Everyone needs a little financial help now and then. Personal Loans are exactly for that. Generally almost all banks and even some NBFCs (like TATA Capital, Indiabulls and Capital First) offer personal loans. In India, every month, more than 1 lakh borrowers take personal loans from banks and NBFCs. The interest rates on personal loans start from 10.49% for Category A borrowers (CAT A), meaning those borrowers who are working in top-end listed companies like Bharti Airtel, Infosys, Reliance, HUL, ITC, etc. After that comes CAT B, CAT C, CAT D, CAT E and other categories. It is most difficult (if not impossible) for those people to get personal loans who choose to work in startups and NGOs. The main personal purposes why people take a personal loan vary from:

personal loan


✓ When you are facing a cash crisis and need quick liquidity
✓ When there is a financial emergency like a medial situation in your family
✓ When you need money for a marriage or any other personal event in life
✓ For investing in the business of family member or startup
✓ Or for any other personal requirements

Many people just blindly apply for a personal loan with their nearest home branch where they have their savings or current account. Follow these 5 steps to apply for a personal loan the right way:

1. ENTER YOUR DETAILS CORRECTLY – Take significant time to enter your details on a personal loan online portal. Ensure that you enter accurate details and information.

2. COMPARE PERSONAL LOAN OFFERS – Most online portals will give you loan offers online when you submit your information. They will also call you and offer loan offers from certain banks. Don’t make any decision now. Ask them relevant questions like:

a. According to your profile and information submitted, which banks would be ready to fund you?
b. How much personal loan would each bank give based on profile?
c. What is the interest rate?
d. How much time would it take to approve the loan?
e. Is co-applicant mandatory? And why mandatory?
f. Is insurance compulsory on personal loan?
g. Can insurance on personal loan be waived off? (Push for waiver since it is not required and does not help you in any way)

3. ANALYSE & NEGOTIATE – Understand the personal loan offers from different banks and write down what they are telling you. If possible, then record the conversations so that you don’t miss out anything. And remember to always Negotiate with banks and bankers.

4. KEEP DOCUMENTS READY – Even before you start the personal loan process,s keep these basic documents ready:

a. CIBIL SCORE Report – Keep this ready if you have CIBIL score. CIBIL score helps you know your financial standing. If you have CIBIL score more than 650, then only majority of banks will give you loan. If CIBIL score is 750+, then you negotiate hard with banks.
b. PAN Card (compulsory)
c. Aadhaar Card (compulsory)
d. Proof of Identity (any one out of Voter Card, Passport, Driving License, etc)
e. Address Proof (any one out of electricity bill, gas bill, water bill, broadband bill, rent agreement)
f. Last 3 months Salary slips
g. Last 6 months Bank Statement
h. Job Continuity proof of 1 year
i. Other documents that may be required specific to bank or NBFC



Many Banks like HDFC Bank offer 100% online personal loan application process without any documentation if you are an existing HDFC Bank customer. Once you login to your HDFC Bank account, go to “OFFERS” and click and you can see if there are any personal loan offers for you. If offers are there, then your life becomes easy and you can take the offer. In HDFC Bank offer, if the interest rate is higher than 10.49%, then you can follow the 5 steps listed above and apply for a personal loan, as then you can negotiate a cheaper rate of interest. We can help you in getting the best deal on personal loan.

For More info Visit: FinanceBazaar.com

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