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Personal Loan

Features and Benefits of Personal Loans:

Flexibility to Use Funds:

Unlike other loans, personal Loans can be used just as you wish. There are no restrictions and conditions. You can avail Personal Loans for marriage, medical expenses, house renovation, and so on.

Quantum of Loans:

Personal Loans can range from Rs 10,000 to Rs 20 Lakhs. The loan amount depends on the borrower’s financial and credit history.Flexible Tenure:

Personal Loans are available for a tenure ranging from 12 to 60 months.No Security:

Personal loans are approved based on the borrower’s income and credit history. As there’s no collateral, many people prefer to use Personal Loans for a financial emergency.Quick sanctioning:

Personal Loans are sanctioned really fast. It hardly takes 24 to 48 hours for approval. This is because it has minimal documentation.Documents Required To Availing a Personal Loan

1. For Salaried:

PassportDriving LicenseVoters IDPAN CardPassport or utility billsLast 3 months Bank Statement

2. For Self-Employed:

PassportDriving LicenseVoters IDPAN CardPassport or utility billsLast 2 years audited financial statementsLast 6 months Bank statementOffice address proofEligibility criteria to avail a Personal Loan

A minimum salary of Rs 15,000 to Rs 25,000 a month.You must be between 22-59 years.The borrower must have a bank account.A Minimum CIBIL score of 700 is a must.The borrower must be residing at his/her current residence for at least a year or two.Rate of interest on Personal loans:

The rate of interest on Personal Loans depends on three major factors:

Borrower's income and his ability to service the loan.The Company/Employer for whom the borrower works.The credit history of the borrower.

Rate of Interest on Personal Loans usually ranges from 14% to 17% a year.

What happens when a Personal Loan is not repaid?

If a borrower defaults, CIBIL score is affected. This will reflect badly in his credit information report. The borrower will face issues and difficulties when availing any other loan.

Things to keep in mind while availing a Personal Loan:

Rate of Interest:

Rate of interest charged on Personal loans is quite high as these are unsecured loans. The rate of interest on Personal Loans ranges from 14-17% a year. Interest rate on Personal Loan depends upon the borrower’s income, creditworthiness, age, employer/company, and so on. Before deciding on a particular lender, compare the interest rate charged by different lenders. Then select a Personal Loan with lower interest rates.Charges on a Personal Loan:

Charges levied on personal loans vary from lender to lender. These charges include documentation charges, collection charges, repayment mode swap charges and cancellation charges. Banks also levy heavy penalties in case of late EMI’s. Be aware of all such charges that bankers may charge.Tenure of Personal Loan:

Personal loan repayment tenure offered by the lenders varies from 1 to 5 years. Some lenders even offer a longer tenure of 7 years. If you are looking for lower EMIs, then you opt for a higher tenure. If you want to pay off your loan quickly, then you should opt for a shorter tenure. If you choose a longer tenure, then you will end up paying more interest on the loan.Prepayment charges on Personal Loans:

Borrowers should be careful with prepayment charges. Opt for the lender who does not levy prepayment charges or a lender who charges a lower pre-payment charge. Processing fees on Personal Loans:

Processing fees on Personal Loans include various expenses incurred by the bank while approving the loan. The processing fee ranges from 1% to 2%. Processing fee is non refundable.Personal Loan mistakes to avoid:

Do not avail too many personal loans:

Do not avail personal loans for flimsy reasons. You might struggle with the repayments. You could fall behind in payments and your credit score is affected.Borrow as per repaying ability:

Availing a Personal Loan is easy but repaying is difficult. Debts are fun when acquiring them, but not when repaying them. Personal Loans should be availed only if a borrower is confident about making the repayments in time. Personal loans charge interest as high as 14% to 17% a year. The EMI on your personal loan should not be more than 35- 40% of your salary, after accounting for all other expenses.Do not neglect the fine print:

Never sign on the dotted line without reading the terms and conditions of the personal loan. Read the fine print before signing up for a Personal Loan with the bank. If there is a fight, dispute or a misunderstanding between the borrower and the bank, the fine print stands against the borrower. Signing the dotted lines means agreeing to the terms and conditions of the loan. Study the terms and conditions of the loan like fees, interest rates, pre-payment charges and pre-closure charges. Do not avail Personal Loans with a long tenure:

Personal loans have tenure of 1-7 years. Opting for a Personal Loan with tenure of 7 years to have extra time to repay the loan, is not a good idea. Long tenure means borrowers will have to pay more interest.Look out for alternatives:

Personal loans charge the borrower a very high rate of interest. Borrowers should look for other alternatives like Loan against property, Loan against fixed deposits and Gold loan. These loans can be availed at a much lower interest rate than a Personal Loan.


S-1, Ambe Business Center
Opposite LIC Office
Magarpara Road
Bilaspur (C.G.)
+91-98271 36835
+91-92291 00009

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