The market today is flooded with advertisements promoting personal loans. These attractive advertisements lead one to think this as an easy access to money for luxurious lifestyle and holidays. But are they as easy as shown in adverts? Well the truth is – they are, unlike home loans that take forever to get sanctioned, personal loans are quickly available as in a day or two to a maximum of a week, depending on your choice of institute. But always exercise caution when things seem too easy.

But, how does one get a personal loan from bank?

Well, the first step is to apply for one.  You need to approach the bank for personal loan and fill in the application and submit it along with necessary documents. However, in this hi-tech world, where there is a vast amount of information online- it is advisable to check your eligibility online.  Along with the application, you will be required to furnish documents related to your identity and address and your photograph. For salaried individual, you should be able to submit the salary slips- 3 months and Form 16 whereas the self-employed applicants will have to submit last 3 years Income Tax Returns and CA certified balance sheets.

 The other eligibility criteria are-

• Age- preferable  within the age group of 23-60
• Income- this is subject to the area of residence, for a metro city a minimum net salary of Rs. 25,000 is considered while in non-metro cities salary lesser than that is also considered.
• Job stability- The more years you have devoted to a company the better your chances.
• Residence – If you have your own house or stay with family in a rented accommodation with proper rent agreement, you will be preferred than an individual in shared accommodation or as paying guest.
• CIBIL score- A 750 and above credit score is a must.

So what is the maximum amount of personal loan allowed if the above criteria is met?

Well, most banks, NBFC s and Fintech companies do take in and consider personal loan application for amounts as less as Rs. 50,000 and as high as Rs.25, 00,000.

An important factor to consider is the interest rate that is being charged on the personal loan. The interest rate is definitely higher than home loan as they do not require any collateral or guarantor for the loan. The interest rate charge by banks are- 10.85% - 37.00% depending on the banks internal policies. There is also a processing amount that is charged. Most banks do allow a long tenure for the instant personal loans ranging from 6 months to 5 years. This gives you the advantage of option for an EMI that is suitable for your monthly budget.

Advantages of taking personal loan from bank-

• There is no capping on the usage of the loan amount. You can use it to consolidate your debt, pay for education, medical bills or simply fund your marriage or vacation. There is no questions asked by the banks.
• There is no collateral pledged. So there is no need to worry about assets.
• Flexible tenure- based on your requirements the tenure can be adjusted so that the monthly payouts do not burn a hole in your monthly budget.

Top Banks Providing Personal Loans in India

• IndusInd bank
• Yes bank
• HDFC
• ICICI
• Bajaj Finserve
• SBI
• Axis