What is a Personal Loan?

A personal loan is the money borrowed from a bank or a financial institution for any particular use. These loans are not purpose-specific like other loans and can be used for any reason that pleases the borrower.

PaySense offers instant personal loans up to 2 lakh INR without any collateral for a variety of purposes to its customers. Personal loans are convenient due to several reasons.

For starters, these are unsecured and do not require any collateral against them. Secondly, personal loans can be paid off in smaller and relatively easier monthly payments. Furthermore, the interest rate on these is fixed, which means that the EMI amount is fixed during the loan tenure.

Let’s take a look at how to get a personal loan, how they are better than conventional loans, and when you should apply for one.

How To Get A Personal Loan?

Personal loans help many people and households meet a shortage of cash during celebrations, festivals, important family milestones, making an expensive purchase, and medical emergencies.

By their very nature, personal loans pose no limitations on how one chooses to utilize the loan amount, thus, making them a popular choice.

Here is a step-by-step guide to assist you with the process of availing a personal loan:

  • Determine your need

Depending upon the need for your loan, the amount you wish to borrow may vary significantly. You can start by marking out the need behind the credit and settle on the amount you require. For example, you might need 1 lakh INR for undertaking home renovation activities, or 2 lakh INR to purchase your first car. It is crucial that you decide on an amount that you earnestly require and, will also be able to pay off comfortably, depending on your monthly finances. PaySense offers loans from 5000 INR to 2 lakh INR.

  • Check your eligibility

Once you have finalized the loan amount, check your loan eligibility and credit line using the instant personal loan app. This depends on various factors such as your credit history, the status of employment, and monthly earnings, etc. Salaried individuals need to have minimum earnings of 12,000 INR per month and self-employed individuals need to earn at least 15,000 INR to be eligible for a loan from PaySense. Based on these factors, PaySense will decide your credit line or the maximum loan amount you can borrow.

  • Plan your loan repayment and installments

You can choose from a wide range of repayment plan structures using the PaySense EMI calculator and decide on the loan tenure and monthly EMI amount based on your monthly budget. This will help you to choose a manageable repayment plan that is the best fit for your budget and does not strain your finances.

  • Apply for the loan

All you now need to do is upload your documents using the PaySense mobile app to get the loan approval. You need a proof of identity (Aadhar card/PAN card), proof of address (Aadhar card, utility bills or rental agreement), proof of income (bank account statement), and a photograph.

Once the documentation is in order, PaySense approves the loan within a few hours, and the funds are disbursed in a few working days. The loan amount is credited to a bank account of your choice and EMIs for the loan is deducted from the same account in the future.

Why go for a personal loan?

Personal loans differ from conventional loans in many ways. This gives them many advantages and makes them essential financial aid whenever the need arises. These are based on elementary concepts and have minimal requirements and restrictions. Minimal restrictions, lack of collateral, lower interest rates and EMI’s are some of the primary reasons why personal loans have emerged as an essential financial tool for individuals in need of instant cash influx. Let’s explore some of these advantages in further detail:

1) No restrictions on the usage: Personal loans do not warrant the lender to know the details of loan usage or the reason behind the loan. The customer is free to use the funds as per their choice, and there are no restrictions from PaySense on how the loan amount is spent.

2) No requirement of collateral: Personal loans are unsecured, which means that you are not required to provide any asset or any other collateral to PaySense as security against them to avail them. In addition to making the approval easier, this makes it easier for consumers from a variety of backgrounds to avail them in case of any kind of emergency.

3) Simple Documentation: PaySense has a one-time paperless documentation process that requires you to upload the following documents:

  • Valid Identity Proof
  • Address Proof
  • Income Proof
  • A photograph

4) Low-interest rates and flexible tenures: Personal loans allow customers to reap the benefits of low interest rates and offer the flexibility of choosing the repayment tenure. This gives the customers an advantage of customizing the loan repayment as per their choice.

5) Quick approval and disbursal: The documentation process for personal loans moves swiftly with shorter processing, approval and disbursal times. Since the entire process is paperless, customers can apply and receive the loan within a few days.

What are personal loans used for?

As mentioned earlier, customers are free to use personal loans for any reason. However, it might help to know some of the more popular reasons why people avail personal loans from PaySense.

From financing big-ticket purchases, like a car, bike, or household electrical items, to home renovation; paying medical bills to consolidating debts from multiple sources or even expanding their business, there are several reasons why people apply for personal loans.

These differ based on people’s requirements to their financial limitations. These have no limitations of the use and hence give the borrower freedom of choice to spend the loan amount as they might deem fit.

What else should you know about personal loans?

1. What is the eligibility criterion for a personal loan?

Here are the main eligibility criteria for a personal loan.

  • The borrower’s age should be within 21 years to 60 years
  • The borrower must be a citizen and resident of India
  • The borrower must be salaried or self-employed
  • The borrower must have a minimum monthly income of INR 12,000 (for salaried individuals) and INR 15,000 (for self-employed individuals)

2. How long does it take to get approved for a personal loan from PaySense?

PaySense approves loans application within two working hours. The funds are disbursed within four days after the same.

3. Can you pay off a personal loan early?

Yes, this is known as prepayment or foreclosure of a personal loan. However, foreclosing the loan incurs paying a foreclosure fee of 4%.

4. What is the average interest rate on a personal loan from PaySense?

The average interest rate on personal loans from PaySense can range from X%-Y% depending upon various factors such as the customer’s salary, loan amount, and repayment tenure.

5. What are the essential factors that PaySense considers when applying for a personal loan?

PaySense considers the following factors while considering a personal loan application:

  1. Monthly income
  2. Age
  3. Place of Residence
  4. Credit History

If you borrow an amount that you can pay back quickly and never miss an EMI, you can also borrow higher loan amounts from PaySense in the future, without any additional documentation.

At PaySense, we are committed to making easy and affordable credit accessible to as many Indians as possible. The many benefits of personal loans, like the simple application process, quick disbursal, lower interest rates, freedom to use the funds, lack of collateral and affordable EMI plans have naturally made them popular across people from different walks of life.

Rest assured, personal loans will only get more popular and accessible by the day, and the process on how to get a personal loan might also be simplified further in the future.