What is a Personal Loan?

Personal loan is an unsecured loan that is offered to individuals, self employed person and business to meet their personal needs. Virtually every bank offers this loan and it has short processing time compared to other form of loans such as business loan, cash credit etc. Unique feature of this loan is that it is unsecured in nature which means that you don’t have to put any collateral for getting a personal loan from a Bank. In this post, we would look into various features of a personal loan such as interest rates, eligibility, documents required for a personal loan.

Personal Loan interest Rates

Interest rates for a loan from a bank can vary widely from 7% to 25% per annum. Interest rate is usually a factor creditworthiness of a applicant. Credit worthiness is usually measured with credit score, income, past loan performance of the applicant. However, big public sector banks such as SBI, PNB, Bank of Baroda offers  comparatively lower rate of interest than private sector banks. Let us look at interest rates offered on a loan from large private and public sector banks.

 

Bank	Interest Rates
HDFC Bank	10.75% – 21.50%
IndusInd Bank	11.00% – 16.75%
Kotak Mahindra Bank	10.50% – 16.99%
Standard Chartered Bank	11.00% – 15.00%
Yes Bank	20.00% – 22.00%
IDFC First Bank	12.50% – 18.00%
State Bank of India	8.40% to 15.30%
Central Bank of India	12%
Punjab National Bank	10.4% to 14.95%
Bank of Baroda	As per applicant’s risk rating
Oriental Bank of Commerce	10.9% to 12.4%
Union Bank of India	10.06%% to 14.60%
Corporation Bank	12.85% to 13.85%
Canara Bank	10.90% to 13.90%
Allahabad Bank	13%
Indian Overseas Bank	12%

 

Personal Loan Tenure

Bank	Tenure
HDFC Bank	1-5 Years
IndusInd Bank	Up to 5 years
Kotak Mahindra Bank	1-5 Years
Standard Chartered Bank	1-3 Years
Yes Bank	1-5 Years
IDFC First Bank	1-5 Years
State Bank of India	Up to 72 months
Central Bank of India	Up to 48 months
Punjab National Bank	Up to 84 months
Bank of Baroda	Up to 60 months
Oriental Bank of Commerce	Up to 60 months
Union Bank of India	Up to 60 months
Corporation Bank	Up to 60 months
Canara Bank	Up to 60 months
Allahabad Bank	Up to 60 months
Indian Overseas Bank	Up to 60 months

 

Personal Loan Documents

Documents required for a loan from a bank varies form bank to bank but there is a standard list of documents that re required by every bank for your loan processing. Let us have a look at various documents required for a loan for personal use-

• Proof of Identity such as Adhar card, voter ID, PAN card, Driving licence, passport etc.
• Proof of address such as Aadhar card, Voter ID, Driving license, passport, identity card issued by central and state government, pension card issued by authorities etc.
• Latest 3 months salary slips and Form 16
• ITR of a self employed
• Application form and Loan agreement post disbursement

 

If you are interested in availing a business loan from a bank for your business needs then you visit our page on business loan here.