In recent years, a rising number of people have turned to personal loans to cover their extra expenses. Unlike other types of loans, personal loans allow borrowers to obtain funds fast and with less paperwork. Concurrently, the procedure is considerably less complex, allowing individuals to borrow money rapidly in times of urgent necessity.
What is a personal loan?
Personal loans are sought-after unsecured loans provided by financial or non-financial institutions to assist customers in meeting their costs depending on particular criteria such as employment history, income, credit history, etc. In this case, the cash is provided all at once, and the borrower can repay the money plus interest as per the loan term.
Personal loans allow an individual a free hand in times of emergency since they provide fast cash with no restrictions on how the loaned money may be spent. They are granted without any kind of collateral and can be leveraged for a wide range of purposes.
General eligibility criteria for Personal Loans
Before applying for personal loans, check out whether you are eligible for that.
- You should be between the ages of 25 and 61.
- Normally salaried individuals or self-employed individuals are the two most popular job backgrounds. However, students, stay-at-home moms, and retired professionals are welcome to apply if they meet specific terms and conditions.
- You must be either currently employed in a company or have previous business experience of at least two to five years.
- Your total monthly revenue should be at least INR 5000.
- Your overall job experience may range from one to three years or more.
- You should have a CIBIL score of at least 700.
- Your maximum EMI should be no more than 65 percent of your gross income.
Benefits of personal loans
Personal loans can now be issued within 24 hours following approval. These are extremely useful in times of financial crisis or medical emergency.
Financing up to nearly INR 25 lakhs
In the form of personal loans, you can borrow up to INR 25 lakhs. The usage of this money is unrestricted. You can spend it on education, medical expenditures, property renovations, and so forth.
No collateral needed
Personal loans are unsecured loans, meaning that borrowers don’t have to mortgage their home or any other assets to get the loan.
Flexible terms of repayment
You can repay the loan amount over 12 to 60 months with this type of loan. You may choose the tenure based on your convenience and financial status.
Low rates of interest
Personal loan interest rates are typically kept low to not overwhelm people with EMIs.
Easy eligibility criteria
The eligibility conditions, as previously stated, are pretty simple to satisfy. Many people can readily apply for loans and utilize them for various objectives.
You can even be eligible for certain tax exemptions depending on how you use the personal loans.
Wide range of usage
The borrowed money can be used for whichever purpose you like. You may spend the money for whatever you want – a wedding, a vacation, a gadget, a company investment, house remodeling, and so on. A home or a car loan, as the name suggests, must be used for a specific purpose.
Documents required to be submitted by the salaried individuals
Proof of identity:
To begin, you must submit a copy of your proof of identity. This might be your Aadhaar card, voter identification card, driver’s license, employee identification card. Passport and PAN card Any one of these should be submitted to the bank.
After that, you must provide proof of your residential address. Utility bills (e.g., electricity bills, phone bills, etc.), ration cards, voter id cards, Aadhaar cards, PAN cards, driver’s licenses, passports, and so on can be used as proof of address. Please submit one of these.
Proof of ownership of the residence:
You can submit your electricity, maintenance, and property documents as proof of ownership.
Proof of Income:
It plays an integral part in the criterion for granting personal loans. To fulfill the essential eligibility criteria necessary for the issue of personal loans, you must show proof of income.
Along with the completed form no. 16, you must present salary slips for the previous three months of income. With this, attach a bank statement indicating that the salary for the last six months has been paid to your account.
You have to submit one colored passport-sized photograph.
Proof of job continuity
You must include proof that you are still employed in your work profile. It might be the present employer’s certificate of employment. If you have been employed for more than two years, you must also present an appointment letter from your current employer.
Finally, if you have experience, you should submit a certificate of experience (here, you can submit the relieving or appointment letters from the previous employees).
Proof of investment (if applicable)
You have to submit the proof of assets, properties, shares, fixed deposits, etc.
Applicants must submit all these documents with the complete loan application form, which you can download from the lending bank’s website.
Documents required to be submitted by self-employed individuals
Proof of Identity
You must submit one copy of your identification proof, which can be an Aadhaar card, a voter’s ID card, a passport, a PAN card, a driver’s license, etc.
Proof of Residence
The residential proof is next in line. Residential evidence may include the most recent utility bills (such as an electric bill or a phone bill), a PAN card, an Aadhaar card, a voter ID card, a passport, and a ration card. You must send a copy of any one of these.
Proof of ownership of the residence
You must provide proof of ownership of your house. Submit the utility bills (electricity or phone bills) or the maintenance documents. You can also obtain a direct copy of the property paperwork.
Proof of your office address
You must present proof of your office address, just as you must give evidence of your residential address. It might be your latest utility bills, property documentation, or maintenance invoices. Please submit one of these.
Proof of business
In this case, documentation of company registration is required. Moreover, you must present a copy of your tax registration as well as proof of your shop’s establishment. Without these, there is a strong chance that your loan will be rejected.
Proof of Income
You must produce evidence of income, which usually consists of ITRs (Income Tax Returns) from the previous two years. This should also include a summary of your income, audit report, balance sheet, and business profits and losses.
You have to submit copies of passport-sized colored photographs of your recent age.
Proof of Investment (if applicable)
If you have any assets, such as property investment, shares, or fixed deposits, you must provide proper documentation for them.
Submit the transactional statement of your bank account for the last 1 year.
A personal loan is handy since you can repay it over time in manageable installments, and you can obtain a speedy disbursement with proper documentation.
When applying for a personal loan, consumers must present documents, depending on the circumstances and whether the applicant is salaried or self-employed. These details have been mentioned in the article to clarify your doubts.
Money View also strives to help citizens obtain personal loans in the easiest way possible and without a hassle. In addition, it offers affordable interest rates in personal loans to its customers to assist them in coping with monetary difficulties.
A personal loan could be an ideal financial solution for you in light of its advantages. If you’re thinking about getting a loan, a personal loan could be the best option.