Personal Loans Explained: Everything You Should Know Before You Borrow

Author: Loan Capital

What is a Personal Loan?

A personal loan is an unsecured loan that does not require any collateral, meaning you do not need to provide any security to borrow the money. These loans are offered by banks, private financing companies, and online lenders.

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What Can a Personal Loan Be Used For?

Unlike other loans with specific purposes, personal loans are versatile and can be used for a wide range of needs, including:

Buying a car or motorcycle.
Home renovations.
Covering medical expenses.
Funding weddings.
Supporting education.
Other personal financial needs.

Benefits of a Personal Loan

No Collateral Required: Personal loans are unsecured, so no asset is needed as security.
Fast Approval: Quick processing and approval.
Online Application Process: Convenient and accessible application process.
Flexible Repayment Options: Borrowers can choose repayment plans based on their needs.
Quick Disbursal: Funds are disbursed promptly upon approval.

Documents Required for a Personal Loan

For Salaried Individuals:

Complete and accurate loan application form.
PAN card.
KYC documents (Aadhaar, Passport, or Voter ID).
Employment ID.
Last 3 months’ salary slips.
Last 3 months’ bank statements of the salary account.

For Self-Employed Individuals:

Complete and accurate loan application form.
PAN card.
KYC documents (Aadhaar, Passport, or Voter ID).

Eligibility Criteria for a Personal Loan

Age: Between 25 and 50 years.
Income: Minimum of ₹10,000 per month.
Occupation: Open to both salaried and self-employed individuals.
Residency: Must be a resident of India.
Bank Account: An active savings bank account is required.