Unsecured loans (called personal loans) are advanced on the basis of the borrower's credit-history and ability to repay the loan from personal income. Repayment is usually through fixed amount installments over a fixed term. Also called consumer loan. A personal loan is a type of unsecured loan and helps to meet your current financial needs. You don't usually need to pledge any security or collateral while availing a personal loan and your lender provides you with the flexibility to use the funds as per your need.
Personal Loan Eligibility Criteria:
- Personal loans eligibility criteria can be fairly stringent, considering banks need to mitigate their risk. Most people with a regular source of income such as salaried individuals or self-employed individuals can avail a personal loan. Banks consider salaried individuals, self-employed professionals and self-employed business people.
- Personal Loan Amount An individual can borrow as much as they can repay. This in banking terms would mean a personal loan that has an EMI that does not exceed 40% of your monthly take home income, where the EMIs for existing loans are also deducted.