Personal Loan, personal loan, personal loan. I don't like; I avoid. But! Personal loan likes me! I can't avoid.

Rocky Bhai may have his whole Kolar Gold Field to handle his requirements, but you don’t! That's why choosing a suitable personal loan is vital to finance your current and future needs. And what comes as the primary deciding factor? Interest rate. Everyone usually prefers to take loans with the lowest interest rates. But should that be your only criterion?

Apart from the prominent banking institutes, non-banking financial corporations (NBFC) provide attractive loans and offers to fuel the customer's needs and dreams.

Let us see how different NBFCs provide the interest rate so that you can choose the correct loan to build your own KGF.

Are personal loan interest fixed?

Sometimes, it is more than the interest rate, and how it is calculated takes the front seat in the amount to be paid back. There are two main types of interest on the principal amount as the loan tenure progresses.

Fixed-rate of interest

Here, the interest, as the name suggested, is fixed. So, your EMI will always be the same.

Floating rate of interest: 

Here, the loan interest levied depends on the repo rate. So, if the repo rate reduces, you pay back less than you owe. But if the repo rate increases considerably, you must pay extra. 

Most of the lenders choose a fixed rate of interest for personal loans.

How is interest calculated for the personal loans?

In addition to the interest rate type, there are two different methods of calculating the interest.

Flat method: In the flat method, the interest paid back is constant. Since the principal amount is reduced, the interest you are paying will be high towards the end of the loan.

Reducing interest method: Here, the principal amount is reviewed monthly or yearly, and interest is levied on the unpaid principal. So, the interest paid will be high initially but reduced as tenure continues.

Understanding what type of loan is used and the calculation made for it is beneficial.

Which personal loan is best/ good?

There is no objective answer to this question. Different lenders become attractive to other individuals for various reasons. But one of the most critical factors everyone chooses for a loan is its interest rate. You don’t want to pay extra, which you can save for another purchase. 

Though the following lists provide starting interest rates, they can differ based on your CIBIL score, repayment history, income, employment and bank terms. Since personal loans are unsecured loans, it goes without saying that you should have a good credit score for better terms.

1.Fibe Personal Loan

Fibe, earlier known as EarlySalary, is an online lender that targets young working professionals. So, Fibe focuses on this demographic.

Highlights:

• Completely online processing streamlined and reduced to 3 steps: 

Registration, Approval and Transfer of Funds.

• EMI is calculated based on the reducing balance method.

Eligibility:

• Aged between 21-55 years
• Minimum salary of Rs. 18,000 in metro cities, Rs.15,000 for non-metro cities
• Resident of India

Documents Required:

• Identity proof documents: Aadhar, PAN, etc.
• Address proof documents: utility bills, Voter’s ID, etc.
• Income proof documents: bank statements, salary slips

More details on Fibe Personal Loan can be found here!

2.Dhani Personal Loan

Dhani is a digitised loan services application that was formerly known as Indiabulls.

Highlights:

• The principal amount range is considerably large enough to accommodate most customers.
• Completely digitised process.
• Dhani also offers a no-EMI personal loan, which allows you to pay back the entire amount after 90 days with no interest. Learn more about the Dhani No-EMI Personal Loan here.

Eligibility:

• Must be a salaried professional or self-employed entrepreneur

Documents Required:

• PAN card
• Address Proof such as Utility bills, Voter’s ID, etc.
• Bank documents such as account details.

For more details about check out Dhani Personal Loan

3.Piramal Personal Loan: 

The finance branch of the conglomerate Piramal Group, Piramal Finance, provides Piramal Finance with personal loans.

Highlights:

• Zero Fore-closure and pre-payment charges
• There are EMI collection/ pickup charges and Cash collection charges of Rs.250 per visit and 1% of the amount (excl. taxes)

Eligibility:

• Credit score of 750 and above
• An employee at any public or private enterprise
• Aged from 21 to 58 years.

Documents Required:

• Identity proof: Aadhar, PAN card, etc.
• Address proof: Utility bills, Voter’s ID, etc
• Income proof: salary slip and bank statement.

Check out more about the Piramal Personal Loan here!

4.Bajaj Finserv Personal Loan

Highlights:

• Offers three variants of personal loan: Term Loan, Flexi Term Loan, and Flexi Hybrid Loan
• In Flexi Term, you can manage your unexpected fund requirements from the existing loan without causing much difference in the current loan.
• Flexi Hybrid is identical to Flexi Term, except that only interest is applicable during the initial period. Afterwards, interest and principal are added for repayment.

Eligibility:

• Minimum monthly income of Rs. 25001/-
• Employed at Public, Private or MNC
• Minimum CIBIL score of 685
• Aged 21-80 on the completion of loan tenure
• Must be an Indian citizen

Documents Required:

• PAN Card
• Bank statements of the past 3 months.
• KYC documents such as Aadhar, Passport, Voter’s ID
• Employee ID
• Salary slips of the past 3 months
• Utility bills of electricity and piped gas.

5.Flipkart Personal Loan:

Apart from financing Flipkart purchases, Flipkart also offers attractive personal loan offers. Clubbing with Axis Bank, Flipkart has entered the personal loan market with attractive interest rates, offering loan amounts of up to 10 Lakhs. 

Highlights:

• Existing Axis Bank customers can have a better repayment period under this loan.

Eligibility:

• Minimum monthly income of Rs. 20000/-
• Aged 21-55 on the completion of loan tenure
• Must be a resident of India

Documents Required:

• PAN Card
• Bank details such as account number, debit card number
• KYC documents such as Aadhar and PAN

More details on the Flipkart personal loan are found here.

6.Tata neu/ Tata capital personal loan:

Tata Capital provides attractive personal loans which the TATA Neu mobile application can access. TATA Neu is a mobile application that brings all TATA-related brands under the same umbrella.

Highlights:

• TATA capital personal loans can be applied entirely online, without stepping into an office or through the company branch offices.
• Customers can choose between a regular EMI option and a unique Step-Up Flexi Loan EMI option, where your initial EMI will be minimal. As your salary increases, your EMI will be increased.

Eligibility:

• Minimum income of Rs.15,000/-
• Minimum 1 year of work experience
• Aged between 21-58 years of age

Documents Required:

• KYC documents such as Aadhar and PAN
• Proof of employment
• Income proof

More details on TATA Capital Loan can be found here.

7.Poonawalla Fincorp Personal Loans:

Poonawalla Fincorp, previously named Magma Fincorp Ltd, is engaged in consumer and MSME financing.

Highlights:

Offers the lowest interest rate on this list!

Eligibility:

• Must be a full-time employee at Central Govt, PSU, MNC, Listed, Unlisted Public Ltd, Pvt Ltd, LLP, or companies listed internally.
• Minimum 1 year of work experience
• Minimum 1 month of stable employment at the current company
• Minimum take-home salary of Rs. 30,000/-
• Indian citizen

Documents Required:

• KYC Documents: PAN, Aadhar, Voters ID, etc.
• Address proof: Utility bills, Passport, etc.
• Employment Proof: Employee agreement, Employee ID, etc.
• Income Proof: Salary slips
• Financial Documents: Bank statements

As you can see, the documentation and eligibility criteria for this NBFC are demanding.

Read and look for more info about Poonawalla Personal Loan here!

Which personal loan is easy to get?

Due to fast processing, most of the loans presented by NBFCs and Banking institutes have become relatively easy to approve. 

From the NBFCs mentioned above, eligibility for the Dhani seems the easiest. However, upon hard enquiries, it may change. Dhani hasn’t mentioned the minimum credit score required for the approval.  

How easy or challenging the eligibility is depends entirely on your current status. Most personal loans will be processed if you have a stable job and income. For instance, Fibe, Tata Capital, and Flipkart consider a stable job with a salary of Rs. 15,000 or more appropriate for loan eligibility.

With an excellent credit score of 750 and above, you can enjoy extra flexibility and advantages in your terms. Besides the mentioned points, your past repayments, age, salary, employment and relation with the lenders also impact your loan.

So, it's crucial to maintain good credit behaviour from the beginning.

Want to learn how to manage your credit score properly? Read here!

Which is the personal loan with the lowest interest rate?

Poonawalla Fincorp provides an outstanding interest rate of 9.99%, making it one of the lowest interest rates. In comparison, prominent banks such as ICICI provide a starting interest rate of 10.80%, while SBI offers 11.30%. 

But Poonawalla’s criteria is eligibility criteria are demanding compared to the rest on the list.

Can I get a Personal Loan without a CIBIL or credit score?

Since a personal loan is unsecured (without collateral), you must be creditworthy to take out a personal loan. So, lenders will use credit score as a criterion to inspect your past credit history. The list where credit score is not mentioned as a definite criterion for eligibility is Flipkart-Axis Bank, Dhani, TATA Capital, and Fibe.

Can I get a personal loan without proof of income or a salary slip?

The salary slip is to validate the borrower's employment and income. Although most of the NBFCs mentioned require them, Flipkart and Dhani Personal Loan do not require salary slips or proof of income for approval. However, these companies need bank statements and bank details for documentation.

Is a personal loan good or bad?

Again, personal loans, whether good or bad, are entirely subjective. Personal has the advantages of:

• No collateral required
• It can be used for a wide range of requirements
• Is fairly accessible 
• Very short processing time

As long as you can manage your EMIs and repayment on time, loans won’t be an issue. However, too many unsecured loans may affect your credit score. So, it's essential to have an overview of your financial situation before applying for another loan or a credit card. 

In conclusion, selecting the right personal loan depends on various factors, including interest rates, eligibility criteria, and financial situation. Whether you opt for a loan from a prominent banking institute or an NBFC, understanding the terms and conditions is crucial. Ensure you maintain a good credit score and stable income to enjoy better loan terms. Personal loans can be a valuable tool to meet your financial needs, but managing the loan wisely is essential to avoid negative impacts on your credit score. Evaluate your options carefully and choose a loan that best suits your requirements.

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