What is a Personal Loan?
A personal loan is an unsecured loan that can be used for any personal purpose like medical expenses, weddings, travel, debt consolidation, or emergencies. No collateral is required.
What is the maximum personal loan tenure?
Most banks offer personal loans for a maximum tenure of 5-10 years. However, shorter tenures of 1-3 years are common and recommended to minimize interest costs.
What documents are required for a personal loan?
Required documents include: Identity proof (Aadhaar/PAN), address proof, income proof (3-6 months salary slips), bank statements (3-6 months), employment proof, and passport-size photographs.
How much personal loan can I get?
Personal loan eligibility depends on your income, credit score, existing obligations, and employment stability. Generally, you can get up to 10-15 times your monthly salary, subject to lender policies.
What affects personal loan interest rates?
Interest rates depend on your credit score (higher is better), income level, employment type (salaried/self-employed), relationship with bank, loan amount, and tenure. Good credit scores (750+) fetch lower rates.
Can I prepay my personal loan?
Yes, you can prepay your personal loan partially or fully. Some lenders may charge prepayment penalties (0-5% of outstanding amount). Check your loan agreement for specific terms.
What is the difference between secured and unsecured loans?
Personal loans are unsecured (no collateral needed) with higher interest rates. Secured loans like home/car loans require collateral and have lower rates. Unsecured loans are faster to process.
What is a good credit score for personal loans?
A credit score above 750 is considered excellent and qualifies you for best interest rates. Scores between 650-750 are good, while below 650 may face rejection or higher rates.