Term condensation, in the context of personal loans, refers to the process of shortening the repayment period of a loan while potentially increasing the monthly payments. This approach allows borrowers to pay off their loans faster and potentially save on interest over the life of the loan.
As of 2023, personal loan interest rates typically range from about 11% to 36% APR. Here's a general breakdown based on credit scores:
Personal loan limits can vary widely depending on the lender, your creditworthiness, income, and other factors. While most personal loans range from ₹10,000 to ₹5,00,000, some lenders offer personal loans with much higher limits for qualified borrowers.
Typically, personal loan terms range from 1 to 7 years, with some lenders offering terms up to 12 years for larger loan amounts or specific purposes like home improvements.
Essential Requirements Checklist
Lenders require that the minimum age be 21 years. Always carry a valid government-issued ID with you to verify your age.
Typically, a government-issued photo ID such as a Aadhaar Card, driver's license, passport, or state ID card is required. Some lenders may ask for additional identification documents.
Recent pay slip (salary slip), tax returns, or bank statements showing regular deposits. For self-employed individuals, a profit and loss statement may be required.
Most lenders prefer borrowers with stable employment. Be prepared to provide your employer's contact information for verification. Some lenders may accept alternative income sources for unemployed individuals.
Recent utility bills, lease agreement, mortgage statement, or any official document showing your current address. This helps verify your residency and stability.
While not always required to apply, your credit score significantly impacts loan approval and terms. Most lenders prefer a score of 600 or higher, but requirements vary.
Lenders assess your ability to repay by looking at your debt-to-income ratio. Prepare a list of your monthly debt obligations and income sources.
A checking or savings account is often required for depositing the loan and setting up repayments. Have your account and routing numbers ready.
Some lenders may ask about the intended use of the loan funds. Be prepared to explain your loan purpose clearly and honestly.
