A person in his/her lifetime might require money for many perverse and quintessential reasons and sometimes an unknown legalized lender might just be the best and only option. Banks and Non-Banking Financial Institutions are providing personal loans for their costumes for more than half a century and in return, the borrowers have been paying them the loan amount with interest. This is the way every loan works, and the way an authorized unknown lender helps you. A Personal Loan in this century at this time of year is more than a necessity, but banks and NBFCs sign off their money to nobody that easily, they request and require certain criteria that a person needs to meet before they are a borrower.
The eligibility criteria
- The age requirement to avail a personal loan is a minimum of 18 years and a maximum of 65 years in most banks and NBFCs. Although the least age is 21 years in few other authorized financiers.
- The applicant must be a salaried individual, self-employed individual, or self-employed non-individual(partnerships and co-applicants).
- The applicant must be working for a minimum of 2 years and at least one year with the current employer or company.
- The monthly income of the applicant must be at least Rs20,000.
The mandatory documents to avail a personal loan
ID proof: A government-authorized document verifying the ID of the applicant. PAN card, Voter Id, Aadhar card, Passport, driving license, or any other valid document (anyone).
Residence proof: An authenticated government id specifying and verifying the applicant’s place of residence. It could be a PAN card. Aadhar card, voter id, passport, driving license, or any other valid government id(anyone).
Income proof: A gazette document mentioning the applicant’s yearly or monthly income. The document can be an ITR, form 16, salary slips, or any other valid proof of income.
Bank statement: The bank account statement of the applicant for the last 3 to 6 months depending on the bank or NBFC.
Employment proof: The proof of employment of the applicant. It can be an employee id in the case of salaried individuals and proof for the existence of business in the case of self-employed applicants.
CIBIL score: A credit score by a credit company named CIBIL maintains the personal information, employment information, banking information, credit history, and other necessary documents of an individual, company, or banking personnel. The three-digit number summaries the report, which usually ranges between 300-900. A score above 750 is a great one and below 600 is a bad score. For a personal loan, the score required is a minimum of 700.
Personal loan features
The personal loan has a maximum limit of Rs 50,00,000 as loan amount in most banks and NBFCs though few financiers grant even up to Rs75,00,000 but to sanction that big of an amount, the applicant needs to meet all the eligibility criteria with an excellent credit score. The minimum loan tenure is 12 months and the maximum period is 5 years in most banks and NBFCs. The interest rate of the loan is between 9% and 36% entirely depending on the loan amount, tenure, and the financier. The personal loan EMI calculator can be used to know more about the interest rate of a particular bank or NBFC from their official website. Bankers also charge additional amounts like processing fees, enclosure fees, and other statutory charges. The processing fee is for the processing and approval of the application either via online or offline modes. The charge may either be a fixed rate or a percentage of the loan amount. HDFC Personal loancharges up to 2.50% of the loan amount to a maximum of Rs 25 thousand. The enclosure or foreclosure charge is incurred if the applicant closes the account before the end of tenure. The statutory charges include VAT and other taxes.
Also read this: A Personal Loan make your problems disappear