Personal Loan FAQs

The amount of personal loan you can obtain depends on factors like your monthly income, credit score, existing financial obligations, and employment stability. Generally, lenders require a minimum monthly income, which varies based on location, often ranging from ₹15,000 to ₹25,000. A good credit score is usually 700 or above. It can increase the loan amount you’re eligible for, as it reflects your financial reliability. Lenders also consider your current financial commitments to ensure you can manage the additional repayments. A stable employment history further strengthens your eligibility. Based on these factors, banks and lenders determine the maximum loan amount. However, the actual amount you qualify for will vary with your financial profile.

To close a personal loan, first, you must check with your lender for the outstanding balance, including any interest and applicable charges. Then, request a No Dues Certificate or foreclosure statement, which details the amount required to close the loan. Ensure you have sufficient funds before proceeding. Visit the bank or lender’s branch and pay the balance in full. You can pay through online transfer or use other approved payment methods. Once you’ve paid, request a written confirmation that the loan is closed, and ask for the No Dues Certificate as proof that you have no further obligations. Also, ensure that the lender updates your loan closure in your credit report, as it positively impacts your credit score. Keep all necessary documents as proof of your loan’s successful closure for future reference.

Transferring a personal loan directly to someone else is typically not possible. Personal loans are issued based on the borrower’s financial reliability, income, and financial history, making them not transferable. Some lenders, however, may let a co-signer or guarantor take on responsibility if the principal borrower defaults. The co-signer or guarantor assumes responsibility for the remaining loan debt in such circumstances.

A personal loan is usually unsecured, meaning you don’t require collateral, such as property or a car, to obtain it. This differentiates it from secured loans, where the borrower must pledge an asset as security. Because no collateral is involved, lenders rely on your credit score, income, and employment history to assess your eligibility and the loan terms. This lack of security often leads to higher personal loan interest rates than secured ones. This type of loan is readily available, but approval depends heavily on your financial profile.

The maximum duration for a personal loan is generally between 5 to 7 years, though a few lenders may extend it to 10 years under certain conditions. The loan tenure you choose affects your monthly payments and the overall interest you will pay. A longer tenure can reduce monthly instalments, making it easier to manage, but it also increases the total interest paid over the loan period. Consulting with your lender helps clarify your options and find a balance between affordable repayments and interest costs. Many banks and financial institutions offer tools to calculate different repayment schedules based on tenure.