A personal loan is one of the most popular financial products in India because it offers quick access to funds without any collateral. Whether it’s for medical emergencies, travel, weddings, or consolidating debt, personal loans provide flexibility and convenience.
What is a Personal Loan?
A personal loan is an unsecured loan, meaning you don’t need to pledge any asset like property or gold. Banks and NBFCs offer personal loans based on your income, credit score, and repayment capacity.
Key Features:
- Loan amount: ₹10,000 to ₹40 lakh
- Tenure: 1 to 5 years
- Interest rate: Usually higher than secured loans
- No restriction on usage
Eligibility Criteria:
- Stable monthly income
- Age between 21–60 years
- Credit score of 700 or above
- Employment in a reputed organization or stable business
Advantages:
- Fast approval and disbursal
- No collateral required
- Can be used for any purpose
Disadvantages:
- Higher interest rates
- Heavy penalties for late payments
- Can impact credit score if mismanaged
Tips Before Taking a Personal Loan:
- Compare interest rates from multiple lenders
- Borrow only the required amount
- Check processing fees and hidden charges
- Ensure EMI fits comfortably in your monthly budget
A personal loan is helpful in emergencies, but it should be used responsibly to avoid falling into a debt cycle.
