Personal Loan   Personal loan And As It Works A personal loan is a type of unsecured loan that customers can make use of from the banks or financial institutions according to fulfillment of their financial needs. The customers can borrow loans if they need credits. Once customers submit applications for personal loans to the lenders, the lender verifies and approves them. After that, the loan amounts are disbursed into the customers' bank accounts. Once they receive the loan amounts, respective customers will require making repayments to the lender through EMIs within the loan repayment tenure. Generally, the interest rate for repayment of a personal loan becomes 7.90% per annum onwards. The customers can get a maximum of up to Rs 40 lakhs as personal loans. The period for paying back the amount generally becomes up to seven years and loan applicants have also to pay processing fees which are up to 6% of the loan amounts plus GST.   Top Personal Loan Schemes and Offers Different banks and financial institutions provide different types of personal loan schemes and offer for the customers. Here is the list of some top personal loan schemes and offers. Citi Bank personal loan: It is called best for a low-interest rate. Citi Bank offers interest rates that range from 9.99% per annum. to 16.49% per annum. This bank provides maximum loans up to Rs.30 lakh and the tenure of refund becomes up to 5 years. HDFC personal loan: This loan is generally termed as perfect for self-employed professionals. Its' interest rates (rack interest) vary between 10.5% per annum and 21.00% per annum. The customers borrowing personal loans from this bank will get maximum time for repayment for up to five years. But the loan applicants can get maximum loans up to Rs.40 lakh. Kotak Mahindra Personal Loan: The loan applicants who wish to get a quick turnaround time can choose this institution for their desired personal loans. Interest rates at this financial institution begin from 10.25% per annum while one can get up to maximum loans up to Rs.25 lakh and the borrowers can get up to five years for repayments. Tata Capital Personal Loan: The loan applicants can get the advantages of getting personal loans at flexible interest rates. The interest rates at this institution start at 10.99% p.a. The loan applicants can get tenure of up to six years and the maximum limit of getting loans at Tata Capital is up to Rs.35 lakh. Standard-Chartered Personal Loan: This personal loan is called most suitable for the short-term requirement. This bank offers interest rates that begin from 11.49% per annum. The applicants can get a period of up to 5 years for paying back the loan amounts and they can get maximum loan amounts of up to Rs.30 lakh. IDFC First Personal Loan: The experts say the personal loan offered by IDFC is ideal for top-up purposes. The applicants can get an interest rate that starts from 10.49% per annum. This bank offers maximum loans of up to Rs.40 lakh and the time of repayment is up to five years. Fullerton India Personal Loan: This personal loan is called perfect for quick approval. The customers can get loans of up to Rs.25 lakh and their time for refund will be up to only 60 months. However, interest rates offered by this financial institution commence from 11.99% per annum. SBI Personal Loan: The customers of different income categories can select SBI to take personal loans. Interest rates offered by SBI are not high as it starts from 9.60% per annum. The applicants can get loans up to Rs.20 lakh and they will get a maximum of seven years' tenure to make repayments. PNB Personal Loan: PNB personal offers affordable interest rates that begin from 7.90% per annum. The personal loan amount this bank offers has a maximum limit of Rs 20 lakh and the loan applicants can get a maximum time of 72 months for repayment.   Eligibility Criteria for Personal Loan The salaried persons need to be between 21 and 60 years old and self-employed persons must be between 22 and 55 years old. For the salaried persons, the net monthly income should be Rs 15000 while the self-employed persons must have Rs 25000 net monthly income. The salaried and self-employed, both types of applicants should have above 750 CIBIL scores to get personal loans. Salaried and self-employed, both types of applicants can receive a minimum loan amount of Rs 50000. In case of maximum limit in personal loans, salaried persons can get Rs 25 lakh while the self-employed persons can get Rs 50 lakh.   Modes of Loan Payment or Repayment There is a variety of repayment methods that lenders offer to their borrowers. These modes generally differ from lender to lender. Still, some of the most common methods of repayment have been mentioned here: Electronic Clearance System (ECS): The ECS or Electronic Clearance System is one of the most commonly used repayment modes. It is an electronic mode through which funds are transferred from one bank to another. Post-Dated Cheques (PDCs): Post-dated Cheques are cheques that are issued by borrowers for future dates. The lenders will use these cheques on the mentioned dates to deposit or cash in the amounts mentioned on them. National Automated Clearing House: The National Payment Corporation of India (NPCI) has developed a program called NACH for all the banks and financial institutions. The NACH permits the processing of transactions in real-time. This method can be used for the customers' loan repayments. Debit mandate or standing instruction: The customers can give instructions to their respective banks to pay off a particular amount of money to another bank or bank account at a regular interval. This is known as standing instruction or debit mandate. The bank of respective customers will be paying off the stipulated amounts towards the repayments of their loans regularly through this system.   Different Types of Personal Loans in IndiaThere are a few lenders who provide different loan products based on the purpose which is mentioned by the borrowers in the loan applications. Personal Loan for Wedding: It is a loan that is offered particularly to fulfill the expenses of a wedding. So it is called a wedding loan. Personal Loan for Home Renovation: It is a home renovation loan that helps customers to pay for repairs or renovations of their homes. Personal Loan for Vacations: A holiday loan has been specially designed for vacations. The borrowers can avail of holiday loans and pay off the expenses later through easy EMI payments. Personal Loan for Pensioners: Pensioners are offered these personal loans especially. That is why it is known as a pension loan. Personal Loans for Festivals: Certain lenders offer personal loans exclusively for festivals. If customers are in search of loans to make arrangements for festivals they can apply for such festival loans. Personal Loan for Medical Emergency: Medical loans are loans taken out for financing medical care.   The key features of Getting Personal Loans: Credit Clean-up: One of the key factors that are considered by the lenders is the respective customers' credit score. Getting a personal loan is easier with a high credit score. If the score is low, then respective customers have to check their reports to find out whether there are any errors. Sometimes, simple errors could be the causes of adverse effects on their scores, and if respective customers find any of these, they must report them to CIBIL. Rebalancing income and debts: Lenders ask for income proof when customers apply for personal loans in order to ascertain their debt-to-income ratio. The customers have to consider the sale of liquid assets like stocks or earning more through a part-time job to increase their annual income. Accomplishing that will increase their debt-to-income ratios and increase their chances of getting personal loans. Consider Co-signers/Guarantors: If respective customers are finding it hard to receive personal loans on their concurrences then they can apply for one by adding co-signers or guarantors. The person customers choose as guarantors must have good credit scores. Their main aim is to guarantee that respective customers will repay the loans. However, they will also be liable to repay the loan themselves if the respective customers fail to do so. Picking an individual with a credit score over 750 will considerably increase their chances of getting personal loans. Limit the Borrowing: It can be risky to ask for more money than financial requirements. That is why applicants should apply only for the specific amounts they need exactly. Choosing the Right Lender: Every lender has its requirements when it comes to credit scores and income. While looking for personal loans, applicants should pick such lenders whose eligibility criteria they can meet and apply accordingly. The problem with applying with multiple lenders is that each of them will check respective applicants' credit scores and each time their full credit reports are pulled out the credit score will drops marginally.