Thinking of taking a personal loan? Here are answers to the most frequently asked questions to help you make an informed decision.
Eligibility & Requirements
Who is eligible for a personal loan?
Generally, you need to meet these criteria:
- Age: 21-58 years (salaried) or 25-65 years (self-employed)
- Minimum income: ₹15,000/month (varies by lender)
- Work experience: 1-2 years total, 6 months in current job
- Credit score: 650+ (750+ for best rates)
What documents are required?
- PAN Card & Aadhaar Card
- Last 3-6 months' salary slips
- Last 6 months' bank statements
- Form 16 or ITR (for self-employed)
- Passport-size photographs
Does applying affect my credit score?
Each loan application creates a "hard inquiry" on your credit report, which can temporarily lower your score by 5-10 points. With Unyfy, we do a soft check first - your score isn't affected until you choose a specific offer to proceed with.
Interest Rates & Costs
What interest rates can I expect?
- Excellent credit (750+): 9.97% - 12%
- Good credit (700-749): 12% - 16%
- Fair credit (650-699): 16% - 22%
- Below 650: Higher rates or secured loans recommended
What other charges should I know about?
- Processing Fee: 0.5% - 3% of loan amount
- Foreclosure Charges: 0-5% (many banks offer zero foreclosure)
- Late Payment Fee: 1-2% of EMI amount
- GST: 18% on processing fee and other charges
Fixed vs Floating rate - which is better?
For personal loans, fixed rate is almost always better. Your EMI stays constant throughout the tenure, making budgeting easier. Floating rates are more common in home loans where tenure is 15-20 years.
Application & Disbursement
How long does loan approval take?
With digital lenders and pre-approved offers, you can get approval in minutes to 24 hours. Traditional banks may take 2-7 days depending on documentation and verification.
How is the loan amount determined?
Banks consider your income, existing EMIs, credit score, and employer profile. Generally:
- Loan amount: Up to 20-25x monthly salary
- Total EMIs shouldn't exceed 40-50% of income
- Higher credit score = higher loan amount approved
Can I prepay or foreclose my loan early?
Yes! Most banks allow prepayment after 6-12 months. Some charge 2-5% foreclosure fee, but many now offer zero foreclosure charges - always check before signing.
Pro Tips for Better Loan Terms:
- Check and improve your credit score before applying
- Compare offers from multiple lenders (Unyfy does this for you!)
- Opt for a shorter tenure if you can afford higher EMI
- Read the fine print for hidden charges
- Avoid multiple applications in short time