What is a Personal Loan?

What is a Personal Loan?

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Here is a detailed guide on a Personal Loan and how it can be used

Key Takeaways

  • A personal loan is an unsecured loan, which means banks do not ask for collateral
  • You can apply for this loan online, and it is usually disbursed within a few hours if you are eligible
  • Loans are disbursed with minimal to no documentation
  • You can use the loan for many reasons like funding a wedding or vacation, home renovation, buying latest high-ticket products
  • You can repay the loan in pocket-friendly EMIs, over tenures of 1-5 years.

Introduction

Experimental, innovative, dynamic- these are three words that can very well be used to describe millennials. A common feature that can be spotted in the lifestyle choices of most millennials, also called the 'Gen Y', is the need for instant gratification. From the latest gadget to overseas vacation, millennials like to have all this and more in the present. They do not wish to wait another 6 months or a year to save up and make such big-ticket purchases or spends. Thus, a personal loan is a convenient option for such individuals. This article explains what a personal loan is, and how you can utilise it to fulfill your dreams.

What is a Personal Loan?

A Personal Loan is a loan offered by most banks to help individuals meet their personal needs. These are usually unsecured loan products that are sanctioned based on the financial credentials and creditworthiness of the applicant. Some of the factors that most banks and lenders take into account when evaluating your eligibility for a Personal Loan are your credit scores, monthly income, existing debt obligations and credit history, as well as your employment status. Basically, by evaluating these factors, the bank tries to assess your repayment capacity.

What can you use a Personal Loan for?

Besides knowing what a personal loan is, you should also see how you can use it. A Personal Loan is an incredibly flexible loan option that can fund several financial needs. You can use a Personal Loan to satiate your wanderlust, fund your dream wedding, or buy the latest gadgets using the money. You can also utilise the funds from a Personal Loan to undertake a home decoration or renovation project.

How to avail of a personal loan?

Having explained personal loan meaning and uses, let us understand how you can apply for it. These days, most banks allow you to apply for a Personal Loan online. Moreover, the loan is processed almost instantly and involves minimal to no documentation, making it a paperless and digital process. This makes the loan option more suitable to the needs of millennials who are tech-savvy and prefer the digital option.

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What is the maximum amount you can borrow under a Personal Loan?

We have already answered the question of what can you use a personal loan for, depending on your requirement. However, it is just as critical to understanding the maximum loan amount you can get. This amount varies from lender to lender and largely depends on your eligibility, credit repayment history, and credit behaviour. At digibank, you can get a Personal Loan of anywhere between Rs.20,000 to Rs.1,500,000. The loan amount sanctioned depends on your eligibility.

What are the documents required to apply for a Personal Loan?

Most banks have a list of documents that you need to furnish when applying for a Personal Loan. Some of the standard documents asked for include identity proof, proof of income, and residence, among other things. However, at digibank, you only need to provide specific personal details when applying for a Personal Loan online. No other documents are required as the process is entirely paperless. Only in the case of a loan request where the amount needed is above the approved limit does digibank require bank details or statements of an applicant to be uploaded.

Conclusion

Now that you know what a personal loan is and how it works, why wait? Login to your digibank Savings Account and apply for a Personal Loan right away. If you do not already have one, apply here to open a Savings Account with digibank and start your banking journey with us.

Get low-interest, instant personal loans in seconds with digibank by DBS.

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