Fulfill all your financial needs with our hassle free Personal Loans, which are designed to help you live life at the fullest

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Features

Personal Loan Features & Benefits

A personal loan is an unsecured loan, which can be used for many purposes. You can effectively turn your dream into reality by opting for our personal loan. Now you can take that vacation that has been delayed for long, or renovate your home, or even buy that dream car. With IndusInd Bank’s personal loan, you can achieve all your goals. With the availability of the personal loan EMI calculator at your disposal, you can easily calculate monthly instalments you need to pay even before you apply for a loan.

We, at IndusInd Bank, understand that there can be many reasons for applying for a personal loan. To fulfil these various needs, we have tailor-made personal loans in various categories.

Fulfil all your financial needs with our hassle free online Personal Loan, which are designed to help you live life at the fullest.

  • Obtain a personal loan easily with simple documentation, quick processing and speedy disbursal.
  • Choose a loan tenure as per your convenience ranging from 1 to 5 years
  • Enjoy the convenience of doorstep service
  • Get the best in class personal loan interest rates
  • You need not worry about collaterals or guarantors
  • Get rid of your high interest debt through 'Balance Transfer Option'
  • Choose a convenient repayment option from, IndusInd Bank a/c debit or ECS from your other bank

To view the list of cities where you can avail our Personal Loan Click here

To check your online personal loan eligibility click here

In addition to the above, we understand that the reasons for obtaining a personal loan can be numerous and varied. To cater to your specific requirements, IndusInd Bank offers you tailor-made personal loans in multiple categories. These include:

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Eligibility

Personal Loan Eligibility Criteria

Eligibility for Salaried Employees:

This category includes salaried doctors, salaried Chartered Accountants, employees of select Public and Private Limited companies, Government Sector employees including Public Sector Undertakings and Central, State and Local bodies.

  • Minimum age at the time of application should be 21 years
  • Maximum age at personal loan maturity should be 60 years or retirement age whichever is earlier
  • Minimum net monthly income should be Rs.25000
  • Should have completed minimum 2 years in employment and minimum 1 year in the current organisation
  • Should have completed minimum 1 year of stay at the current residence, if rented
Eligibility for Self-employed Professionals:

This category includes self-employed doctors (MBBS and higher degree), Architects, Chartered Accountants, Company Secretaries, Engineers and MBA consultants.

  • Minimum age at the time of application should be 25 years
  • Maximum age at loan maturity should be 65 years
  • Minimum annual net income post tax should be Rs.4.8 lakh
  • Should have 4 years of post qualification experience
Eligibility for Self-employed Individuals:

This category includes self-employed sole proprietors, directors and partners in the business of manufacturing, trading or services

  • Minimum age at the time of application should be 25 years
  • Maximum age at loan maturity should be 65 years
  • Minimum annual net income post tax should be Rs.4.8 lakh
  • Should have 5 years of post qualification experience

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Documentation

Documents required for Personal Loan:

A personal loan is an unsecured loan, which is made available to fulfil your financial and/or personal needs. We, at IndusInd Bank, offer you easy, convenient and quick personal loans, which do not require any guarantor or collateral. With a simple application process, you can avail funds in no time. All that you are required to do is submit the required documents and establish your eligibility to avail the funds.

When you apply for a personal loan with us, you are required to submit a signed application form, along with your KYC documents. Additionally, the application requires you to establish your eligibility, income, age, financial stability, etc.

While certain basic documents remain the same, some may vary as per the nature of an applicant’s work profile.

The basic documents that every applicant needs to provide are:

  • Identity Proof (Aadhaar Card, Voter ID, Driving License, Passport, etc.)
  • Address Proof (Valid ID proof with permanent address)
  • Income Proof (Bank statement from the last 3 months)

You can apply for a Personal Loan online. Click on the Apply Now button on this page, fill in your details and submit it. We will get back to you for further process. Alternately, you can visit a branch and submit the Loan application form.

Documents for Salaried Employees:
  • Proof of identity: Passport / driving license / voters ID / PAN card /card issued by UIDAI containing the details of name, photograph, address and Aadhaar number
  • Proof of residence: Leave and License Agreement/ration card /utility bill (not more than 3 months old) / valid passport - provided the passport address is present address mentioned in application form
  • Proof of Income: Latest 3 months salary slip / salary certificate and latest Form 16
  • Bank Statements: Latest 3 months bank statement (where salary is credited)
Documents for Self-employed Professionals:
  • Proof of identity: Passport / driving license / voters ID / PAN card /card issued by UIDAI containing the details of name, photograph, address and Aadhaar number
  • Proof of residence: Leave and License Agreement / ration card / utility bill (not more than 3 months old) / trade license / establishment / sales tax certificate / valid Passport - provided the passport address is present address mentioned in application form
  • Business (Current Account) Bank Statements (latest 6 months bank statement/passbook
  • Proof of qualification: Highest Professional Degree
  • Latest 2 years ITR along with computation of income, B/S, P&L a/c with all schedules certified by a CA
  • Profession continuity proof
Documents for Self-employed Individuals:
  • Proof of Identity: Passport / driving license / voters ID / PAN card /card issued by UIDAI containing the details of name, photograph, address and Aadhaar number
  • Proof of residence: Leave and License Agreement / ration card / utility bill (not more than 3 months old) / Trade License/establishment/sales tax certificate/valid passport - provided the passport address is present address mentioned in application form
  • Business (Current Account) bank statements (latest 6 months bank statement / passbook)
  • Latest 2 years ITR along with computation of income, B/S, P&L a/c with all schedules certified by a CA
  • Business continuity proof: Trade license / establishment/sales tax certificate)
  • Additional mandatory documents: Sole proprietorship declaration/certified copy of partnership deed /certified copy of MOA, AOA and Board resolution. In case of income derived from a partnership firm, latest 2 years partnership firm's B/S, P&L a/c with all schedules certified by a CA

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FAQs

Personal loan FAQs :

What is the minimum and maximum online personal loan amount?

You can avail of personal loans that are ranging from Rs.50,000 to 15,00,000 depending on your eligibility, income, nature of job and repayment capacity.

What are the loan tenure options?

You can repay your loan over a period of 12 to 60 months

How long will it take for my Personal Loan to be approved?

Your personal loan will be disbursed within 4-7 working days post receipt of the required documents. All loan approvals are at the sole discretion of the bank.

Are there any additional charges?

A processing fee up to 2.5% of the loan amount and requisite documentation charges is payable same will be deducted from the loan amount at the time of disbursal.

How can I repay my Personal Loan?

You pay the loan in equated monthly installments (EMIs). The loan will be paid through ECS. You can also pay through a standing instruction to debit your IndusInd Bank account with the EMI amount.

What security do I need to provide to obtain this loan?

To obtain the loan, there is absolutely no need to provide any security or collateral.

Can I prepay/foreclose my personal loan?

You can prepay/foreclose the entire loan outstanding anytime after paying 12 installments for Salaried Clients and any time after 6 installments for Self Employed Clients. Prepayment charges as applicable would be levied on the outstanding loan amount.

Is part-prepayment of a Personal Loan allowed?

Part prepayment is not allowed. The personal loan has to either be prepaid in full or serviced for the contracted tenure.

How do I approach IndusInd Bank for a Personal Loan?

You can approach us in any of the following ways:
Call us at our 24 hour Customer Care number: 1860 500 5004 / +91 22 44066666
Write to us at reachus{}indusind.com
SMS "PL" to 5676757
Or you can simply walk into any of our branches, in the select cities where we offer personal loans

Do I need to open an account with IndusInd Bank for availing and / or servicing the loan?

We will encourage you to start a banking relationship with us so that we will be able to offer a host of other value added services which are complimentary to the loan, however opening an account with us is not mandatory.

Do I get special privileges as a IndusInd Bank Customer?

As an IndusInd Bank Customer, you will be offered special interest rates, asked for minimal documentation and your application will be processed on priority. Having an account with us enables us to assess your financial requirements better; and assists us in providing you with services and loan amount commensurate with your payment ability and requirement.

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Interest Rates

Personal Loan Interest Rates & Charges

A personal loan is one of the easiest ways to get financial aid to make sure you do not compromise on the more important things in life. We, at IndusInd Bank, are here to help you in the event of a financial crunch.

Check out our interest rates mentioned below:

A personal loan can come in handy when you are looking to buy a car, planning a dream wedding, or renovating your home. It is also useful for situations that require your urgent attention, such as a medical emergency.

A personal loan can come in handy when you are looking to buy a car, planning a dream wedding, or renovating your home. It is also useful for situations that require your urgent attention, such as a medical emergency.

Thus, a personal loan can be a great tool for managing your finances and at the same time, it can act as an impetus to translate your plans into action.

To apply for a personal loan, one must be at least 21 years old and should be able to provide basic KYC documents. Check more about the eligibility, documents, and features and benefits here:

Personal Loan Interest Rate – Q2 2018-19
Minimum 10.50%
Maximum 30.50%
Mean 16.06%
Personal Loan Annual Percentage Rate (APR )
Minimum 10.50%
Maximum 30.50%

* Applicable Government taxes, levies etc. are over and above Fees & Charges

What is the applicable rate of personal loan?
Interest Rate 11.25% onwards
Personal loan Processing Fees Up to 2.50% of loan amount plus tax
Prepayment Charges Salaried: 4% of the principal outstanding after repayment of 12 EMIs.
Self Employed:
4% of the principal outstanding after repayment of 6 EMIs
Payment Dishonor Charges Rs 450/- plus tax
Personal loan Duplicate Statement Charge Rs 250/- plus taxes per event
Cheque / ECS / SI Swapping Charges Rs 500/- plus taxes per event
Duplicate No Dues Certificate Rs 250/- plus taxes per event
Duplicate Amortization Schedule Charge Rs 250/- plus taxes per event
Loan Re-Booking / Rescheduling Charges Rs 1000/- plus taxes per event
Loan Cancellation Charges Rs 1000/- plus taxes per event
Charges for Photocopy
of Agreement / Documents
Rs 250/- plus taxes per event
Penal Charge Rs 150/- plus taxes, Per EMI delay beyond 5 days
Legal Charges As per Actuals
Stamp Duty As per State Laws
CIBIL Report Rs. 50/- per instance per set + Taxes as applicable

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Reviews

Transparency in personal loan

It is very rare to find transparency among banks. But I consider myself lucky that I have applied for a personal loan at IndusInd Bank after a lot of research and customer reviews. My loan has been sanctioned and now my dream house construction is on its way. Kudos to IndusInd Bank!

Reviewer: K. Murthy, Chennai, Aug 23, 2018

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Quick and easy personal loans

As I hardly had time to visit banks to apply for personal loans, I needed a doorstep service that could ease things. Luckily, I came across IndusInd Bank’s advertisement that promised doorstep services for the application of personal loans. I am really glad that my loan worries are waved off. I am very happy with their quick services.

Reviewer: Sumit Mohapatra, Bhubaneswar, Aug 22, 2018

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Personal loans for high studies

I was unable to fulfil my dream of studying in a prestigious university due to monetary issues. Then i researched and decided to get a personal loan, for my higher studies, from IndusInd Bank. I was really impressed with the way my needs and issues were addressed to. My loan is sanctioned now, and a big thanks to IndusInd Bank

Reviewer: Mihika Katekar, Mumbai, Aug 20, 2018

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Easy personal loans online for medical needs

My brother had to undergo a kidney transplant. We had collected all the money, but we were still short. So, my friend suggested taking a personal loan from IndusInd Bank. Since it was a matter of urgency, I applied for a personal loan online. My loan was quickly sanctioned off and the surgery went through. I am so grateful for the IndusInd Bank for helping my family through this difficult period.

Reviewer: Shremony Dutta, Kolkata, Aug 18, 2018

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Making personal loans easier and simpler

IndusInd Bank made the process of getting a home loan seamless, almost like a child’s task. Easy documentation and the short time in which I was granted the loan left me surprised. I only had to apply for a home loan online. They took care of the rest. Highly efficient team.

Reviewer: Nihar Upadhyay, Ahmedabad, July 02, 2018

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A trustworthy bank

I had some issues in arranging for collateral for my personal loan, but the executives of IndusInd Bank told me not to worry. They checked my documents and I was granted the loan easily. No tension of going to the bank as you can apply for a personal loan online.

Reviewer: Deepesh Sharma, New Delhi, June 29, 2018

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Secured a bright future for my daughter

I was worried when the prospect of sending my daughter abroad for studies came up. It was suggested that I apply for a personal loan online. Simple documentation process and no hidden charges. I could choose a tenure that suited me the best, and I easily got the personal loan. Thank you, IndusInd Bank.

Reviewer: Ashok Kulkarni, Pune, June 27, 2018

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Got married without any worries

When my marriage came up, I made sure that in no way should the expense of marriage fall on my parents. I simply had to apply for a personal loan at IndusInd Bank and all my worries were gone. I was granted a personal loan quickly. Needless to say, my marriage went smoothly.

Reviewer: Kiran Meena, Jodhpur, June 23, 2018

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Customer satisfaction is their priority

My husband was about to undergo a critical surgery. Money was short, and I could not arrange the amount at such a short notice. So, I chose to apply for a personal loan. Thanks to IndusInd Bank, the surgery went smoothly as I was granted the personal loan at the earliest.

Reviewer: Arti Ahuja, Ludhiana, June 21, 2018

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Personal Loan for Education

I wanted to do an MBA for growth in my job. So, I took a personal loan from IndusInd Bank because I have been a customer of that bank for a long time. I can say that I am very happy with the services by IndusInd Bank. There were absolutely no hassles. I definitely recommend!

Reviewer: Raj Saxena, Jaipur, April 15, 2018

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Great Customer Service

I wanted a personal loan personal business. I approached IndusInd Bank and explained my situation. Their executives were very helpful and guided me through the process. I was disbursed with the loan amount in no time and very little documentation!

Reviewer: Kamal Arora, Delhi, April 23, 2018

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Easy Personal Loan

I took a personal loan for my son’s wedding. I thought it would be too much of a hassle, especially with wedding preparations. But I was surprised at how quick and easy it is getting a personal loan at IndusInd Bank. I have now become a regular customer of IndusInd Bank!

Reviewer: Sarita Verma, Chandigarh, April 25, 2018

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Super Quick Personal Loans

I applied for a personal loan at IndusInd Bank for my father’s knee surgery. It was urgent and we were falling short of cash. IndusInd Bank understood my situation and expedited their process. I received the money in very less time. Kudos to IndusInd Bank!

Reviewer: Divyanshi Bhardwaj, Bangalore, April 29, 2018

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Personal Loan for Sister’s Wedding

I had to get my sister married. Although I had saved up for it, it was not enough. IndusInd Bank’s personal loans came to my rescue. The process was like a breeze. The customer care was extremely helpful in understanding my urgency and I got the loan in no time. My sister’s wedding was perfect. Awesome work, IndusInd Bank!

Reviewer: Abhishek Arora, Kanpur, April 09, 2018

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Personal Loan for Balance Transfer is A Boon

Most of my salary was going towards my home and car loans. This didn't leave much money at the end of the month. So I decided to take a personal loan for balance transfer from IndusInd Bank and it has made my life so much smoother. The interest of the personal loan is much lower than my other loans. Great service by IndusInd Bank!

Reviewer: Shefali Arya, Jaipur, April 06, 2018

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Good Service!

I wanted to gift my brother a bike on his birthday but did not have enough cash saved up for it. The requisite was supported by IndusInd Bank’s personal loans. Their customer service is great and helped me through the process. I definitely recommend IndusInd Bank’s personal loans to everyone!

Reviewer: Pranjal Sharma, Baroda, April 04, 2018

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Personal Loan for Higher Education

I wanted to go for higher education, so I took a personal loan from IndusInd Bank. It was so easy. The processing was super quick, and documentation was simple. I received my loan in no time. My dream came true thanks to IndusInd Bank. Kudos!

Reviewer: Riya Jain, Surat, April 02, 2018

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Always Best in Service!

I have been a loyal customer of IndusInd Bank and have never been disappointed with their service. IndusInd Bank was especially helpful to me during the time of my wife’s deteriorating health condition. I took a personal loan from the bank for her medical support, and now she is healthy and happy. Don’t know what I would have done without IndusInd Bank. Thank you for the great support!

Reviewer: Manohar Pandey, Nagpur, March 28, 2018

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Very Happy with IndusInd Bank Personal Loans

I could not have been happier with the personal loan services by IndusInd Bank. It helped me through a huge financial crisis with so much ease. The customer service executives are great, the process is easy, and I got my loan in lesser time than I expected. Thank you so much for the amazing services.

Reviewer: Priyanka Sharma, Lucknow, March 20, 2018

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Great Service by IndusInd Bank

I wanted to gift my parents their first car. IndusInd Bank helped me with their personal loans. I could buy a car for my parents without any hassles. The documentation is simple, and the process is quicker than any other I’ve heard of. Would like to be in touch with IndusInd Bank further!

Reviewer: Rajat Sinha, Patna, March 18, 2018

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Made My Dream Wedding Come Alive

My wedding was getting delayed due to some financial issues. A friend suggested applying for a personal loan at IndusInd Bank since they offer personal loans for weddings. I applied, and the money was instantly disbursed with very easy documentation. I did not expect such a smooth process. Thank You, IndusInd Bank!

Reviewer: Chhavi Patel, Rajkot, March 16, 2018

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Personal Loan for Balance Transfer is a Boon!

My utility bills and other expenses were getting heavy on me. It all went on my credit card, but the credit card’s raging interest rates only made things more difficult. Then I applied for a personal loan for a balance transfer at IndusInd Bank and all my worries went away in a snap. Now I only have my personal loan to pay out with very low interest rates. This is simply a great service. I would definitely recommend IndusInd Bank’s personal loans.

Reviewer: Rakesh Prakash, Delhi, March 12, 2018

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Tools

Calculate your Personal Loan EMI, Instantly!

Our personal loan products aim at extending monetary support towards your personal expenses. At IndusInd Bank, our first step is to provide you with all the necessary information and assistance to help you make an informed decision. We recognize that settling on your Personal Loan EMI is a significant task.

What is Personal Loan EMI?

Personal Loan EMI is the ‘Equated Monthly Instalment’ that you pay until the final repayment of your personal loan. EMI is a simple monthly break-up of the total principal plus interest amount for the purpose of easy repayment. Calculating the EMI amount beforehand becomes vital in deciding the amount you would like to loan and in planning its repayment without affecting your monthly budget. Our Personal loan EMI Calculator helps you to determine your exact EMI in correspondence with your desired loan amount, loan tenure and interest rate.

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Articles

Various Ways To Use A Personal Loan

Personal loans are unsecured loans, which do not require you to deposit any security in order to avail funds. They are the safest and most effective financial solutions when you are faced with a situation requiring some extra funds on an urgent basis. We, at IndusInd Bank, offer quick personal loans through an easy application process and cutting-edge banking technology.

In addition to not backing your loan application with any collateral, you may also use the money for any purpose accept inventments, depending on your financial requirements. While funds availed through other popular loans, such as car loans and home loans, may only be used for a specific purpose, you could use personal loans for anything including paying for a wedding, consolidating debts, renovating your house, or taking a holiday. Our personal loans are structured to help you meet any of these short-term financial requirements in an effective and quick manner. By providing you with immediate access to funds, our personal loans allow you to focus on the more important aspects of life and help you realize your dreams without worrying about finances.

Personal loans are the smartest way to avail immediate funds and confer a number of benefits, which make them one of the most popular financial schemes in the market. With IndusInd Bank’s personal loans, you could take advantage of many features such as:

  • Unsecured loan – We do not ask you to provide a guarantor or deposit any collateral to avail the desired funds.
  • Multi-purpose – The purpose of your personal loan is entirely dependent on your needs and you may use the funds availed through this scheme towards multiple ends. Understanding that the reasons behind availing a personal loan could be varied, we offer customized personal loans for different purposes such as weddings, home renovations, medical emergencies, etc. 
  • Flexible repayment plans – We offer a loan tenure ranging between 1 and 5 years, which allows you the option of choosing the duration over which you wish to repay the loan amount. This means that you could customize your EMI structure to suit your needs and maximize your resources. Even before applying for the loan, you could use the EMI calculator on our website to determine the amount of EMI you would be required to pay based on your loan preferences.
  • Competitive interest rates – We charge a reasonable rate of interest on your loan amount at market rates.
  • Easy application process – Our transparent application process requires only basic documents and the response time to your application is quick. You may use our online banking facilities to apply and track the status of your loan.
  • Doorstep service – We send our representatives to your doorstep to collect the required documents and assist you with other formalities in order to ensure that all your banking work is taken care of in the smoothest possible manner.
Mistakes that can Get Your Personal Loan Application Rejected

A personal loan is an effective way to raise immediate funds for short-term use. These loans are readily available, and by producing minimum paperwork with basic information, it could be approved in no time.

Applying for a personal loan is a smooth and simple process as long as basic things are kept in mind, and informed choices are made. To ensure that your loan is not rejected, you must avoid making these mistakes:

  • Credit History: The most important aspect of your application for a personal loan is your credit history. The bank assesses your creditworthiness by looking into your credit score and repayment ability. If you have a history of delayed EMI payments, defaulting on loans and unpaid credit card dues, the chances of your loan application being rejected are high. If there are no claims to your income and you have maintained a clean record, the chances of approval are quite high.
  • Insufficient Income: In order to be eligible for a loan, an applicant must earn a certain minimum amount, depending upon his nature of employment. The reputation of the organization which employs the applicant also plays a role in determining the stability of their income. The ability of an applicant to repay the loan amount, along with interest, plays a major role in influencing the bank’s decision to approve a loan. If the bank believes that the applicant’s income is not sufficient or stable enough to comfortably repay the loan, there is a high probability of rejecting the application.
  • Incomplete application: Following the application process and adhering to the requirements of the application form is extremely important. You must carefully get all the documents ready and submit them, along with your application to the concerned branch. An application for a personal loan may be rejected on the basis of the financial documentation not being as per requirement.
  • Loan amount: If you have applied for a loan amount that is less than the minimum amount or more than the maximum amount lent by the bank, your application will be rejected. If the loan amount applied for exceeds the applicant’s repayment ability, according to the bank, there is a good chance of the loan not being approved. In case your loan is approved and the amount you availed is more than the resources available at your disposal, it is inevitable that you would default in your repayment process and end up paying penalties for skipping EMIs. It is important to assess your requirements and resources before applying for a loan. Since you choose the amount of the loan and the tenure over which to repay the amount, it is recommended that you be sure of your resources and opt for EMIs accordingly.
Things to consider before applying for a personal loan

A personal loan could give you the perfect financial boost to meet extra expenses or cover for unexpected emergency situations. You do not need to furnish any details regarding the nature of your requirement or provide any collateral security to back your application. A personal loan caters to the current financial requirements of a person and is repaid over a chosen period of time.

While the benefits of this scheme are many, the decision to opt for a loan is a big one. One must acquire proper knowledge about various aspects of a loan and then make an informed decision. Some of the factors that you must consider before applying for the loan include:

ELIGIBILITY

It is imperative that you meet the eligibility criteria of IndusInd Bank before you consider applying for a personal loan with us. Depending on your nature of employment, we ask for basic documents to prove the following criteria:

Salaried Employee:

  • Age limit – Minimum of 21 years at the time of application and maximum of 60 years on the date of maturity
  • Income – The net monthly income must exceed a minimum of INR 25,000 to avail a personal loan
  • Work Experience – Minimum of 2 years of work experience and must have spent at least 1 year in their current organization
  • Residence – If the applicant is residing in a rented accommodation, stay at the current residence must have been for at least 1 year

Self-employed Professional/ Individual:

  • Age limit – Minimum of 25 years at the time of application and maximum of 65 years on the date of maturity
  • Income – The applicant’s annual net income after taxation must exceed a minimum of INR 4.8 lakh to be eligible
  • Work Experience – 4 years of post-qualification experience is required for a working professional, while a working individual must have 5 years of experience

FEES AND PENALTIES

You must calculate the total cost of taking a personal loan before applying for it. This cost includes the processing charges levied and possible penalties, in addition to the interest rate you pay on the loan amount. Some of the charges and fines levied by us include:

  • Processing fee – We charge 2.50% of the loan amount and tax as a nominal fee to process your loan application
  • Late payment penalties - In case you fail to pay your EMIs on time and default more than once, you would be liable to pay penalties for late payment. INR 150 is charged on a delay of EMI payment beyond 5 days
  • Pre-payment fee - You may choose to pay a part of the loan amount or clear the entire dues prior to the expiration of the contracted tenure. While we allow pre-payment to be made after 12 months in case of salaried individuals and 6 months for the self-employed, a fee of 4% is charged on the outstanding principal

OTHER CHARGES

It is advisable to understand the fine print of the terms of the loan and be informed of the situations which may attract additional charges. Documentation charges, penalties for dishonour of cheques or cancellation of the loan could catch you off-guard. To avoid any misunderstandings regarding the nature of your loan, you must know as much as you can about the scheme before signing any document.


CREDITWORTHINESS

A good credit score is an important factor in establishing creditworthiness. If your repayment ability is healthy according to your financial profile, chances of approval increase greatly. Existing claims on your income and other loan obligations, however, reduce the chances of approval.


5 Precautions to Consider Before Taking out a Personal Loan

Personal loans are effective financial solutions to raise some extra funds on an urgent basis. A personal loan, can be used for any purpose including renovating your house, paying for a wedding, purchasing business equipment, setting up a new office, clubbing outstanding dues against one loan, capitalising on an investment opportunity or simply taking a long-awaited vacation and so on. However, they are unsecured loans that does require to disclose the reason for seeking funds.

Availing personal loan gives people an opportunity to fulfil their financial obligations or achieving their dreams, making them hugely popular financial solution in the current scenario.
Some of its key advantages include:

  • Easy application process requiring basic KYC documentations
  • Quick disbursal of funds
  • Flexible repayment tenure and attractive rate of Interest.
  • Options to make prepayments and close the loan before expiry with 4% Closure charges

While the benefits of this scheme are many, the decision to opt for it is a big one. One must acquire proper knowledge about various aspects of a loan and then make an informed decision. Some precautions that can be considered while opting for a personal loan include:

  • Need to Take a Loan

You must apply for a personal loan only after assessing your requirement for the same. It is advisable to opt out of taking a loan if you can somehow manage to meet your needs through more direct methods of payment. Since the loan is to be repaid through monthly instalments, one must carefully analyze the resources to determine whether it is feasible to regularly pay those instalments to be cautious and avoid any unwanted financial obligations. It is a smart move to determine the amount of money you require, if any, and plan the repayment process judiciously.

  • Calculate the Total Outflow

One must be aware of how much money to spend over and above the loan amount that one seeks. Lower EMIs over a longer tenure tend to be more expensive in the long run as one continues to pay interest on the amount for a greater period of time. To ensure a maximum optimization of the benefits of this scheme, it is advisable to opt for larger EMIs and pay off the loan at the earliest.

  • Study Processing Fees and Other Chargers

It is essential that you assess the total cost of taking a personal loan by factoring in various charges that the scheme may attract, such as processing fee, documentation charges, pre-payment charges, penalties in case of default, and any other chargeable contingencies.

  • Understand the Terms and Conditions

Before applying, one ought to go through the fine print of the loan document to know the exact terms and conditions of the scheme. It is essential that one understands all the pros and cons of the loan and clarify all doubts before signing the document.

  • Attached Frills on Offer

Do not be fooled by superfluous offers. When frills are offered along with the loan, one should thoroughly understand the terms governing them and seek clarity regarding all aspects of the offer.

CIBIL Score: How Important Is It Really When Applying for a Personal Loan?

People require funds for several reasons. However, not many have access to cash flow or capital that they can utilize. Personal loans are not cheap, but they are the fastest and easiest method of acquiring a favourable financing option.

Personal loans are utilized for various reasons like planning a vacation, celebrating any personal occasion, financing for education or renovating the house. Nevertheless, there are a set of eligibility criteria that determines a customer’s credit worthiness.

For instance, the documents the customer provides are monthly income documents, bank statements and KYC documents. In addition, a minimum requirement of a CIBIL score (650), is mandatory to get a personal loan application approved. Higher the CIBIL score, greater the chances of your loan application being approved and better are the chances of getting competitive interest rate offers.

A CIBIL score reflects the spending pattern of an individual.

The CIBIL Score Required for a Personal Loan

The credit score ranges from 300 to 900. A good CIBIL score is necessary as it provides you the leverage of negotiating the personal loan interest rate and procuring credit cards as well as other loan products.

One way to find out your CIBIL Score is to request banks to process it. You could also check it via the official CIBIL website. Checking your CIBIL score beforehand gives you the chance of improving it before opting for a personal loan.

Improving You CIBIL Score

There are multiple ways of improving a CIBIL Score, such as paying credit card dues / bills on time and paying timely EMI’s of loans already obtained. In case of a low CIBIL score, one must avoid applying for a personal loan. Rather, work towards elevating the CIBIL Score first; not only will it help in availing a personal loan, but also enable to negotiate interest rates.

Personal loans can be easily obtained from IndusInd Bank with simple documentation, quick processing and speedy disbursal. You can choose a loan tenure ranging from 1 to 5 years and get the most fitting interest rates. Access IndusInd Bank’s personal loan EMI calculator, and plan your expenses accordingly in order to maintain a good CIBIL Score.

Factors Affecting Your Personal Loan Interest Rate

Many people opt for a personal loan when they are in need of finances. Since they are ‘unsecured loans’, banks do not enquire after the reason of requirement, nor do they ask for any collateral. Due to this, the interest rates for personal loans tend to be slightly higher, and vary from bank to bank. There are a few key factors that can impact lenders’ decision regarding the rate to be levied. These have been enumerated below.

  • Net Income
  • Employing Organisation
  • Credit History
  • Customer-Bank Relationship

Personal Loan Terminologies You Should Know

Tenure
’Tenure’ is the total period for which the personal loan amount is dispensed. This period begins from the date of disbursement. It reaches completion either on the date of closure of the loan, or on the date on which the last EMI payment is to be made, whichever comes first. Obtaining a personal loan from IndusInd Bank provides you with a tenure option of 1- 5 years.

Loan Maturity
The maturity of your personal loan occurs on a particular date given by the lending bank. This date signifies that the principal amount of your loan is due and needs to be repaid to the lender in full. At this point, the remaining interest is also to be paid off, thereby disabling further EMI payments.

Pre-Payment
Customers, when possible, can elect to repay the full loan prior to the maturity date. This is known as Pre-Payment. Pre-payment allows you to save on the interest of the remaining EMIs. However, most banks require a certain number of instalments to be made before pre-payment is applicable. They may also charge a penalty for pre-payment as they incur a loss on the interest.

Part-Payment
Part-Payment is similar to pre-payment as it allows you to repay the loan ahead of maturity. The difference is that part-payment is a partial amount of the principal. It can be cleared when you have an available lump-sum that can be used towards paying off the personal loan. Part-payment further helps in reducing the remaining principal amount, thereby the EMI amount and its respective interest.

Ways to Effectively Manage Your Personal Finances

If making monthly EMI payments towards your personal loan is taking a toll on your monthly expenditures and savings, it is time for you to review your expenditure pattern and make changes accordingly. Here are some easy tips for effective debt payment without giving up on your necessary expenses and saving component.

Budgeting:
Make a note of the amount you spend, or would generally spend in a month towards domestic expenses. It would usually include the following:

  • Household expenses
  • Utility bills
  • Insurance
  • EMIs
  • Travel
  • Leisure and entertainment

Once you have an estimated monthly expenditure, you can easily compare it with your income. This will give you a clearer picture of the income and the expenditure you incurred. Also, you would know if you are dipping into your savings to satisfy the expenditures of the household.

Prioritizing Expenditure and Spending Consciously:

  • Firstly, list the expenditures that are absolutely necessary. These expenditures will include grocery, utility bills, EMIs etc. This helps you effectively trim down your expenditure on necessities. Make sure that your EMI payment is not compromised in any way or else it will increase your debt further in the form of delay payment charges and interest.
  • Secondly, all unnecessary expenses are to be avoided. Healthy outdoor and indoor activities with your friends and family are great choices for some fun and bonding. Keep bills of all your expenses and review them at the end of the month. Conscious spending will help you pay off your debts and will also enable you to save.

  • While considering prepayment of your personal loan amount you must pay attention to the interest and prepayment charges. Instead, you can inculcate healthy expenditure habits, service the entire loan tenure, and earn interest on your savings.
  • Just like switching to healthier munching is one step towards overall wellness, prudent expenditure and effective management of personal finances leads to a secure future. Manage your personal finances with these easy steps and enjoy life to the fullest.

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