A personal loan is money that we can borrow for a variety of purposes. It does not require collateral or security and is usually available with minimal paperwork. Its funds can be used for any legitimate financial need. Clearly it’s a critical instrument that serves us well in everything from consolidating debt, paying for home improvements or even planning our dream wedding or vacation.
Banks, credit unions and online lenders all provide personal loans. But you must repay it in accordance with the terms agreed upon with the financial institution just like any other loan. Typically, the repayment duration can range from a few months to a few years in simple equated monthly instalments or EMIs. And all these factors do beg the question – how much should we and can we borrow with a personal loan?
First, let’s understand the variety of needs personal loans serve.
Types Of Personal Loans
You can get an urgent loan for various purposes from a number of lenders. Based upon the utilisation there are various types of the personal loan like:
– Wedding Loan
Weddings are important and expensive events in India. Most people want their wedding day to be memorable and will go to great lengths to make that happen. Financial institutions can provide you with an urgent loan to assist you in making your special day memorable. Loans can be obtained by the prospective bride, groom or any family member.
– Travel Loan
A loan that helps you to meet all the expenses related to vacation and pay the amount later. You can travel around the world and pay your bills later with travel loans. Holiday loans frequently include travel insurance as an added benefit.
– Home Renovation Loan
People frequently do not renovate their homes because the costs are prohibitively expensive. Home renovation loans assist you in covering your repair costs while increasing the economic value of your home in the real estate market.
– Pension Loan
Pension loans are only available to retired people so the usual eligibility criteria do not apply in this special scheme. Some banks offer 7 to 10 times the amount of pension the pensioner received the month before submitting the loan application under this scheme.
– Education Loan
Personal loans for educational purposes are available from a variety of lenders. You can use the education loan to pay for anything from your child’s tuition to any other academic requirement.
– Consumer Durable Loan
A consumer durable loan is a type of urgent loan provided by lenders for people who want to buy goods or any electric device.
How much can you borrow with a personal loan?
While you think about getting a personal loan the first question that comes to your mind is – how much loan can I get? Other than the key question of maximum personal loan it is also a matter of clearing all the required eligibility criteria.
The eligibility criteria differ for salaried as well as self-employed individuals. Here’s what should be kept in mind with the instant loan portal EarlySalary as an example:
- The applicant must be a salary employee of a private or a public enterprise and a resident of India.
- The applicant’s age must range between 21 to 60 years.
- The applicant’s income should be at least Rs. 18,000 in metro cities like Mumbai and Delhi and Rs. 15,000 in other parts of India.
Some lenders allow the borrower to be a self-employed person. A self-employed person can avail of a loan calculated on the profit after tax based on the industry and should be in business for a minimum of 5 years.
Some lenders may need the applicant to have a minimum of 1-year experience and 6 months of work experience in the present company in order to be eligible for an urgent loan.
If you meet this loan eligibility criteria, you can get a personal loan of up to ₹5 lacs right from the comfort of your home on platforms like EarlySalary. Conventional banks and lenders scrutinise a variety of other factors in order to determine your creditworthiness. However, lenders like EarlySalary allow you to get an urgent loan if you meet their primary eligibility criteria.
Lenders are constantly providing the consumers with hassle-free lending processes so that their financial needs are addressed in due time. To get a personal loan all you need today is a smartphone and an active internet connection.