Frequently Asked Questions on Personal LoansFrequently Asked Questions on Personal Loans
Apnaloan.com Research Bureau
10 Aug 2007
What is a personal loan?
Personal loan is an all-purpose loan, which is given in most cases without any kind of security like a car, home, shares etc.
Who are the lenders?
Most of the nationalised, foreign and co-operative banks offer personal loans. Besides banks, some other finance companies and financial institutions also offer them. For more information, visit our product browser section.
What are the lending rates for personal loans?
Lending rates differ for different financiers and currently range from 12 to 30 per cent. Visit our product browser section for more information.
What is the minimum and maximum amount that can be issued as a personal loan?
Personal loans are available in the range of Rs 15,000 to Rs 10 lakhs.
What is the tenure possible?
The period varies widely; some lenders usually permit repayment up to a maximum of 60 months. However, most lenders restrict the tenure to a maximum period of 36 months. For specific information, visit our product browser section.
What are the eligibility criteria for personal loans?
a. Minimum take-home salary / gross monthly income of Rs 8,000
b. Minimum age 21 years
c. Maximum age 60
(However, this requirement would vary from lender to lender.)
Who can get a personal loan?
a. Salaried individuals
b. Self-employed professionals
c. Self-employed non-professionals
d. Any salaried individual/self-employed professional is eligible for a personal loan and the amount of loan eligibility will differ based on the person's current earnings.
Do I have to pay service charges? If yes, what is the amount?
Service charges of up to 3% of loan amount are levied. This amount differs for various lenders. For details, see our browser section.
Why are personal loans called all-purpose loans?
Personal loans are called all-purpose loans because the financier is not concerned about the purpose for which the loan is taken.
Is a guarantor necessary?
No. Typically, you do not have to provide a guarantor; however, some lenders may demand one. For more details, you can visit our product browser section.
Can I club the income of my spouse with mine?
Yes. You can club the income of your spouse for the purpose of boosting your own eligibility for a personal loan.
How is the repayment done?
Repayment of a personal loan is done by issuing post-dated cheques for the entire tenure of the contract. The amount of the post-dated cheque would be the EMI i.e. equated monthly installment. Some lenders also permit repayment option by way of standing instructions to your bank account or deduction at source from your salary every month.
What is the difference between a personal loan & credit card ?
Unlike loans against credit card, in a personal loan, it is necessary for the borrower to draw out the entire loan and the loan is repaid by way of fixed monthly installments. In the case of a credit card, the interest is charged based only on the amount utilised.