If there is a type of loan that is commonly known as a personal loan, it is the one preferred by all. It is versatile, easy to obtain, and can be used for different purposes by different people. It can be used for many purposes and requires no warranty. There are many lenders in the market today who offer these services in their jurisdictions, but know that India has specific rules and regulations regarding personal services. The RBI rules on personal loans seek to protect the rights of borrowers as well as the financial position of borrowers.

Personal Loan has some Terms and Condition

Use and Safety: One of the greatest personal advantages available is multipurpose use. Unlike student loans and loans, personal loans are not restricted by a predetermined purpose. Therefore, personal loans do not require endorsement or endorsement.

Eligibility Criteria: The eligibility criteria for personal loans are designed to help you repay the loan. Each lender has different eligibility criteria. Some of the common ones that determine them are:

Customer Age: Most lenders offer personal loans to people between the ages of 22 and 58. Most people in this age group have a stable income and are able to repay their loans.

Loan Income: Possibly the main criteria for loan eligibility: Loan income must be above a certain threshold. Some lenders offer personal loans because the risk is higher for self-employed loans. In addition, the minimum employment income ranges from 20,000 to 30,000 or more.

Credit Scores: Your CIBIL Score shows your creditworthiness and repayment ability. It is an important eligibility criterion, which is needed  when you want to borrow an unsecured loan. This is because, in the absence of collateral, your credit or CIBIL score provides reassurance of timely repayment to the lender. The higher your credit score, the more likely a lender is to approve your loan application and offer you more favorable terms, such as a lower interest rate. While each  individual has its own criteria, in general lenders view scores more than  670 as an indication that a borrower is creditworthy.

Regular Income: if you are a freelancer, a business owner, a contractor, or anyone as such who does not receive a salary slip, you can easily get  a personal loan by providing the lender an alternative proof of stable income.

Citizen of India: you need to be a residing citizen of India. You should be aged between 21 years and 67 years. You need to be employed with a private, public limited company, or an MNC.

RBI Guidelines on fair practice code for lenders

• Banks and financial institutions are required to confirm receipt of all credit applications.
• Banks and financial institutions must process loan applications within a reasonable time. If additional data or documents are required, the borrower must be notified immediately.
• If the creditor withdraws/cancels/demands early payment, the borrower must be informed
• Creditors generally should not interfere in the life of borrowers, unless otherwise stated in the loan agreement.
• Banks and financial institutions will not discriminate on the basis of race, caste or religion when granting loans. However, this does not exclude participation in credit-related programs aimed at the lower strata of society.
• The repayment time of the loan must be guaranteed and the loan must be notified in case of any change in the terms.
• The creditor will not harass the borrower in collecting the loan. The RBI has many other terms and regulations designed to protect the interests of both borrowers and lenders. If you want to know more about the loan process and the right loans, check out our article on the subject.