A personal loan is a type of unsecured credit that does not require collateral such as property or a vehicle. It allows individuals to borrow a fixed amount of money from a financial institution and repay it over time through structured monthly installments (EMIs). Approval typically depends on the applicant’s credit profile, income, and repayment history.

Main Features of Personal Loans

• No Collateral Required: Borrowers are not required to pledge assets.
• Versatile Usage: Funds can be used for a range of purposes—such as medical expenses, home improvement, travel, or debt consolidation.
• Fixed Monthly Payments: Repayment is done through equal EMIs over a predetermined term.
• Credit-Based Decision: Lenders evaluate credit score, income stability, and existing financial obligations.
• Credit Score Impact: Timely repayments support a healthy credit score, while delays may lower it.

Steps in the Personal Loan Process

1. Loan Application: Submit income proof, employment details, and identification for review.
2. Loan Disbursal: Upon approval, the sanctioned amount is credited directly to your bank account.
3. Repayment: Begin making fixed EMI payments until the loan is fully repaid as per the agreed schedule.