What Are the Documents and Eligibility Needed for a Personal Loan in India?

Considering applying for a personal loan? There are several benefits of personal loans. These loans are unsecured loans, i.e. they do not require you to submit any collateral and are easier to obtain as compared to secured loans like home/auto loans. A personal loan can be used to meet diverse requirements right from renovating/repairing your home and taking care of wedding expenses to meeting higher education and medical emergency costs.

However, you should always be mindful of the eligibility criteria for personal loans. This varies from one lender to another but there are a few basic tenets that you should be aware of. It is recommended that you use an eligibility calculator to calculate the amount that you are eligible for. This will help you firm up a proper budget and also apply for the right amount without going over the top.

Here are some necessary details on personal loans:

1. The Loan Amount usually ranges between Rs.50,000 and Rs.25,00,000 depending on the policies of the lender.

2. There can be fixed personal loan tenors varying between 1 and 5 years.

3. The processing fees can range between 1-4% of the loan amount.

4. The EMI (Equated Monthly Installment) will contain both Principal and Interest components.

Basic personal loan eligibility criteria usually encompass the following:

1. Age between 25-59 years

2. Bank Account

3. Applicant should have monthly income

4. Application should have a good credit history

5. Applicant should have monthly repayment capabilities

6. The Loan should not have been rejected within the last 3 months

Here are the documents that you will have to provide for getting your personal loan approved:

1. Passport size photograph

2. Filled up and signed application form

3. Salary Slips for last 3 months

4. Bank statements for last 6 months, showing salary credits and updated within the last 15 days

5. Proof of Address- Driving License/Passport/Voter ID Card/Ration Card/Rent Agreement/Bank Statement/Electricity or Water Bill/Telephone Bill

6. Proof of Identity- Voter ID Card/PAN Card/Passport/Driving License/Employee ID proof and proof of signature in case of Government employees

7. Schedules of existing loans along with bank statement reflecting all EMI debits

Personal loans are a godsend for those looking for money urgently to take care of diverse requirements. Make sure that you meet the eligibility criteria and try and maintain a good CIBIL score since that is the stepping-stone towards establishing your creditworthiness.