WHAT IS A PERSONAL LOAN?

A personal loan is an unsecured loan that can be used for a variety of purposes, including debt consolidation, home improvements, medical expenses, and more. Unlike a secured loan, such as a mortgage, a personal loan does not require collateral and is based on the borrower's creditworthiness and income.

Personal loans typically have a fixed interest rate, which means that the interest rate does not change over the life of the loan. They also have a fixed repayment period, which means that the borrower makes equal monthly payments over the life of the loan.

Personal loans can be obtained from banks, credit unions, online lenders, and other financial institutions. The interest rate and loan terms offered will depend on factors such as the borrower's credit score, income, and employment status.

- Personal loans come in a variety of forms, including

• Unsecured Personal Loans: These loans do not require collateral and are based on the borrower's creditworthiness and income.
• Secured Personal Loans: These loans are secured by collateral, such as a car or savings account, to lower the lender's risk.
• Debt Consolidation Loans: These loans are intended to pay off several debts by merging them into a single monthly payment.
• Emergency Loans: These loans are intended to offer rapid access to money in case of an unforeseen bill or financial emergency.
• Personal Line of Credit: Like a credit card, this sort of loan gives borrowers access to a certain amount of money that may be borrowed and returned as required.
• Payday Loans: These are short-term loans with high-interest rates intended to be repaid on the borrower's next payday.
• Instalment Loans: These loans require regular payments over a set period of time until the loan is fully repaid.
• Balloon Payment Loans: These loans have low monthly payments followed by a large, lump-sum payment at the end of the loan term.
• It's essential to consider the terms and conditions of a loan before accepting it, including the interest rate, repayment period, and fees.

Personal Loan Eligibility Criteria

• Age: 18-60 years
• Salary: At least Rs. 15,000 per month for salaried customers
• Income: At least Rs. 5 lakh p.a. for self-employed customers
• Credit Score: Preferably 750 and above as having higher credit scores improve chances of loan approval
• Employment Stability: At least 2 years with a minimum 1 year of work experience in the same job for salaried
• Business Continuity: At least 2 years of business continuity for self-employed professionals
• Employment Type: Salaried employees working with reputed organisations, MNCs, Private and Public Limited Companies, Govt. organisations, PSUs, and large enterprises