Since it is unsecured in nature, lenders have stricter norms regarding eligibility and sanctioning of Personal Loan. But some of the basic eligibility criteria the applicant must fulfill are:

• Indian Resident
• Minimum 21 years of age
• Salaried or Self Employed Professional / Non-Professional
• Permanent employee of the organization, if salaried
• Continuous source of income to service the loan

The Factor depend on rate of interest and the eligibility are:

• Current rate of interest is @ 10.45%.
• Company for which the prospective borrower is working
• Credit history of the borrower

As far as processing fee is concerned, it varies from bank to bank, loan amount or the special schemes operated by respective lending institutions. It will be in the range of 0.25% to 2% + Service tax. However, the best part of Personal Loan is processing fee is not charged upfront, it gets deducted from the loan amount. So here we get good option to compare the loan schemes with various banks and pay processing fee to the bank we zeroed in.

Foreclosure Charges also vary from lender to lender. In few institutions, it is NIL after a certain period of time which is known as Lock-in period or the charges get reduced after 1 year or 2 years.

One of the basic mistake people make while applying for a personal loan is not comparing the deal with other lenders. Nowadays, banks or lenders have their own USPs about the features and the policies of products. You need to decide what you want. For e.g. one lender offers a low rate with low processing fee but does not have feature of part payment or have charges on foreclosure. Another lender offers you no foreclosure charges and allows you to do part payment and have slightly higher rate.

Here, 3M Loans gives you the wide range of selection and comparison tool for the deal so that you can decide on what you want – high rate of interest or better features with good rate of interest.

This is a common loan application mistake of not clarifying the loan purpose, that, how the loan amount is going to be used and after how long the purpose will get resolved. When you apply for the loan, please explain the purpose and get all the terms and conditions cleared, so that you can plan your loan amount smartly and plan your repayment as well.

Whenever you apply for a loan, banks or lenders check your Credit History that how well you are in managing your income and EMIs. If you have good track records of your loan, it means that you have good Credit History and eventually you have good CIBIL score. And one thing is sure, if you have good CIBIL score, the lender would be eager to make you their customer. Good CIBIL score range from 730 and above.

While applying for a loan please make sure you know the terms and conditions of the loan and get all the details before signing the documents. Incase if you have forgotten to check the same while signing the application form, please check the approval agreement given by lender stating the same terms and conditions which you had been told initially.

Please avoid signing blank agreement or forms. This will help you in two ways:

• You know what all information is required from you
• The information is true or not given to you

Thus, you will come to know about the process. Save yourself from any future mishaps and involve yourself in the entire process.

It would be beneficial and help the lender if you give the full details of your income and obligations so that your actual eligibility can be calculated. Concealing such information from the lender would make the task difficult for you to get the loan. Misleading documents or information will lead to rejection of your application.

There are so many lending institutions in the market with so many lucrative schemes, it can be a confusion for the customer to choose the lender.