Types of Personal Loans

• Secured Personal Loans - It needs the collateral security by the borrower in exchange of the loan amount. Loan Amount depends on the value of the collateral provided by the borrower.

• Unsecured Personal Loans - It do not require any collateral. Loan is sanctioned on the basis of income, debt-income ratio and credit score of the borrower.

• Payday Loans - These are the short term loans to meet the unexpected expenses. These loans bears high rate of interest.

• Debt Consolidation Loans - This loan is used to merge the various existing loans into one. This is usually done to simplify the repayment to single debt and comparatively lower interest rate.

• Buy now pay later Loans - This is the loan facility especially to make purchases on EMIs.

Eligibility Criteria

It may depend upon the lender, but some common criterias are mentioned below 

• Age - Borrow must be atleast 18 years of age.

• Income - Amount of loan you can borrow highly depends on your net income.

• Credit Score - Higher the credit score higer the chances of approval.

• Employment History - Stable employement hisotry increases the chances of loan approvals.

• Debt-income Ratio - It is a ratio between the Debt on the borrow and the income of the borrower. Higher the ratio less chances of loan approval.

• Citizenship - You should be citizen or permanent resident of the country in which you are applying for the loan.

• Repayment Capacity

Documents Required:

• Identification proof like Passport/ Driving License/Any Other Government-issued document.

• Age Proof like Birth Certificate/Passport/ Any Other Government-issued document.

• Address Proof like Utility Bills/Rent Agreement/Any Other Government-issued document.

• PAN Card

• Income proof like Income Tax Return/Bank Statements/Slary Slips.

• Employemnt Proof

• Loan Application Form

Benefits of Personal Loans

• Loan amount can be from RS. 1000 to Rs. 20 Lakhs.

• Simple eligibilty criteria.

• Easy to apply.

• No need to provide any collateral.

• Quick Approval and Disbursement.

• You can use the funds for any of the purpose you wish.

• Timely repayments helps to increase the credit score.

Disadvantages of Personal Loan

• High Interest Rates.

• Limited Loan Amount.

• High Processing Fee and other charges.

• Failure to repay can effect your credit score badly.