Mohan, a journalist from Indore, was facing a great crisis. His mother had been hospitalised and he needed to pay a huge medical bill. His health insurance plan made a partial claim settlement, as some treatments were excluded. He needed cash to pay for everything else, and he needed it fast. His family physician then advised him to take a personal loan. Mohan heeded the doctor’s words and asked his bank about the loan. Here is what he learned:

What is a personal loan?

A personal loan is an unsecured loan lent by banks and financial institutions. The loan can be put to just about any kind of personal use. It could be a wedding, household repairs, a vacation, or, as in Mohan’s case, a medical emergency.

Features of a personal loan

A personal loan has some common features, which are as follows:

  • Unsecured loans: These loans do not need any security. They are offered based on the financial profile of the borrower. The lender takes into account the borrower’s occupation, level of income, and credit score.
  • Instant loans: Personal loans are the easiest to get. Banks and financial institutions approve personal loans at once without any hassle. However, you have to produce proper information and documents.
  • A variety of uses: A personal loan can be put to any kind of use. Of course, you cannot fund any speculative or gambling activities! Otherwise, you can use the loan any way you want.

How to apply for a personal loan?

The Internet has the answer. Why look anywhere else? Borrowers can apply online. They have to:

  • Check their eligibility
  • Check prospective EMIs
  • Furnish their details
  • Apply for the loan

The process takes a few minutes. The loan approval comes through at once.
If you are conservative, the offline mode of loan application is also available. You can visit the bank or the financial institution’s office. Then fill in the loan application form, submit the documents required, and apply for the loan.

Personal loan eligibility

Individuals have to fulfil some basic eligibility criteria to enjoy a personal loan. Some of these are listed below:

  • Age: There is a minimum age criterion. Only individuals above this age can apply for a personal loan. Usually, the minimum age is 18 or 21 years.
  • Source of income: The borrower has to be gainfully employed. Both salaried and self-employed persons can apply for personal loans. A gainful occupation is compulsory to establish the borrower’s source of income and, hence, repayment capacity.
  • Level of income: A minimum level of income is necessary. Only individuals earning this minimum level can take the loan. They would have to submit documents as income proof.
  • Credit score: The final requirement is a good credit score. Some banks do give personal loans to people with bad credit. But they charge a hefty interest rate.

So, Mohan got a personal loan and his financial crisis was averted. So, what are you waiting for? If you need an emergency loan, a personal loan could be your answer. It is an instant loan that comes to your aid in times of need, just like a friend.