneyMantra has products which offer Personal Loans for home renovation as well as consumer durables like a television or a refrigerator - the possibilities are endless. 

A decade or so ago, taking a Personal Loans was not common. Now, with rising incomes and increased competition among banks to improve their credit portfolios, Personal Loans have become more accessible to get. There are various advantages of taking Personal Loans. Banks these days offer attractive interest rates as well as the flexibility of repayment.

MyMoneyMantra can help you decide on a Personal Loan with options from over 70+ banks and NBFCs (Non-Banking Financial Companies).

Advantages of a Personal Loan

  1. No Collateral - This is the most significant advantage of taking a Personal Loan. It is the most convenient option from the customer's point of view. You do not need to mortgage an asset for taking a Personal Loan.
  2. No end use requirement -You can avail a Personal Loan for any purpose. There is no compulsion on borrower's part to disclose the use of funds. However, banks do take a declaration that you will not use the loan for speculative purposes.
  3. Quick processing - These loans are available with out any security. If you satisfy the eligibility criteria, you get a Personal Loan approval in a short period. Certain banks give online approvals too.
  4. Fixed Rate of Interest - Banks decide the rate of interest on personal financing at the time of processing the loan application. It remains fixed throughout its tenure. Hence, you need not worry about variable EMIs (Equated Monthly Instalments) or interest rate fluctuations.
  5. Repayment flexibility -The average repayment period of a Personal Loan ranges from 36 months to 84 months. The more extended the loan repayment period, the lower the EMI. Individual financial institutions allow you to repay the interest amount alone every month with the arrangement of paying a pre-determined amount towards the principal repayment at the end of the year.
  6. Tax benefits - If you avail a Personal Loan for renovating your home, you are eligible for Income Tax deductions up to 2 Lakhs under Section 24B of the Income Tax Act, 1961. However, you will have to prove that you used the loan for home renovation only.

Why Apply for a Personal Loan with MyMoneyMantra?

Each bank has its individual Personal Loan scheme with varying rates of interest and repayment periods. They also have different methods of reviewing loan eligibility. It can all be very confusing, and MyMoneyMantra can help you through the entire process. Applying for a Personal Loan with MyMoneyMantra is an advantage because we do the hard work for you. We will collate the information on a single screen where you can compare the different products.

We provide the requisite information and guidance in the following manner.

  1. Help you in determining eligibility depending on your income and repayment capacity
  2. Compare different products on offer and help choose the most appropriate product for you
  3. Highlight the processing fee of different banks thereby helping you to select the Personal Loan that offers the most significant benefit
  4. Ease of documentation witha quick turnaround time
  5. Since we host several products from various Banks and NBFCs, you are not restricted and have several options.

MyMoneyMantra has Experts who can:

  1. Assess your profile and determine your eligibility
  2. Analyse your repayment history and advise you accordingly
  3. Decipher the fine print, especially in the case of seemingly attractive offers

How Can I apply for a Personal Loan through MyMoneyMantra?

Applying for a Personal Loan through MyMoneyMantra is very easy. All you have to do is provide the following information:

  1. Indicate whether you are a salaried person or self-employed
  2. Your name and email address
  3. Choose your residential city from the options given
  4. Enter the details of your current employer
  5. Provide information about your income
  6. Indicate the loan amount required
  7. Enter the mobile number whereby you allow MyMoneyMantra to contact you and advise you about its products and services

MyMoneyMantra will give you the best offers based on the information you have submitted.

  1. It will enable you to choose the best option. Once you have made a choice, you can proceed with filling up the application form and provide the necessary documents for appraisal. Our team will help you withthe process and lodgeyour application with the lender. Our services are at no cost to you.
  2. Verifying the information provided by you is the lenders' responsibility. They may also require extra documentation in some cases.
  3. Once the loan is approved, you will have to accept the terms and conditions and proceed to sign the loan agreement.
  4. MyMoneyMantra's Personal Loan experts will help you in the disbursement of the loan. We are always available to clarify any issues that you have.

Features of a Personal Loan:

  1. The rate of Interest - The rate of interest on Personal Loans is between 11-14% depending on your credit score, income and so forth.
  2. Loan amount - You can get a Personal Loan for as low as 50,000 and as high as 50 Lakhs depending on your requirement and eligibility.
  3. Loan Tenure - Festival loans are available for periods as short as 12 months. The average tenure for a Personal Loan is between 12 and 60 months,depending on the loan amount.
  4. Security - Due to its unsecured nature, collateral is not required
  5. Loan Turnaround Times - A Personal Loan typically has the fastest turnaround time in the industry. Many banks approve Personal Loans with in 48 hours after submission of the online application.
  6. Processing Fees - It depends on the individual bank. Itusually ranges between 1- 2% of the loan amount.
  7. Pre-payment Penalty - Banks charge pre-payment penalty if you repay your Personal Loan before the determined period. The charges range between 1-2% of the outstanding amount on the date of closure.

Factors Affecting the Eligibility of a Personal Loan:

  1. Credit Score - This is the most crucial eligibility factor. A credit score of 650 or above is typically considered good score. The better your credit score, the higher are your chances of getting a Personal Loan.
  2. Employment - Employees of listed companies, Central and State Governments, and public sector undertakings are eligible for a higher amount.
  3. Work Continuity - You should be a long-term employee of your current organisation. In case you are self-employed, the continuity of business and income is the most critical
  4. Age of the borrower - The minimum age requirement is 21 years. Banks have their criteria for deciding the maximum age limit. In most cases, your age at the end of the repayment period should not exceed 70 years.
  5. Who is eligible to apply - Salaried persons, self-employed professionals, and self-employed persons are eligible to apply for a Personal Loan.
  6. Eligibility amount - It depends on the bank sanctioning the Personal Loan. Various factors like gross income, take-home pay, other loan instalments, and Credit Card liabilities determine your eligibility. You can use MyMoneyMantra's easy Personal Loan EMI Calculator and determine eligibility.

Documents Required for Availing a Personal Loan:

1. KYC - Documents for determining identity, age, and residence proof are needed when applying for a Personal Loan. These documents are:

  1. PAN Card
  2. Aadhar Card
  3. Driving Licence
  4. Voter ID
  5. Passport
  6. Registered Rent Agreement

2. Income Documents - In case you are a salaried employee, you need to furnish the following documents:

  1. Salary slips for the last 6 months
  2. IT Return along with Form 16 for the past two years
  3. Bank Account Statement of previous 3 months that reflects your salary credits and other income
  4. Employment certificate from current employer

In case you are self-employed (professional or business owner), the following documents will suffice:

  1. Financial statements that include Balance Sheet and Profit and Loss Statement
  2. IT Returns for the last 2 years
  3. Proof of continuity of business income such as Bank Account Statement
  4. Evidence of doing business like GST Registration

3. Other Documents- This includes your loan application form

Also Read : Document Required for Personal Loan - Complete Checklist

Banks that Provide Personal Loans Include:

NBFCs that Provide Personal Loans Include:

Personal Loan Eligibility Tips:

It is likely that you receive hundreds of calls, texts and e-mails regarding Personal Loans.

MyMoneyMantra can help choose the best loan offer for you as we have a structured process that will guide you through every step.

MyMoneyMantra can help you avoid common mistakes when applying for a Personal Loan:

  1. Interest Rates - People look at the rate of interest offered by lending banks and tend to ignore other charges like processing fees, pre-payment clauses, and late payment fees. MyMoneyMantra guides you through each aspect while helping you choose the most appropriate Personal Loan Offer.
  2. Applying for a higher amount than necessary- Some people tend to apply for higher amounts than they require as the eligibility criteria are quite generous. MyMoneyMantra helps you arrive at the optimum figure. We account for the current as well as contingent liabilities while helping you decide on the loan amount.

Do I Need a Co-Applicant for a Personal Loan?

It is not compulsory for you to have a co-applicant for a Personal Loan. If you are looking for a higher amount, a co-applicant such as your spouse can be useful. You will need to provide the income details of the spouse as well.

The Banks Offering Attractive Personal Loans

Banks and financial institutions are liberal in sanctioning Personal Loans, especially to borrowers having good credit scores (in the range of 650 and above).

Name of Personal Loan provider ICICI Bank Personal Loan

Interest Rates

  • Interest rate starting from 10.50% to 18%


  • Ranging from 12 to 60 months

Loan Amount

  • Maximum Loan Amount - 20 Lakhs


  • 2.25% of the sanctioned loan amount with a minimum of 999
  • Prepayment Fee at 5% p.a. of principal outstanding + GST
  • Loan cancellation charges - 3,000 + GST

Eligibility for Salaried Employees

  • Age between 23 and 58 years
  •  Minimum monthly income - 17,500
  • For Mumbai and Delhi borrowers - 25,000
  • For Chennai, Hyderabad, Bengaluru, Pune, and Kolkata - 20,000
  • Two years stable employment
  • One year continuous stay at your residence

Eligibility for Self Employed

  • Age for self-employed individuals - 28-65 years
  • Age for Doctors - 25-65 years
  • Minimum Turnover for Non - professionals - 40 Lakhs
  • Minimum Turnover for Professionals - 15 Lakhs
  • Minimum Profit after tax for Proprietorship/ partnership & self employed individuals - 2 Lakhs
  • Minimum Profit after tax for non- professionals - 1 Lakh
  • Business stability of 5 years in current business for Self employed individuals
  • For Doctors - 3 years of business stability



  • No security or guarantor
  • Balance transfer of another bank's loan
  • Quick approval within 72 hours
  • Loan insurance

Types of Personal Loans

  • You can avail a Personal Loan for a wedding, home renovations, and go on vacation


Name of Personal Loan provider HDFC Bank Personal Loan

Interest Rates

  • 11.25 % to 17.50% for salaries customers


  • 12 months to a maximum of 60 months

Loan Amount

  • Maximum loan of 40 Lakhs


  • Processing fees of 2.50% with a minimum of 1,999 and maximum of 25,000 for salaried customers
  • Prepayment not allowed until repayment of 12 EMIs
  • 13 to 24 months - 4% of principal outstanding
  • 25 to 36 months - 3% of principal outstanding
  • Over 36 months - 2% of Principal outstanding
  • Late payment charges - 2% per month on EMI
  • Cheque Bounce charges - 550 per instance


  • Salaried doctors, CAs, employees of private limited companies, employees from public sector undertakings, including central, state and local bodies       
  • Individuals between 21 and 60 years of age
  • Stable employment for a minimum of 1 year with the current employer& maximum experience for 2 years
  • Net Income of 15,000 for cities other than those listed below
  • 20,000 for customers from Mumbai, Delhi, Bengaluru, Chennai, Hyderabad, Pune, Kolkata, and Cochin


  • Get Personal Accident Insurance Cover up to 8 Lakhs by paying a nominal premium
  • Critical Illness cover up to 1 Lakh
  • Personal Loan Insurance
  • Balance Transfer facility from other banks


Name of Personal Loan provider IDFC First Personal Loan

Interest Rates

  • 12% to 18% per annum for salaried employees
  • Can go up to 22% for self-employed professionals


  • Flexible tenure between 12 and 60 months

Loan Amount

  • 1 Lakh to 25 Lakhs


  • 1.5% to 2% - One-time fee


  • Age between 23 and 58 years (at time of maturity)
  • Self-employed persons - Minimum 28 and maximum 68 years at maturity
  • Salaried and self-employed persons are eligible
  • Stable job with minimum 1-year service
  • Self-employed - Minimum 3 years business
  • Credit score 650 and above


  • Personal Loan disbursement in 24 hours and a maximum of 2 days after submission of documents
  • No guarantor or security
  • Flexible repayment options like RTGS, NEFT, PDC, ECS, and so on
  • Online application and approval
Name of Personal Loan provider Bajaj Finserv Personal Loan

Interest Rates

  • 11.99% to 15.50%


  • 24 months to 60 months

Loan Amount

  • Up to 25 Lakhs


  • Processing fees - 2.25% to 3%
  • Cheque bounce charges - 1,000 per occasion
  • Penal interest - 2.38 % default interest including taxes per month
  • Fee for online applications - 1,999
  • Foreclosure charges - 4% plus applicable taxes on principal outstanding*Prepayment - 2% plus applicable taxes on part-payment amount paid*


  • Minimum 25 years at the application and 58 years at maturity
  • A salaried employee from multi-national companies, private organisations, and public companies are also eligible
  • 2 months' salary slip and 3 months bank statement along with KYC documents
  • You must be a residing citizen of India.


  • Flexible Finserve Loan facility available where you pay the interest alone in EMIs and the principal amount either as a lump sum amount or at the end of the loan tenure.
  • Facility to withdraw from your credit line multiple times
  • Quick loan approvals with funds credited to account within 24 hours
  • Part prepayment facility up to 6 times a year at no extra cost
  • Use for a variety of purposes like wedding, travel, home improvement, medical emergencies, or higher education
Name of Personal Loan provider Yes Bank Personal Loan

Interest Rates

  • Interest rate ranging from 10.75% to 18%*



  • 5 years


Loan Amount

  • 2 Lakhs to 20 Lakhs


  • 4% principal outstanding if you foreclose the loan between 13 and 24 months
  • 3% if the foreclosure between 25 and 36 months
  • 2% between 37 and 48 months
  • Zero Cost after 48 months


  • Minimum Salary 25,000
  • 6 months continuity in a job
  • Total employment - Minimum 2 years
  • Last 2 years IT returns
  • Minimum age 22 years and maximum 58 years at maturity


  • No collateral or guarantor required
  • Purpose of loan can be anything like wedding expenses, home renovation, medical expenses, overseas travel, new business, resolve financial crunch and so on
  • Flexible repayment options
  • Competitive interest rates
  • Minimum documentation
  • Part prepayment allowed after completion of 6 months and full prepayment after 12 EMIs
Name of Personal Loan provider Kotak Mahindra Bank Personal Loan

Interest Rates

  • 10.99% to 24%


  • 12 months to 60 months

Loan Amount

  • 50,000 to 50 Lakhs


  • Up to 2.5% of the loan amount+ service tax / GST and other applicable statutory levies up to 5% of the Loan amount, not exceeding 7500 (inclusive of GST / Service tax)


  • Salaried employees, self-employed professionals, and business owners
  • Minimum 21 years and maximum 58 years at maturity
  • Net salary 20,000
  • Minimum qualification - Graduate
  • Available in select Indian cities
  • Credit score of 750 and above


  • Minimum documentation
  • Flexible repayment options
  • Minimum lock-in period of 12 months
Name of Personal Loan provider Citibank Personal Loan

Interest Rates

  • 10.99% to 18


  • Minimum 12 months
  • Maximum 60 months

Loan Amount

  • 1 Lakh to 30 Lakhs


  • 2.00% - 3.00%
  • Pre-closure charges - 4% of the outstanding loan amount


  • Minimum age 23 years and maximum 60 years at maturity
  • Salaried, self-employed professionals and business people can apply
  • A regular source of income
  • Credit score 700 and above


  • Simplified Loan process with minimum documentation
  • Add-on facility availability
  • Quick turnaround process
  • Fixed rate of interest
  • Use for marriage expenses, home improvement, and other personal expenses
Name of Personal Loan provider Tata Capital Personal Loan

Interest Rates

  • 11.25%-17%


  • 12 months to 72 months

Loan Amount

  • 75,000-25,00,000


  • Processing fees - 0.5% to 2.5% of the loan amount
  • Part Pre-payment charges - 4.5% if payment exceeds 25% of the principal amount
  • Foreclosure charges - 2% of the outstanding amount


  • Salaried employees, self-employed professionals and business people are eligible
  • Minimum 21 years and maximum 58 years at maturity for salaried, 22-65 years for self employed individual, 22-65 years for businessman
  • Monthly income 20,000 for salaried employees and a yearlyincome of 2 Lakhs for self-employed persons
  • 2 years continuous job or 3 years continuity in business


  • Use for a variety of purposes like wedding expenses, educational expenses, travel, and any other general purpose except speculation
  • Fast turnaround time of a maximum of 72 hours after submission of all documents
  • Easy repayment options
  • No security or guarantor
  • Top up facility available

Types of Personal Loans

  • Step-Up Flexi EMI Personal Loan - Choice of paying higher EMI
  • Step-down Flexi EMI Personal Loan -Facility to decrease the EMI
  • Bullet Flexi EMI Personal Loan - Pre-pay the loan in periodic instalments

Frequently Asked Questions about Personal Loans

How do they calculate the eligibility of the Personal Loan?

Every bank has its eligibility criteria. The loan eligibility depends on various factors

  • The nature of your employment plays an essential role in your eligibility. Central and State Government employees do not have any problems in getting Personal Loans. At the same time, an employee of a small company can face some issues. Banks categorise employers into different categories such as A, B, C, and so on. The higher the grade, the higher is the loan eligibility.
  • The take-home pay is a crucial feature of your Personal Banks prescribe a minimum of 50% of take-home pay after considering the prospective Personal Loan EMI.
  • Your credit score is the clinching factor. Any rating over 750 is an excellent one. Banks usually do not approve Personal Loans for people with credit scores below 650.

I have a decent salary package. However, the bank rejected my Personal Loan application. What can I do now?

Approving any loan is the prerogative of the bank. There are various reasons for rejection of the Personal Loans.

  • You might be having many loans outstanding. The possible solution is to bring in a co-borrower. Your working spouse can join as a co-borrower. You can also try to reduce your existing liabilities by closing some of your loans.
  • You might have an adverse credit score. Check your credit report and go through it in detail. There can be errors in your report. Dispute them if necessary and take the steps needed to rectify your credit report. Remember, you need a minimum credit score of 650 to 700 to be eligible for a Personal Loan.

What is the difference between foreclosure and part-prepayment?

  • Foreclosure is the situation where the borrower wishes to close the entire principal outstanding before the completion of the tenure of the loan. Part-prepayment is when the customer does not close the entire loan but attempts to repay a portion of the outstanding amount.
  • Many banks charge pre-payment penalty ranging from 2% to 5% of the loan outstanding when you try to pre-pay your loan liability. Some banks have a lock-in period when you cannot foreclose the loan.

What are the minimum and maximum loan amounts offered by banks?

  • Generally, the minimum loan amount is around 50,000,and the maximum amount can go up to 50 Lakhs depending on your eligibility.
  • The banks like to have a personal discussion with borrowers before approving higher Personal Loan limits.

How does the credit score affect the Personal Loan approvals?

  • Banks stipulate a minimum credit score for processing a Personal Loan application.
  • They do not have any hesitation in approving Personal Loans to borrowers having a credit score more than 650.
  • It is better to order your credit report from the credit bureaus and know your score. It can save you the trouble of having to deal with a loan rejection.
  • Banks make inquiries with the credit bureaus before sanctioning the Personal Loans. Every query affects your credit score.

What are the options available to banks in case of default?

  • The banks do not have any collateral to fall back on in case of default. The only recourse available to the banks is to file a civil suit in the court of law.

Points to Ponder Before Taking a Personal Loan

Personal Loans are easy to get. They are the best options to fight off financial crunches. You need not provide any collateral or guarantee. A decent disposable income and a good credit record are enough for banks to approve your Personal Loans. However, you should consider these essential points before deciding to avail a Personal Loan.

  • Shop around for the best offer - A Personal Loan is one of the most conventional loan products available. However, the interest rate and other charges vary a lot from one bank to another. It is advisable to shop around and check out the offers before applying for a personal loan. MyMoneyMantra is one place where you can get access to a variety of personal loan products from different banks. You can compare these products on a single screen and decide on the best option.
  • Check out the EMIs - Personal Loans have bigger EMIs than other loans because of their short tenure and comparatively higher rates of interest. Therefore, it is better to use our EMI calculator and check out your EMI. Usually, banks insist on take-home pay of around 50% after catering to all your liabilities including the EMI of the proposed Personal Loan. The thumb rule is that your EMI should not exceed 10% of your income. It will keep your EMI affordable and allow you to repay your loans quickly, thus improving your credit score.
  • A shorter tenure is preferable - Personal Loans are available for tenures lasting up to 60 months. It is better if you keep your tenure shorter than that. The ideal tenure is 36 months. Nevertheless, you should also check out the EMI affordability. You should be able to afford the EMI. Maintain the right balance between the loan amount, your EMI, and the tenure of your Personal
  • Read the fine print carefully - Make it a point to read your loan document carefully. There are many hidden charges such as late fee penalty, cheque bounce charges, pre-payment penalties, lock-in period, and so on. Consult your financial advisor before you sign on the dotted line. Some banks charge interest on reducing balance method whereas some banks follow the straight-line Understand the difference between the two. Use our EMI calculator to estimate the total outflow.
  • Opt for Loan Insurance - Loan insurance has become a favourite product today. It will be the biggest favour you do to your legal heirs. You do not leave behind any loan liability in case of any untoward incidents. Many banks include the loan insurance premium in the loan amount. As you repay the loan in instalments, you do not feel the pinch.

Consider these points before you apply for your Personal Loan. Remember, there are hundreds of options open to you, but not all of them are beneficial.

Avail the guidance of the experts at MyMoneyMantra to help you make a decision.

To apply online for Credit Cards, Secured Loans and Unsecured Loans, visit, the leading online lending marketplace that offers financial products from 70+ Banks and NBFCs. We have served 2 million+ happy customers since 1989. 

Talk to our Loan Specialists toll-free at 1800 103 4004 to know more about our products and offers. 


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