What is a Personal Loan? Definition, Benefits & Uses
These days, most aspiring borrowers look to apply for Personal Loans to cover their big-ticket expenses. One major reason for the growing popularity of Personal Loans is that these are unsecured loans that do not require any asset as collateral, and their application and processing time is quick, as is the case here at Hero FinCorp. We offer seamless online Personal Loans in minutes based on minimal monthly salary requirements, with no restrictions on how you use your money.
If you’re still asking, “What are Personal Loans?” - Here's everything you need to know.
What is a Personal Loan? Meaning & Definition
Personal Loans are collateral-free funding options that financial institutions sanction based on an applicant’s credit history and repayment capacity. Also known as consumer loans, they are multi-purpose loans that one can borrow to meet immediate needs. Whether an individual needs funds for a wedding, holiday, home renovation, education, or medical emergency, a Personal Loan can be a reliable financing instrument to source immediate funds.
Types of Personal Loan
You can get a Personal Loan based on your specific requirement online. Here are the different types of Personal Loans offered by Hero FinCorp:
- Personal Loan for Medical Emergency
- Personal Loan for Home Renovation
- Personal Loan for Travel
- Personal Loan for Education
- Personal Loan for Wedding
- Personal Loan for Government Employee
- Personal Loan for Doctors
- Personal Loan for Self-employed
- Personal Loan for Consumer Durables
- Personal Loan for Mobile
- Personal Loan for Chartered Accountants
- Personal Loan for Corporate Employees
- Personal Loan for Teachers
- Personal Loan for Defence Personnel
What are the Uses of Personal Loans?
Hero FinCorp’s Personal Loans are multipurpose loans, they require no fixed purpose to be stated for application. Rather, aspiring borrowers can use them for almost any requirement. Some possible uses of Personal Loans are:
- You can use a personal loan for travel for various expenses, including visa fees, airfare, hotel accommodation, sightseeing, shopping, adventure activities, etc.
- You can get a personal loan for wedding to manage various expenses, including venue, decorations, catering, photography, wedding outfits, gifts, invites, etc.
- Handle your home renovation expenses, including interior decoration, urgent home repairs, kitchen remodeling, bathroom renovation, tile or roof replacement, landscaping, etc., with a personal loan for home renovation.
- You can utilise a personal loan for medical emergency for healthcare-related expenses like surgery, therapy, IVF, cosmetic or dental procedure, medicines, medical equipment, rehabilitation, after-care, etc.
- Upgrade your qualifications with a personal loan for education. Handle expenses like admission and tuition fees, lodging, study material, educational equipment, visa fees, etc.
- Use a personal loan for consumer durable to buy items like electronics, home appliances, and furniture, including TVs, refrigerators, and smartphones.
Owing to their flexible usage, our Personal Loans are one of the most preferred funding options available to people: for both immediate or planned requirements. Moreover, our personal loan interest rates are reasonable, and enable our partners to pay off their loans conveniently in easy, affordable EMIs.
Also Read : How to Get an Instant Personal Loan from Hero FinCorp – Eligibility, Rates & Benefits
Benefits of Taking a Personal Loan
Borrowers get more than just easy access to Personal Loans, meaning they also get a slew of additional benefits. Here are a few of them.
No Collateral or Security Requirement
Our Personal Loans are unsecured, they do not require any asset as collateral. We offer them based on the applicant's repayment capacity and credit history.
Minimal Documentation Needs
A lot of people avoid applying for Personal Loans due to their lengthy documentation requirements. However, here at Hero FinCorp, we approve Personal Loans with minimal documents, completely online for each borrower’s convenience.
Quick Disbursal
If your application is well documented and you meet our easy eligibility criteria: it’ll take just a few minutes for your loan application’s approval, and disbursal. If the
Competitive Interest Rate
One of the key tips to get low interest rates personal loans is to choose lenders like Hero FinCorp, where interest rates are competitive and remain constant throughout the loan tenure. This helps borrowers plan their EMIs in advance.
Flexible Loan Tenure
Personal loans offer flexible loan terms and give borrowers the flexibility to choose an EMI plan according to their repayment capacity. Hero FinCorp offers maximum and minimum tenure for personal loans of 12 months to 36 months. You can use our online personal loan EMI calculator to pick the right tenure choice with budget-friendly EMIs.
No Usage Restrictions
Unlike other loans, Personal Loans at Hero FinCorp have no usage restrictions, and borrowers can use the money to meet almost any urgent expense or fulfil any long-standing aspiration in life.
Also Read : Get a quick and easy instant loan online
Eligibility Criteria For Personal Loans
Since our Personal Loans are collateral-free, they are somewhat of a calculated risk for us. That is why we must also do our own due diligence before approving loans. Amongst the factors we consider, an applicant’s financial stability is most important. Personal loan eligibility also depends on monthly income, financial obligations, credit history, and some other things.
Our eligibility conditions include age profiles and income requirements. The applicants must be 21 to 58 years of age to qualify for a Personal Loan from us. Moreover, salaried employees and self-employed professionals must earn at least Rs 15,000 per month to get approval. If you meet these criteria, you may also be eligible for an instant personal loan for Rs 30K salary, with quick approval and disbursal tailored to your income level.
Let’s look at Hero FinCorp’s eligibility for personal loans in summary:
Citizenship
You should be a citizen of India.
Work Experience
Six months for salaried individuals and 2 years for self-employed individuals.
Monthly Income
You should have a minimum income of Rs 15,000 monthly.
Age
You should be between 21-58 years.
List of Documents Required for Personal Loans
Here is the list of documents needed to present when availing of a personal loan from Hero FinCorp:
| Documents Required For Salaried Employee | Documents Required For Self Employed |
|---|---|
| Proof Of Photo Identity: Driving Licence, Passport, PAN Card, Aadhaar card | Proof Of Photo Identity: Driving Licence, Passport, PAN Card, Aadhaar card |
| Mandatory Documents: Filled Loan Application Form, Passport Size Coloured Photograph | Mandatory Documents: Filled Loan Application Form, Passport Size Coloured Photograph |
| Proof of Income: Three Months’ Salary Slip, Six Months’ Bank Account Statement, Form 16 | Proof of Income: Last Six Months Bank Statement, ITR for the Last Two Consecutive Years |
| Job Continuity Proof: Appointment Letter From the Current Employer | Proof of Residence: Maintenance Bill, Utility Bill, Property Documents, Rent Agreement |
| Proof of Residence: Driving Licence, Passport, Aadhaar Card, Utility Bill | Proof of Business Existence: Copy of Tax Registration, Shop Establishment Proof, Company’s Registration Certificate |
Also Read : What are the Documents Required for a Personal Loan
Understanding Personal Loan Interest Rates
The Personal Loan interest rates vary between loan offers, depending on factors such as the applicant's income, credit history, current financial obligations, and repayment term selected. For those wondering how to get a personal loan with low income, understanding these factors is crucial. Along with the interest rates, applicants should also consider additional charges like processing fees and documentation charges. Each loan EMI includes both the Personal Loan principal amount and the interest. Borrowers can use our free Personal Loan EMI calculator to select an ideal repayment tenure and find the most affordable EMIs to manage their loan effectively.
| Fees & Charges | Amount Chargeable |
|---|---|
| Interest Rate | Starting from 1.58% per month |
| Loan Processing Charges | Minimum 2.5% + GST |
| Prepayment Charges | N/A |
| Foreclosure Charges | 5% + GST |
| EMI Bounce Charges | Rs 350/- |
| Interest on Overdue EMIs | 1-2% of the loan/EMI Overdue Amount Per Month |
| Cheque Bounce | Fixed Nominal Penalty |
| Loan Cancellation | 1. Online loan app does not charge any cancellation charges 2. Interest amount paid is non-refundable 3. Processing charges are also non-refundable |
Maximum Amount an Applicant Can Borrow
The maximum loan amount an individual can borrow from us is Rs 5 Lacs. However, this depends on their income, profession, and eligibility assessment.Generally, loans are sanctioned so that EMIs do not exceed 30–40% of the applicant’s monthly income. Thus, someone earning ₹24,000 per month can get a personal loan on 24000 salary depending on their obligations and creditworthiness. Business owners and self-employed professionals get loan approval based on their profits earned, while salaried professionals get it based on their salary and current financial liabilities.
How to Repay a Personal Loan?
The Personal Loan repayment process takes place in monthly EMI's. Each instalment includes part of the principal amount and the interest charged. A lot of lending institutions set standing instructions against the borrower’s bank account and deduct the monthly EMI amount on a fixed date. Additionally, borrowers can repay the borrowed amount before the term ends, known as loan prepayment or foreclosure.
Now that you understand what Personal Loans mean, compare loan offers such as payday loan vs personal loan and apply online to meet any planned or urgent expenses. With the increasing popularity of Personal Loans among consumers, fund a large purchase with a loan and repay it in easy EMIs spread across a conveniently affordable loan term. You can also explore quick and easy loans for pensioners in India to meet specific financial needs post-retirement.
How to Get a Personal Loan: Step-by-Step Process
Here is the stepwise process to apply for a personal loan with Hero FinCorp:
- Visit the Hero FinCorp website or install the personal loan app
- Go to the Personal Loan page and click ‘apply now’
- Enter your mobile number and verify with the OTP received
- Choose the loan amount you need
- Verify your KYC details to check income eligibility
- Click ‘Submit’ to complete your application
Conclusion
A Personal Loan is a convenient way to get money for any planned or unplanned expenditures. Whether it is a wedding, education or a medical emergency, you can borrow from Hero FinCorp with minimal documentation, flexible repayment terms and competitive interest rates. The application process is simple. You can apply online and get approval in 10 minutes. So, the next time you're in need of urgent cash, apply for a Personal Loan online and get up to Rs 5 Lakh without collateral and repay in monthly instalments.
Frequently Asked Questions
1. What is a personal loan processing fee?
A personal loan processing fee is a one-time charge levied by financial institutions to cover the administrative costs of processing your loan application. This fee is typically deducted from the loan amount before disbursement.
2. How does the Interest Coverage Ratio affect loan approval?
Lenders often look at the Interest Coverage Ratio formula when approving loans. A high ratio shows the company’s ability to service its interest payments, improving its chances of securing a loan. A low ratio may indicate high risk, making loan approval difficult.
Disclaimer: The information provided in this blog post is intended for informational purposes only. The content is based on research and opinions available at the time of writing. While we strive to ensure accuracy, we do not claim to be exhaustive or definitive. Readers are advised to independently verify any details mentioned here, such as specifications, features, and availability, before making any decisions. Hero FinCorp does not take responsibility for any discrepancies, inaccuracies, or changes that may occur after the publication of this blog. The choice to rely on the information presented herein is at the reader's discretion, and we recommend consulting official sources and experts for the most up-to-date and accurate information about the featured products.
About Hero Fincorp
Hero Fincorp offers a wide range of financial products including Personal Loans for personal needs, Business Loans to support business growth, Used Car Loans for purchasing pre-owned vehicles, Two-Wheeler Loans for bike financing, and Loan Against Property for leveraging real estate assets. We provide tailored solutions with quick processing, minimal paperwork, and flexible repayment options for smooth and convenient borrowing experience.
