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For quick and short-term money, you can always get a personal loan. Personal loans can range from Rs. 10,000 to Rs. 30 lakhs. Get complete flexibility of end-use and you get the loan without a need for collateral. Check the various deals on CreditMantri.
24 to 38 months
11% to 19%
12 - 16 months
6 to 36 months
up to 6 years
A Personal Loan is a form of financial assistance provided by different banks and NBFCs. It can be used for personal needs such as medical emergencies, higher education, marriage expenses, holiday plans, and many more.
There is no constraint on how the borrowed amount is actually used, unlike certain other types of loans; the borrower has complete freedom to use the money for whatever reason they choose.
A personal loan has two essential properties:
Total flexibility on end-use. There are no restrictions on how you can spend the loan amount. This is in contrast to a home loan or car loan where the amount of the loan can only be used to purchase a property or a vehicle only. You're free to use the money in any way that you want.
Non-requirement of collateral. Personal loans are unsecured loans, meaning you are not required to provide the lender with any collateral in the form of assets, shares or any other properties.
You can approach your bank or any financial institution to apply for a personal loan. These days, you can even apply for personal loans online. The official website of most of the banks and NBFCs have a provision to apply for a personal loan with a single click.
Your personal loan eligibility is determined based on various factors like your credit score, income, age, employment type, and a few other factors. If the financial institution finds that your eligibility criteria are favourable, they will sanction your personal loan and disburse the amount into your account.
Now, the personal loan amount could be disbursed as cash in your account, or the lender may provide you with a pre-loaded card that can be used for your purchases. Repayments are done through monthly EMIs over the tenure of the loan. Most banks do allow part payments and pre-closure of your personal loan.
There is no condition on the usage of the personal loan amount. The borrower can use their personal loan amount for various needs like marriage, medical emergencies, higher education, vacation planning, home renovations and many such needs.
A personal loan is a good choice if you need money quickly and for a relatively short term. As you do not have to provide paperwork for the end reason for the loan amount, the loan disbursement will be comparatively quicker than for most other loans. For example, for a home loan, you need to obtain the legal paperwork relating to the property's title deed, all the government permits needed and other supporting documentation. As you are free to use your personal loan for any reason, there is no need for this end-use documentation.
A personal loan is also a good choice when you don't have any assets to pledge for a loan as collateral. Lenders would instead review your credit score and repayment history to determine whether you are a low-risk client and decide whether to accept your application in order to safeguard their assets.
There is no typical loan amount under personal loans. The borrower can avail of loans that vary from Rs.10, 000 to Rs.50 lakhs. The amount you apply for must be commensurate with your willingness to make repayments while applying for a personal loan. The final approved loan sum depends, of course, on the lending requirements used by the bank/NBFC and how they determine your ability to repay the loan.
Personal loans are given with a minimum repayment period of 12 months up to a maximum of 7 years.
Your credit score and your credit report are the most significant factors that decide whether your personal loan is accepted or not. What does this mean?
Four credit rating agencies, or credit bureaus, are approved by the RBI to issue credit reports and credit scores. In cooperation with banks, credit card companies and other organized lenders, they collect and maintain records of all your credit-related activities. For all your credit transactions, the bureaus receive reports on a monthly basis from these lenders. This includes details on your payments via EMI and credit card (including any late or missed payments), balance outstanding, any adjustment to your total credit limit, and any other information relevant to the creation of your credit profile.
A mathematical formula is used to determine your credit score based on all this information. The score is a representation of your past and present credit behaviour and provides a preview of your credit-worthiness to prospective lenders. Your score would appear to be high if you have a strong track record of making all your payments in time and in full. There will be a negative effect on your credit score if you have a history of defaulting on payments or using unnecessary credit.
Since you do not provide any collateral for a personal loan to the bank/NBFC, if you default on your payments, the lender runs the risk of losing money. In order to determine your credit background and monitor your loan repayment actions over the years, lenders may review your credit information report (CIR) or credit report. This gives them an understanding of your credit discipline and helps them to decide whether you are a customer of high risk or low risk. A significant consideration for lenders in authorizing a personal loan application is a credit report that demonstrates a clear record of making repayments on time and overall responsible credit behaviour.
To qualify for a personal loan, it is usually recommended to have a credit score of 750 or above. The higher your ranking, the better your chances of acceptance would be.
Lenders normally look for a minimum credit score of 750 as a first move before determining whether to continue with the processing of your application. Since personal loans do not ask for any collateral, lenders look at your credit history to determine whether you can be trusted to fulfil your debt obligations. A credit score of 750 suggests that a strong track record of making timely repayments for a prolonged period of time has been demonstrated by the client.
There is no guarantee of securing a personal loan for any given credit score. Your chances of being accepted, however, are considerably higher if you have a score above 750. A score that is slightly below 750 at the same time does not necessarily mean that your request will be denied. Some probable results of your personal loan application are listed below:
If your score varies from 300-599, you will not be eligible for a personal loan. A low score is a warning signal to lenders in this area that you do not have a history of good credit behaviour. The majority of lenders will deny your request right away. To restore your credit health and increase your score to a level where you become eligible for a loan will be the immediate steps you need to take.
A credit score of 600-749 - You might have a chance of being accepted by certain lenders, but it is not a high score. They may be able to look at other factors, such as the stability of your career, your annual income, the magnitude of your other liabilities, that will affect your repayment potential in the future. If they agree that, considering your score, you have the potential to meet your repayment burden, your application has a chance of being accepted. However, if you are looking to apply for a personal loan, it is advisable to raise your score to 750.
A credit score of 750 and above - With such a score, you have a good chance of obtaining a loan. A high score has several other benefits: the approval process will be much faster; the amount of the loan could be larger, and you may be able to negotiate a lower interest rate. When you have a high credit score, the entire loan approval process is much easier.
During the loan-approval process, your employment is also a significant consideration. Since customers of personal loans do not have any collateral, lenders need to ensure that during the loan duration you will have a steady monthly income that will allow you to make regular repayments. That is why they pay close attention to your work status. They will look at whether you have steady jobs and for a certain amount of time has been in the same position. Someone with a history of regularly changing employment may not be readily eligible for a personal loan because it means that during the loan term he/she may not have a steady or predictable income and may not be able to make regular payments. Being in a job for at least a year before you apply for a personal loan is probably a smart idea.
Another substantial consideration is your annual salary. Again, the banks want to be told that you have a decent income (from salary and other sources) that will allow you to make your monthly repayments because there is no collateral. The higher your salary, the better your chances of getting a personal loan approved.
Also of interest is your EMI payment record. To verify if you have regularly shown financial stability and a history of timely EMI payments, lenders will look at your credit report. If they see that you have made payments on a regular basis and met your debt commitments, they would be inclined to view your request for loans more favourably.
The benefits of a personal loan are that they are reasonably easy (because they do not need as much paperwork as a home or car loan); there is no limit on how the money can be spent; no collateral is needed for personal loans. So if you don't have any assets to give as security, like a house, or shares or gold, and are in urgent need of capital, this is perhaps the most convenient alternative.
When opposed to other loans, the biggest drawback of a personal loan is the higher interest rate. Since the lenders have no protection against default in payment, they charge high-interest rates to cover the risk of their lending. In terms of interest rates, personal loans may be one of the costliest loans to take out.
If you need money urgently and don't have any assets to use as collateral, then the best alternative could be a personal loan. It is important to note, however, that you are going to pay high-interest rates on this loan, so you should have a strategy to be able to make all your repayments on time. Also, before you apply for a personal loan, make sure you have an acceptable credit score. If your application is denied because of a low credit score, with each rejection, your score will drop, even more, making it even harder to access credit in the future.
1. How do I pick the best deal for a personal loan?
The only way to determine which loan offer to apply for is to carefully research the different choices. You can judge which deal fits your financial condition and needs once you have a clear understanding of the deals and schemes available.
2. How do I apply for a personal loan?
You may apply for a personal loan in many ways. You can apply directly online on the website of the bank/ NBFC, or you can go to the branch to apply for a personal loan in person; go through websites for online comparison, or you can contact a direct sales agent. CreditMantri will instruct you on how to boost your score in the most reliable and efficient way so that your personal loan application is accepted if you want to apply for a loan and think your credit score may not be good enough. You will also be matched with the most relevant loan deals on the market for you. You will have easier and hassle-free credit access with a decent ranking.
3. Can I get a personal loan during Covid-19?
Though the Covid-19 pandemic has affected the economy adversely, personal loans rank on the top of loan products. The banks have readjusted their business model to accommodate the rising demand for personal loans during this crisis. The application process has been made completely online. Eligibility criteria like minimum income have been relaxed a bit to increase the customer base. In all, personal loan demand has risen considerably during this pandemic and banks have come up with various measures to sanction personal loans for eligible applicants.
4. How is personal loan repayment done?
Personal Loan repayments are done through monthly EMIs over the tenure of the loan. You can find the best EMI that fits your budget using a personal loan EMI calculator.
5. How can I get a 50k loan fast?
The best way to get a loan of Rs. 50,000 is by applying for a Personal Loan. They are quick and do not require any collateral.
6. What are the main documents needed for a personal loan?
The actual list of documents varies from lender to lender. You generally have to provide the following mandatory documents:
7. Can I fore-close my personal loan?
Again, it depends on the lender. While some lenders allow foreclosure with pre-closure charges others require you to pay the loan as per the agreed tenure. So, make sure to check the prepayment terms and conditions while applying for the loan.
8. How long does it take for the personal loan amount to be disbursed?
Once you have submitted all the required documents and received loan sanction, expect the loan amount to be disbursed within 24 to 78 hours.
9. What is the interest rates on a personal loan?
The interest rate charged on your personal loan depends on the lender and your credit profile. Currently, the interest rates on personal loans in India start from 8.45% onwards.
10. Will my personal loan EMI change if I change my job?
No. As long as you continue to repay the EMIs on time, a change in job will not impact your personal loan repayment schedule.
11. How can I pay my personal loan EMIs?
you can use any of the following methods to pay the personal loan EMIs:
12. Do I need a guarantor for a personal loan?
Generally, personal loans are unsecured, meaning you don’t have to provide collateral or security. However, if your credit score is low and chances of loan eligibility are poor, having a guarantor may increase your chances of securing the loan.
13. Do personal loans hurt my credit score?
All loans - irrespective of the type of loan - can cause your credit score to dip temporarily, especially at the time of application and approval. However, once you start repaying EMIs on time, a personal loan can help in building your credit score.
14. What happens if I don’t pay my personal loan in India?
Non-repayment of a personal loan is not a criminal offence i.e. you won’t go to jail. But, it can have other repercussions - like poor credit score which will make it difficult to secure other loans and credit cards in the future. The lender may contact you repeatedly to recover the cost of the loan or even may file a legal complaint against you.
15. How much personal loan can I get with a salary of Rs. 15,000?
The actual loan amount you qualify for depends on several factors like your credit score, debt-to-income ratio, other debts, etc. Your income is just one of the many factors that determine the loan amount. You can find the loan amount you’re eligible for by using a personal loan eligibility calculator, available on many sites.
16. How much personal loan can I get with a salary of Rs. 25,000?
Your income is just one of the many factors that determine the loan amount you’re granted. Other factors like your credit score, other debts, previous repayment history all play a crucial factor in deciding the loan amount you’re sanctioned. Use a personal loan eligibility calculator to determine the loan amount you can get.
17. What is the minimum income that I should need for a personal loan in India?
Personal loans are available for individuals with incomes starting from as low as Rs. 15,000 per month.
18. Can I apply for a personal loan jointly with my spouse?
Yes. Applying for a personal loan along with a co-applicant not only increases the chances of eligibility but also qualifies you for a bigger loan amount.
19. What is a personal loan EMI?
The EMI stands for Equated Monthly Installments. This is the amount you’ll have to pay every month to the lender for the entire tenure of the loan. The EMI includes both the principal and interests.
20. Why should I apply for a personal loan online?
Applying for a personal loan online has many benefits like a quick comparison of different lenders, easy online paperless application and quick disbursal.
Union Bank Of India Loan EMIs To Become Expensive As The Lender Hikes Interest Rates28 Sep 2022
Union Bank of India has hiked the marginal cost of funds-based lending rates from 0.05 percent to 0.35 percent. The outcome of this will be an increase in the EMIs for those who avail loans measured against the MCLR. After revision, the rates of the...
Union Bank of India has hiked the marginal cost of funds-based lending rates from 0.05 percent to 0.35 percent. The outcome of this will be an increase in the EMIs for those who avail loans measured against the MCLR. After revision, the rates of the bank fall between 7.00 to 8.10 percent. The overnight loan rates have increased from 6.95% to 7%. The one-month, three-month, and six-month tenures have increased from 7.10% to 7.15%, 7.30% to 7.35%, and 7.50% to 7.55% respectively. The one-year, two-year, and three year interest rates have increased from 7.70% to 7.75%, 7.75% to 7.95%, and 7.75% to 8.10% respectively.
Many banks have hiked their lending rates post the RBI increasing its repo rate by 140 basis points so far this financial year. Generally, when RBI hikes the repo rate, it increases the cost of funds for banks. This implies that banks will have to pay more for the money borrowed from RBI. As a result, banks pass on the cost to borrowers by raising their loan interest rates making EMIs expensive.
Bank of Baroda, Indian Overseas Bank Raise Loan Interest Rates28 Sep 2022
Bank of Baroda and Indian Overseas Bank increased their Marginal Cost of Funds based lending rates making loans costly for customers. The increased MLCR for Indian Overseas Bank has come into effect from September 2022. The three-month and six-month ...
Bank of Baroda and Indian Overseas Bank increased their Marginal Cost of Funds based lending rates making loans costly for customers. The increased MLCR for Indian Overseas Bank has come into effect from September 2022. The three-month and six-month MLCR hikes are 7.70%. The MLCR will be 7.05% for overnight and 7.15% for one month. The MCLR for loans with one-year maturity has been raised from 7.65% to 7.75%. The increased MLCR for Bank of Baroda has come into effect from 12th September 2022. The three-month and six-month MLCR hikes are 7.50% and 7.65% respectively. The MLCR for loans with one-year maturity has been hiked from 7.70% to 7.80%.
This hike in MLCR will make car, personal,and home loans more expensive. One of the most important factors that affect EMIs is the MLCR. As the MCLR rises, the borrower's EMIs will increase as well. The existing EMIs of borrowers will change due to increase in MLCR rates during times of loan reset. The lowest rate at which banks are permitted to lend to their customers is represented by the benchmark interest rate known as the Marginal cost of lending rate or MLCR.
Finnable offers personal loans without credit score24 Aug 2022
Finnable, a rapidly growing Fintech startup, is now giving loans to benefit people who do not have a credit score. The process is completely digitized, quick, and seamless. An individual can apply for the personal loan either on Finnable's website or...
Finnable, a rapidly growing Fintech startup, is now giving loans to benefit people who do not have a credit score. The process is completely digitized, quick, and seamless. An individual can apply for the personal loan either on Finnable's website or through their personal loan app. To apply, a person has to create an account, register, and input professional details such as age, employment, etc. Along with applying for instant personal loans, individuals can be aware of how much EMI they have to pay monthly by using Finnable’s personal loan EMI calculator.
SBI raises MCLR on loans by 20 bps19 Aug 2022
State Bank of India has increased its marginal cost of lending rate (MCLR) by 20 basis points. The new MCLR is effective from August 15, 2022. (One basis point is equal to one-hundredth of a percentage point.). The 2 year and 3 year MCLR rates have b...
State Bank of India has increased its marginal cost of lending rate (MCLR) by 20 basis points. The new MCLR is effective from August 15, 2022. (One basis point is equal to one-hundredth of a percentage point.). The 2 year and 3 year MCLR rates have been raised to 7.90% and 8% respectively. The MCLR for a six month term has been increased from 7.45 % to 7.65%. The one-year MCLR rate has been hiked from 7.50% to 7.70%. The rates for overnight, one month, and three months have been increased from 7.15% to 7.35%. The external benchmark lending rate and repo linked loan rate have also been raised.
Union Bank of India signs MoU with SIDBI. 10 Jun 2022
The lending public sector Union Bank of India has signed a Memorandum of Understanding (MoU) with the Small Industries Development Bank of India (SIDBI) to do a Co-lending project for MSMEs. This MoU would benefit the Union bank of India to enhance i...
The lending public sector Union Bank of India has signed a Memorandum of Understanding (MoU) with the Small Industries Development Bank of India (SIDBI) to do a Co-lending project for MSMEs. This MoU would benefit the Union bank of India to enhance its customer base. Also, this tie-up will help the MSMEs to cater to their financial needs. The major highlights of the project are the joint identification of possible projects, term loans, and working capital for MSMEs. SIDBI commits to providing timely finance for MSMEs across different sectors. Through its PAN India branch network, the Union Bank of India can offer banking products such as current accounts, savings accounts, working capital facilities, and other services to the MSME Customers of SIDBI.
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