What is a Personal Loan?
A personal loan is an unsecured loan offered by banks, NBFCs and digital lenders to individuals based on their income, credit profile and repayment capacity. Since these loans are typically unsecured, you don’t need to pledge collateral. Personal loans are flexible — the funds can be used for almost any lawful purpose, from emergencies to life events.
Why Personal Loans Are Extremely Popular
Personal loans have seen rapid adoption due to several trends:
Digital-first lending: Instant online applications, eKYC and video verification make borrowing fast and convenient.
Faster disbursals: Many lenders now offer pre-approved or instant disbursal — sometimes within hours.
Competitive pricing: Banks and fintech platforms compete aggressively, offering attractive rates and offers.
Relaxed eligibility: Lenders have broadened criteria, using alternate data (UPI history, utility payments) to approve more borrowers.
High utility: Urban and semi-urban borrowers use personal loans for medical emergencies, home renovation, weddings, education, travel, debt consolidation, business needs and more.
Key Features
Loan amount: Typically from ₹1 lakh up to ₹60 lakh (depends on lender & profile).
Tenure: 12 to 84 months (short to medium term).
Interest rates: Vary by lender and risk profile — roughly from ~10% to ~32% p.a. (indicative).
Processing fee: One-time fee around 1% – 4% (varies).
Unsecured: No collateral or guarantor required in most cases.
Paperless processing: eKYC, e-sign and e-mandate widely accepted.
Pre-approved offers: Existing customers may get instant pre-approved loans.
Top-up facility: Additional borrowing on an existing loan, subject to eligibility.
Prepayment & foreclosure: Many lenders allow part-prepayment or full foreclosure after 6–12 EMIs (charges vary).
Typical Interest Rate & Product Snapshot (Indicative)
Note: These are sample ranges to help users compare; actual offers vary by lender, credit score and city.
Lowest rates (select banks/NBFCs): ~9.99% – 11.5% p.a.
Average marketplace rates: ~11% – 18% p.a.
Higher risk / small ticket digital lenders: ~16% – 32% p.a.
(Always compare actual lender offers and total cost of borrowing — interest + fees.)
Who Is Eligible? (Salaried vs. Self-Employed)
Salaried Applicants
Resident Indian
Typical age: 21 – 60 years
Minimum monthly income: ~₹15,000–₹25,000 (varies)
Work experience: at least 6 months with current employer, 1–2 years overall
Good credit history (higher score improves offers)
Self-Employed Applicants
Resident Indian business owners / professionals
Typical age: 25 – 65 years
Minimum annual income: ~₹2 lakh – ₹5 lakh (varies)
Business vintage: usually 2–3 years or more
ITR, GST or business documents required
Many lenders also offer attractive schemes for government employees, women borrowers and customers with salary accounts or strong banking relationships.
Documents Required
Identity Proof: Aadhaar / PAN / Passport / Driving Licence / Voter ID
Address Proof: Utility bill / Aadhaar / Passport / Rent agreement
Income Proof (Salaried): Latest 3–6 months’ salary slips, bank statements, Form 16 (if applicable)
Income Proof (Self-Employed): ITR for last 2–3 years, audited accounts, business registration/GST
Bank Statements: Last 3–6 months
Photograph: Passport-size (if requested)
Employment Proof: Offer letter, employer details or business documents
Many lenders now support video KYC and instant bank statement verification to speed approval.
Pros & Cons — Is a Personal Loan Right for You?
Pros
Instant funds for urgent needs
No collateral required
Fixed EMI helps budgeting
Paperless end-to-end processing available
Flexible end-use for legal purposes
Timely repayment improves credit history
Cons
Higher interest than secured loans (home/gold loans)
Multiple loans can lead to over-leverage and credit stress
Late payments hurt your credit score and invite penalties
Processing fees and foreclosure charges may apply
Personal Loan vs Gold Loan vs Credit Card Loan (Quick Compare)
| Feature | Personal Loan | Gold Loan | Credit Card (Cash/Limit) |
|---|---|---|---|
| Security | Unsecured | Secured (gold) | Unsecured |
| Approval time | Hours–1 day | Minutes–hours | Instant (cardholders) |
| Interest (typical) | ~9.99% – 25% | ~7.5% – 18% | ~16% – 36% (revolving) |
| Max Amount | Up to ₹50–75 L (profile) | Value of pledged gold | Card limit |
| Tenure | 6–84 months | Up to 36 months | Revolving / EMIs |
| Ideal for | Medium/large expenses, no collateral | Short-term, lower rate if gold available | Very short-term urgent needs |
How to Apply Online — Step-by-Step (2025 Digital Flow)
Check eligibility quickly on Bharat Finserv or lender platform (enter age, income, city, CIBIL).
Compare offers from multiple banks & NBFCs — rates, fees, tenure.
Select lender & product that fits monthly budget and total cost.
Complete online application — upload Aadhaar, PAN, bank statements, salary slips or ITR.
eKYC & verification — video KYC, bank OTP, or instant bank statement fetch.
Loan sanction — receive a digital sanction letter.
Disbursal — funds credited to your bank account (often within hours).
Repay EMIs via ECS/eNACH/auto-debit or manual transfer.
Bharat Finserv guides you through the entire process and helps compare offers from multiple lenders.
Prepayment, Foreclosure & Top-Up — What You Should Know
Part-prepayment: Many lenders allow part payments after 6–12 EMIs. Some charge a nominal fee; others allow free part payments.
Full foreclosure: Closing the loan early may attract a foreclosure fee (0–4%, varies by lender and timing).
Top-up loans: If your repayment track record is good, many lenders provide a top-up on existing loans with minimal documentation.
Tip: Read prepayment & foreclosure clauses before finalising the loan.
Common Uses of Personal Loans in 2025
Medical emergencies and treatment costs
Debt consolidation (credit cards, high-interest loans)
Home renovation and furnishing
Weddings and family events
Higher education or professional courses
Travel & large purchases (electronics, vehicles upgrade)
Seed funding for small/unformal business needs
Many fintech lenders also support niche uses such as fertility treatment, cosmetic procedures and specialised healthcare.
How to Get a Lower Interest Rate (Practical Tips)
Maintain a strong credit score (750+) — timely payments and low credit utilisation.
Limit hard credit enquires — apply selectively.
Keep DTI (debt-to-income) below ~45% — lenders prefer lower leverage.
Opt for shorter tenures if EMIs are affordable (lower total interest).
Use salary-account relationships — banks often offer better rates to their account holders.
Compare multiple offers — negotiate or use pre-approved options.
Provide accurate documents to speed approval and avoid higher priced offers.
Leverage co-applicant or guarantor (if available) to improve eligibility/rate.
Women borrowers, government employees and select professionals often receive special concessions from some lenders.
Risks to Watch For
Avoid applying to multiple lenders in short succession — multiple hard enquiries lower score.
Never hide liabilities — full disclosure prevents future claim/processing issues.
Beware of predatory lenders and opaque fees — always check the APR (all-in cost).
Why Choose Bharat Finserv?
Compare → Choose → Apply: One place to compare hundreds of offers and pick the best fit.
Transparent advice: Clear breakdown of interest, fees, EMI and total cost.
End-to-end support: From document upload to disbursal and post-sanction queries.
Fast approvals: We prioritise lenders with quick digital disbursals.
Safe & secure processing: eKYC and encrypted document upload.
Ready to Apply?
📞 Call Bharat Finserv or
📱 Chat on WhatsApp (8299533212) — we’ll check pre-approval offers and help you apply in minutes.