What is a Personal Loan?

● A Personal Loan is an unsecured loan provided based on the borrower’s income, creditworthiness, and repayment capacity.

● It does not require collateral or security, making it an ideal choice for short-term financial needs.

CALCULATE YOUR ELIGIBILITY


Features of Personal Loan


FeatureDescription
Quick DisbursementPersonal loans are usually approved and disbursed within 24-72 hours.
Unsecured LoanNo need to pledge property, gold, or other assets as collateral.
Flexible UsageThe loan amount can be used for any purpose, such as medical emergencies, travel, weddings, education, or debt consolidation.
Loan AmountRanges from ₹50,000 to ₹50 lakhs (depending on income and credit score).
TenureShort tenure of 1 to 5 years.
Interest RatesHigher interest rates compared to secured loans, ranging from 10% to 24% p.a.
Prepayment and ForeclosurePrepayment options are available, but some lenders may charge foreclosure fees (1%-5% of the loan amount).

Eligibility Criteria for Personal Loan

  • Age:
    Salaried: 21-60 years.
    Self-employed: 25-65 years

  • Income:
    Salaried: Minimum ₹15,000 - ₹30,000 per month (varies by lender).
    Self-employed: Minimum annual income of ₹3-5 lakhs.

  • Credit Score:
    A CIBIL score of 700 or above is preferred for approval at competitive rates.

  • Employment Stability:
    Salaried: Minimum 6 months-1 year with the current employer.
    Self-employed: Minimum 3 years in the current business.

  • FOIR/DTI Compliance:
    Fixed Obligation to Income Ratio (FOIR) or Debt-to-Income (DTI) ratio should be below 40%-60%.

Documents Required for Personal Loan

  • KYC Documents:
    PAN card, Aadhaar, or passport for identity and address proof.


  • Income Proof:
    Salaried: Latest 3 months’ salary slips and Form 16.
    Self-employed: ITR for the last 2-3 years, business financials.


  • Bank Statements:
    Last 3-6 months’ statements showing income and expenses.


  • Employment Proof:
    Offer letter, appointment letter, or employer certification.

Costs Involved

  • Processing Fee: Typically 1%-3% of the loan amount.
  • Prepayment/Foreclosure Charges:May vary from 1%-5% of the outstanding amount, depending on the lender.
  • Late Payment Penalty: Charged if EMI payments are delayed (e.g., 2%-3% of overdue EMI).

Benefits of Personal Loan

  • No Collateral Required: No need to pledge assets like property or gold.
  • Quick Approval: Minimal documentation and fast processing.
  • Flexible Repayment: Tenure options between 12-60 months.
  • No Usage Restrictions: The funds can be used for any personal or professional need.

Key Points to Note

  • Higher Interest Rates: Being unsecured, personal loans have higher rates than secured loans.
  • Credit Score Impact: Timely EMI payments are crucial to maintain a good credit score.
  • Loan Amount Limit: Capped by income and creditworthiness, typically up to ₹50 lakhs.
  • Prepayment Clause: Check prepayment terms to avoid additional charges.

When to Opt for a Personal Loan?

  • When you need urgent funds for emergencies or short-term needs.
  • When you do not have collateral to pledge.
  • When you want fast disbursal and minimal documentation.

EMI Comparison

Interest RateMonthly EMI (₹)Total Interest Paid (₹)Total Amount Paid (₹)
10%₹10,624₹1,37,457₹6,37,457
15%₹11,932₹2,15,918₹7,15,918
20%₹13,248₹2,94,876₹7,94,876

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EveOn Money

EveOn Money is revolutionizing the loan landscape in India by connecting small loan Channel Partner with trusted banks, leveraging AI-powered technology, and offering expert in-house loan assistance. We empower Channel Partner, banks, and borrowers with a frictionless and efficient experience throughout the loan journey. "A fintech trademark registered by Bridgeve Technologies Private limited", CIN:U62099WB2024PTC268003.

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