Personal Loan Guide

What is a Personal Loan?

A personal loan is an unsecured loan that helps you meet your current financial needs. Unlike secured loans, you don't need to pledge any collateral or security while availing a personal loan. This makes it a popular choice for individuals who need quick access to funds without risking their assets.

Key Features of Personal Loans

• No Collateral Required: You don't need to pledge any assets as security
• Quick Disbursal: Funds are typically disbursed within 24-48 hours of approval
• Flexible Usage: Use the loan amount for any legitimate purpose
• Fixed Interest Rates: Interest rates remain constant throughout the loan tenure
• Flexible Tenure: Choose repayment tenure from 12 to 84 months

Types of Personal Loans

Personal loans come in various types to suit different financial needs. Understanding these types will help you choose the right loan for your specific requirements.

1. Wedding Loans

Special loans designed to cover wedding expenses including venue booking, catering, jewelry, and other wedding-related costs. These loans typically offer higher amounts and longer tenures.

2. Medical Emergency Loans

Quick disbursal loans specifically for medical emergencies. These loans often have simplified documentation processes and faster approval times to handle urgent medical situations.

3. Travel Loans

Loans for domestic and international travel expenses including flight tickets, hotel bookings, and other travel-related costs. Some lenders offer special deals on travel loans during holiday seasons.

4. Home Renovation Loans

Specifically designed for home improvement and renovation projects. These loans may offer better terms than general personal loans if used strictly for home renovation.

5. Debt Consolidation Loans

Loans to consolidate multiple debts into a single loan with a lower interest rate. This helps in managing multiple EMIs and potentially reducing the overall interest burden.

6. Consumer Durable Loans

Loans for purchasing consumer durables like electronics, appliances, and furniture. These are often offered in partnership with retailers and manufacturers.

Eligibility Criteria

To qualify for a personal loan with Finvare, you need to meet certain eligibility criteria. While these may vary slightly between lenders, the following are the general requirements:

Age Criteria

• Minimum Age: 21 years
• Maximum Age: 60 years at loan maturity

Employment Type

For Salaried Individuals:

• Minimum work experience: 1 year with current employer
• Total work experience: 2 years
• Minimum monthly salary: ₹15,000 (may vary by city)

For Self-Employed Individuals:

• Business vintage: Minimum 3 years
• Minimum annual income: ₹3 lakhs
• Profitable business for the last 2 years

Credit Score Requirements

• Minimum CIBIL score: 650
• Preferred CIBIL score: 750 and above (for better interest rates)
• No history of loan defaults in the last 12 months

Documents Required

Having all the necessary documents ready can significantly speed up your loan application process. Here's a comprehensive list of documents typically required for a personal loan:

Identity Proof (Any one)

• Aadhaar Card
• PAN Card
• Passport
• Driving License
• Voter ID Card

Address Proof (Any one)

• Recent Utility Bill (Electricity, Water, Gas) - not older than 3 months
• Bank Account Statement - not older than 3 months
• Rental Agreement
• Property Tax Receipt
• Passport

Income Proof

For Salaried Individuals:

• Last 3 months salary slips
• Last 6 months bank statement showing salary credit
• Form 16 for the last 2 financial years
• Latest IT returns

For Self-Employed Individuals:

• Business registration proof
• Last 2 years IT returns with computation of income
• Last 6 months bank statement
• Profit & Loss Statement and Balance Sheet for the last 2 years
• Business proof (Shop & Establishment Act, GST registration, etc.)

Photographs

• 2 recent passport size photographs

Additional Documents (if applicable)

• Co-applicant documents (if applying with a co-applicant)
• Property documents (if applying for a secured personal loan)
• Existing loan statements (for debt consolidation)

Interest Rates & Fees

Understanding the interest rates and fees associated with personal loans is crucial for making an informed decision. Here's a detailed breakdown:

Interest Rates

Personal loan interest rates typically range from 10.5% to 24% per annum, depending on various factors:

Factors Affecting Interest Rates

• Credit Score: Higher credit score (750+) gets better rates
• Income Level: Higher income may qualify for lower rates
• Employer Category: Working with reputed companies may get preferential rates
• Loan Amount: Higher amounts may have different rate structures
• Tenure: Longer tenures may have slightly higher rates
• Relationship with Bank: Existing customers may get better rates

Fees and Charges

• Processing Fee: 0.5% to 3% of loan amount (one-time)
• Prepayment Charges: 2% to 5% of outstanding amount (varies by lender)
• Late Payment Charges: 1.5% to 2% per month on overdue amount
• Cheque Bounce Charges: ₹500 to ₹750 per instance
• Documentation Charges: ₹500 to ₹1,500 (one-time)
• Foreclosure Charges: 2% to 5% of outstanding amount

Application Process

Applying for a personal loan with Finvare is a simple and straightforward process. Follow these steps to get your loan approved quickly:

Step 1: Check Eligibility

Before applying, check if you meet the eligibility criteria mentioned above. You can use our online eligibility calculator to get an instant assessment.

Step 2: Gather Documents

Collect all the necessary documents as listed in the documents section. Having them ready will speed up the process.

Step 3: Fill Application Form

Fill out our online application form with accurate personal, professional, and financial details. Ensure all information is correct to avoid delays.

Step 4: Document Submission

Upload the required documents through our secure portal. You can also submit physical documents at our nearest branch.

Step 5: Verification

Our team will verify your application and documents. This typically takes 24-48 hours. We may contact you for additional information if needed.

Step 6: Approval

Once verified, you'll receive an in-principle approval with loan details including amount, interest rate, and tenure.

Step 7: Agreement Signing

Review and sign the loan agreement digitally. Make sure to read all terms and conditions carefully.

Step 8: Disbursal

After agreement signing, the loan amount will be credited to your bank account within 24-48 hours.

Tips for Quick Approval

Want to get your personal loan approved quickly? Follow these tips to increase your chances of fast approval:

1. Maintain a Good Credit Score

Ensure your CIBIL score is above 750. Pay all your bills and EMIs on time, maintain a healthy credit utilization ratio (below 30%), and avoid multiple loan applications in a short period.

2. Provide Complete Documentation

Submit all required documents in the prescribed format. Incomplete or incorrect documentation is the most common reason for delays in loan processing.

3. Apply for the Right Amount

Apply for an amount that you can comfortably repay. As a general rule, your total EMIs should not exceed 40-50% of your monthly income.

4. Choose the Right Tenure

While longer tenures mean lower EMIs, they also result in higher total interest paid. Choose a tenure that balances your monthly payment comfort with overall interest cost.

5. Avoid Multiple Applications

Don't apply for multiple loans simultaneously. Each application results in a hard inquiry on your credit report, which can lower your credit score.

6. Have a Stable Employment History

Lenders prefer applicants with stable employment. If you've recently changed jobs, ensure you have at least 6 months of stable employment with your current employer.

7. Consider a Co-applicant

If your income or credit score is not strong enough, consider applying with a co-applicant (spouse or family member) who has a good credit profile.

8. Be Truthful in Your Application

Provide accurate information in your application. Any discrepancies found during verification can lead to rejection or delays.

Frequently Asked Questions

What is the minimum and maximum loan amount I can get?

At Finvare, you can avail personal loans from ₹50,000 to ₹50 lakhs, depending on your eligibility, income, and repayment capacity.

How long does it take to get the loan amount?

Once your loan is approved and agreement is signed, the amount is typically credited to your account within 24-48 hours. In many cases, we've been able to disburse loans on the same day of approval.

Can I prepay my personal loan?

Yes, you can prepay your personal loan after a minimum period of 6 months. Prepayment charges may apply as per the loan agreement. We offer flexible prepayment options with minimal charges.

What happens if I miss an EMI payment?

Missing an EMI payment can result in late payment charges and negatively impact your credit score. If you anticipate difficulty in making a payment, contact us immediately to explore alternative arrangements.

Can I get a personal loan if I have a low credit score?

While a good credit score (650+) is preferred, we consider applications with lower scores on a case-by-case basis. Factors like stable income, employment history, and existing relationship with us are also considered.

Is there any processing fee for personal loans?

Yes, we charge a processing fee of 0.5% to 2% of the loan amount, depending on your profile and loan amount. This fee is deducted from the loan amount before disbursal.

Can I apply for a joint personal loan?

Yes, you can apply for a joint personal loan with your spouse or immediate family member. This can increase your eligibility and help you get better terms.

What is the difference between fixed and floating interest rates?

Fixed interest rates remain constant throughout the loan tenure, while floating rates can change based on market conditions. Personal loans typically come with fixed interest rates.