Personal loans have a lot of importance in different financial scenarios due to their adaptability as well as their accessibility. While personal loans are flexible but it is essential to use them prudently. The only amount you can borrow and making sure you pay your loan on time. Which is essential to maximize your CIBIL Score from a personal loan, as well as reducing financial risk. Please finds the points discuss below to check your personal loan eligibility.
Age
To avail personal loans from minimum age should be 21 to 60 years for salaried class. For working professional and business class it is 21 to 65 years.
Income
Applicant must have minimum 15000 thousand rupees monthly income to avail personal loan from any financial institutions or banks. It may varies from bank to bank. Generally, applicant must have monthly disposable income of Rs. 25,000 and more.
Personal Loan Purpose
- Debt Consolidation: Combining high-interest debts into a single personal loan with a lower interest rate can make payments more manageable and potentially reduce overall interest costs.
- Emergency Expenses: Personal loans covers unexpected costs like medical bills, car repairs, or home repairs.
- Home Improvement: Funding renovations or repairs to improve your home’s value or enhance comfort and functionality.
- Education: Personal loan acts as emergency line of credit in financing education expenses, such as tuition fees, books, or other educational costs, especially when other financial aid options are exhausted.
- Weddings: Personal loan cover expenses related to weddings, including venue booking, catering, attire, or honeymoon costs.
- Travel: Funding a vacation or travel plans that might not fit into your current budget, allowing you to explore new destinations or take a well-deserved break.
- Large Purchases: Buying big-ticket items like appliances, electronics, or furniture.
- Business Expenses: Start-ups or small businesses might use personal loans to cover initial expenses before establishing business credit.
Quantum of Personal loan amount, Interest rates & Tenure
| Sr. No. | Bank | Minimum ROI in % | Maximum Loan in Lakh | Tenure in Months |
| 1 | Bank of Maharashtra | 10 | 20 | 84 |
| 2 | Bank of Baroda | 10.1 | 20 | 84 |
| 3 | Punjab & Sind Bank | 10.15 | 10 | 84 |
| 4 | Bank of India | 10.25 | 25 | 84 |
| 5 | INDUSIND BANK | 10.25 | 50 | 72 |
| 6 | AXIS | 10.49 | 40 | 84 |
| 7 | HDFC | 10.5 | 40 | 72 |
| 8 | ICICI | 10.5 | 50 | 84 |
| 9 | Canara Bank | 10.65 | 30 | 84 |
| 10 | IDFC First Bank | 10.75 | 100 | 84 |
| 11 | UCO Bank | 10.95 | 20 | 84 |
| 12 | KOTAK MAHINDRA BANK | 10.99 | 40 | 72 |
| 13 | YES | 10.99 | 40 | 84 |
| 14 | Bandhan Bank | 10.99 | 15 | 60 |
| 15 | Tata Capital | 10.99 | 35 | 84 |
| 16 | IDBI Bank | 11 | 5 | 60 |
| 17 | Karur Vyasa Bank | 11 | 10 | 60 |
| 18 | Bajaj Finserv | 11 | 40 | 96 |
| 19 | State Bank of India | 11.05 | 30 | 84 |
| 20 | Punjab National Bank | 11.4 | 20 | 72 |
| 21 | Fedral Bank | 11.49 | 25 | 60 |
| 22 | Union Bank of India | 11.8 | 15 | 60 |
| 23 | South Indian Bank | 13.1 | 20 | 60 |
| 24 | RBL | 14 | 20 | 60 |
| 25 | Muthoot Finance | 14.5 | 10 | 60 |
SBI personal loan offers interest concession to their salary class customer. SBI offers special personal loans to Defense Personnel, Teachers, Railway Employees.,
HDFC, ICICI, Axis are very aggressive banks in disbursing personal loans to salary and Business class people.
Who can avail personal loan
Bank’s offer red carpet to the salary account holders for personal loans. Many PSBs which possess Government Salary account holders offers special and attractive rate of interest to their salary account holders. Many PSBs offers special personal loans to Teachers, Defense personals, Government employees at lowest interest rates in the banking industry. However, applicant must have minimum 1 year confirmed service and at least 2 years of ITR or From No 16.
Banks and many financial institutions offers provides personal loans to working professional like Doctors, Engineers, CAs, Architect, Business man. They must have minimum 2 years of running business entity & ITR. etc.,
Deduction Norms for Personal loans
If Mr. A is salaried person in private limited company at Mumbai, having monthly salary gross salary of Rs. 1,00,000/- (One Lakh). However, as per his salary slip there are some mandatory deductions like, Provident Fund, Professional Fund, Income Tax, Insurance Premium, etc.,
Now, many banks have deductions norms up to 65% to 70% on gross salary of the applicant. In this case let’s say 65% total deduction norms. Therefore, including proposed EMI, existing other loan installments if any & current mandatory deductions from salary slips bank can maximum deduct 65,000/-.
| A | Gross Salary | 1,00,000/- |
| B | Salary Mandatory Deductions | 20,000/- |
| C | Total Permissible Deductions | 65,000/- |
| D | Other Loans EMI like Housing Loan | 30,000/- |
| E | Total Deductions (B+D) | 50,000/- |
| F | Amount available for proposed Personal Loan EMI (C-E) | 15,000/- |
This deduction norms are not applicable to self-Employed Business, working professional, there net income in the balance sheet is already calculated by deducting salary wages, admin expenses, etc.
CIBIL Score
The most important factor in determining the interest rate on the personal loan. Also, it checks your creditworthiness. A CIBIL scores of more than 750 will be accepted by all banks and NBFC. The higher your CIBIL score the lower the rate is that applies to you. This is in inverse proportional to the CIBIL score.
Our team strongly suggests you maintain the excellent CIBIL score to ensure more financial stability. It is also suitable for banking institutions and banks of every kind.
Loan Processing Fees & foreclosure charges f
Processing fees in the foremost factor one should always consider before availing personal loans from any banks or financial institutions. There are many PSBs banks who offers 0.50% to 1 % processing fees to their salary account, existing housing loan account holders, Business loan, with no foreclosure charges.
Private Banks higher processing fees than that of PSBs, it have 1 % to 3% processing fees along with 2% to 4% foreclosure charges.
Team Credit Bajar strongly recommend to check processing fees and foreclosure charges carefully before availing personal loans.
EMI Default Charges
It varies from Bank to Bank, but ECS default charges starts from Rs.500 to 2000 along with GST. Default in repaying personal loans also damages your CIBIL scores. which hampers your further plans to avail Housing, Car loans etc., We strongly recommend trusted readers of Credit Bajar to maintain EMI amount 2 to 3 days before your due date to avoid ECS default charg
Conclusion
A personal loan can prove to be an effective financial instrument which allows flexibility and access to manage various costs. If it’s for consolidating debts with high interest or handling emergencies that arise and financing large purchases or even pursuing your own objectives, the versatility of personal loans can offer a cushion of financial security when required.
Although this loan choice is convenient but it is important to consider the subject with care. Knowing the terms, charges, and rates associated with the loan is essential to make informed choices. Being responsible, borrowing within your budget and having a clearly defined plan of repayment are essential to making use of a personal loan benefit you.
