Want a personal loan? Eligibility, documents you need

Personal loans are highly expensive and are not recommended, but they can help address specific financial needs, such as medical emergencies, home renovations, etc. These loans do not require security or collateral.

Who offers the loan?
Banks and NBFCs offer personal loans with competitive interest rates. NBFCs offer more relaxed eligibility criteria and faster processing, but may charge higher interest rates. Peer-to-peer platforms connect borrowers with lenders, often providing competitive rates and flexible terms.


Process for securing loan
To secure a personal loan, determine the amount needed and ensure that it fits your financial plan. Check the lender’s eligibility criteria, compare loan offers, and submit your application with accurate details. The lender will verify your documents and assess your creditworthiness. On approval, the loan amount is typically disbursed to your account within hours, or a few days.

Documentation
The following documents are typically required:
ID proof: Aadhaar, passport, voter ID, or driver's licence.
Address proof: Utility bills, rent agreement, or passport.
Income proof: Salary slips, ITR or bank statements.
Employment proof: Appointment letter or business registration documents (for self-employed).
Other documents: Completed loan application form and passport-sized photographs.

Points to note

• It is important to maintain a high credit score for securing better interest rates.
• It is essential to keep the debt-to-income ratio low to ensure financial stability.

Content courtesy Centre for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.