Personal Loan in 2026: Complete Step-by-Step Guide
This guide will help you navigate the process of obtaining a personal loan in 2026.
In today’s world, taking a personal loan can be an inexpensive and beneficial option for you to meet your personal needs, whether you are salaried or a businessman, since it is an unsecured loan that does not require any guarantee. After completing the documentation and verification process, you can easily apply for a personal loan.
If you need money urgently, you can easily fulfil your needs by choosing an instant or pre-approved personal loan, which can help with various financial requirements such as medical expenses, home renovations, marriage, or education.
What is a Personal Loan?
Personal Loan in 2026: Complete Step-by-Step Guide
A personal loan is an unsecured loan. The bank grants a personal loan to any user without requiring any collateral. You don’t need to keep anything as collateral, like your land paper, which is kept as a guarantor on the home loan. Until you deposit the full amount of the home loan, the bank retains ownership of your land, flat, or house; however, this ownership can later be transferred to another party by obtaining your NOD.
A personal loan is granted based on your salary or monthly income, and it is determined by your credit score; you receive a personal loan according to your eligibility.
Why should you take a personal loan?
You do not need any different documents to get a personal loan; you can easily get one based on all the documents related to your income, address, and identity proof.
A personal loan can easily help you meet various financial needs, whether they are related to medical bills, outstanding credit cards, marriage, home renovation, or travel. These days, you can easily obtain various personal loans, including instant loans and pre-approved loans.
What are the types of personal loans?
Types of Personal Loans:
- Salary Personal Loan – This type of loan is provided to employees whose monthly income, or salary, is the basis for repayment.
- Self-Employed Personal Loan – This personal loan is given to the self-employed, who have a business of their own. So such people are given a self-employed personal loan on the basis of their CIBIL score and financial turnover.
- Top Up Personal Loan – A top-up personal loan means that you have already taken a loan. You can either take out an additional personal loan to increase your existing loan amount or apply for an entirely new loan.
- A Debt Consolidation Loan allows you to combine all your outstanding loans and credit card debts into a single loan, simplifying your payments and potentially reducing your interest rate.
What is the eligibility criteria for a personal loan?
There may be slight variations in the eligibility criteria of different banks, but mainly it depends on your CIBIL score and your monthly income. The primary eligibility requirements are as follows:
- Age: Should be between 21 and 60 years.
- Employment Status: You can be salaried or self-employed.
- Monthly Income: Must be at least ₹15,000 to ₹30,000 per month.
- CIBIL Score: Must be at least 700 or above.
What are the documents required for a personal loan?
- Identity Proof: Aadhar Card, PAN Card, Valid Passport, Voter ID, etc.
- Address Proof: Utility Bill, Aadhar Card, Passport, Driving Licence, etc.
- Salaried employees: Salary slip, Form 16, and bank statement are required.
- For self-employed individuals, the required documents include ITR details, a bank statement, Udyam registration details, and a passport-size photograph. For example, two Cummins are needed.
Note: If you already have loan liability , then it should not be more than 60% or 70% of your monthly income, nor can your loan be rejected due to payment overload.
What is the right way to apply for a personal loan?
Let’s see the application process step by step for a personal loan:
- The first thing you need to do is determine the loan amount you require.
- You go to the website of any bank, such as HDFC Bank, SBI, or any other bank that offers personal loans, and you calculate your estimated loan amount with an online calculator.
- The rate of interest on personal loans at all banks can normally range from 10.25 to 35% per month.
- By the way, the rate of interest also depends on your CIBIL score, loan amount, and loan tenure; if your CIBIL score is not good, then the loan amount also decreases, and the rate of interest can also be high.
- Always before taking a personal loan, you must check the loan amount, interest rate, etc. from the Personal Loan Calculator, so it is very important to know how much monthly EMI you will have to pay.
- For better loan offers, contact many banks and discuss and check the rate of interest, processing fees, etc.
- You should compare your bank’s interest rate to those of other banks.
- Whatever loan you take, always try to take it at a reduced rate of interest.
- The reducing rate of interest means that if you initially took a personal loan of ₹ 1,00,000 and have only ₹ 5,000 remaining, you will only need to pay interest on the remaining ₹ 5,000.
What are the things you should compare with other banks while taking a personal loan?
While taking a personal loan, you should keep the following things in mind:
- interest rate
- Processing Fees
- Loan Tenure
- Foreclosure Conditions, or Pre-Payment Options
- Pre-Closure Charges
- If possible, could you deposit some advance money into the account to foreclose the loan?
This flexibility should also be in your personal loan, which also saves you money in the future and makes it very easy for you to deposit the loan.
Steps to Apply for a Personal Loan?
Its process is quite simple. There are two ways to apply for a personal loan: you can choose to apply either online or offline, depending on which method you prefer.
In the offline process, you may need to visit multiple banks, while in the online process, you can obtain all the information from home and contact various banks; however, you will need to complete the evaluation in both cases.
Step 1: Verification Approval Process
- After this, the next step involves verifying your documents and checking your eligibility; following this step, you must complete the video KYC process.
- This means that you have to show your Aadhaar card and PAN card to the bank during video KYC. If all the details of your submitted documents are correct, your personal loan will proceed to the next step.
- Next, the bank will verify your credit history. According to your eligibility, you are given a loan amount sanction, which can take you from 1 to 3 days, although nowadays the process of getting personal loans from most banks is rapid and time-saving.
Step 2: Loan disbursal process: once the approval process for your personal loan is complete, the loan amount is credited or transferred to your registered bank account.
Step 3. Personal loan rate of interest in 2025
- The rate of interest of your personal loan depends entirely on your loan amount and your civil score, although in general, a personal loan can be taken for up to 7 years.
- The interest rate for a personal loan typically ranges from 10% to 35%. However, many applications these days offer personal loans at interest rates as high as 35%.
- Therefore, you always have to take a personal loan only after checking it thoroughly. If your CIBIL score is very good, you can easily obtain the expected loan amount through a personal loan with a low interest rate.
Step 4. How to Calculate a Personal Loan:
- The way to calculate a personal loan is effortless; you can go to the website of any bank according to your convenience and easily open the personal loan calculator there and see the EMI details.
- First of all, you have to enter your loan amount.
- A rate of interest has to be entered, and
- Thereafter, whatever your tenure can be for 5 or 7 years, you have to intern.
- After entering all these details, you will now get an idea of the rate of interest, years, or total EMI.
- For instance, how long will you take a personal loan for, or what will your interest rate be?
- How much EMI do you have to pay every month? (monthly), so you must check these details before applying for a personal loan.
Comparison of offers from India’s top banks for personal loans:
A comparison of the top 13 banks’ personal loan offerings:
Bank Name
|
Interest Rate (P.A.)
|
Processing Fee
|
Loan Limit
|
Tenure
|
Eligibility
|
| State Bank of India | 10.05% to 15.05% | Up to 1.50% | Up to 35 Lakhs | 1-5 Years | Salaried, 21-58 yrs, Min ₹15k income |
| HDFC Bank | 9.99% to 24.00% | Rs. 6,500 + GST | 50,000 to 50 Lakhs | 1-6 Years | Salaried/Self-emp, 21-60 yrs, Min ₹25k income |
| ICICI Bank | 10.45% to 16.50% | Up to 2% | 25,000 to 20 Lakh | 1-6 Years | Salaried, 21-58 yrs, Min ₹17.5k income |
| Axis Bank | 9.99% to 22% | Up to 2% | 50,000 to 40 Lakhs | 1-5 Years | Salaried, 21-60 yrs, Min ₹15k income |
| Kotak Mahindra Bank | 10.99% onwards | Up to 5% | 50,000 to 40 Lakhs | 1-5 Years | Salaried, 21-60 yrs, Min ₹20k income |
| IDFC First Bank | 9.99% onwards | Up to 2% | 30,000 to 50 Lakhs | 1-7 Years | Salaried/Self-emp, 21-60 yrs, Min ₹20k income |
| IndusInd Bank | 10.49% onwards | Up to 3.5% | 1 Lakh to 50 Lakhs | 1-5 Years | Salaried/Self-emp, 21-60 yrs, Min ₹25k income |
| Yes Bank | 10.85% to 21% | Up to 2.5% | 75,000 to 35 Lakhs | 1-6 Years | Salaried/Self-emp, 21-60 yrs, Min ₹25k income |
| Bank of Baroda | 10.40% onwards | Up to 2% | 50,000 to 25 Lakhs | 1-5 Years | Salaried, 21-60 yrs, Min ₹15k income |
| Bank of India | 10.85% onwards | Up to 1% | 50,000 to 20 Lakhs | 1-5 Years | Salaried/Self-emp, 21-65 yrs, Min ₹20k income |
| Punjab National Bank | 10.60% onwards | 0.35% | Up to 20 Lakhs | 1-5 Years | Salaried, 21-60 yrs, Min ₹15k income |
| IDBI Bank | 11% to 15.50% | 1.00% | Up to 20 Lakhs | 1-5 Years | Salaried, 21-60 yrs, Min ₹15k income |
| Bank of Maharashtra | 9.00% p.a. | Up to 1% | Up to 20 Lakhs | 1-5 Years | Salaried, 21-60 yrs, Min ₹15k income |
Charges & Fees Check
- 1. The processing fee can range from 1% to 3% of the total loan amount.
- 2. Foreclosure charges can range from 1 to 5%, and it can vary from one bank to another, although you should always ask for it once while applying for a personal loan.
- 3. The penalty for late payment charges ranges from Rs 500 to Rs 1000 or even more, depending on the day.
Pros and Cons of Personal Loans
Benefits-
- Loans are available instantly and easily.
- No guarantees are needed.
- The EMI amount can be more or less according to your tenure.
- Both online and offline approval processors are available; you can apply according to the method you find more suitable.
Disadvantages-
- There is more interest in comparison to home loans or flexi loans.
- There are many times when taking a personal loan when there are chances of people falling into the debt trap if people are unable to pay the EMI.
- If the payment is not done on time, then the civilian score also has an impact.
FAQs Personal Loans
1. How soon can we get a personal loan?
If your CIBIL score is good and all the necessary documents are ready, then you can get a personal loan within 24 hours.
2. How much salary should be required to take a personal loan?
To get a personal loan, your salary should be at least ₹15,000 to ₹30,000 monthly. However, it also depends on the bank.
3. What should your CIBIL score be for a personal loan?
Your civil score must be 700 or above 700.
4. Can a personal loan be applied for without proof of income?
You can’t get a personal loan without proof of income because it’s an unsecured loan.
Conclusion-
Taking a personal loan can be very helpful for us, and if it is used correctly, you can improve your credit score along with meeting your needs. Before taking a personal loan, you should always discuss the details of the interest rate and any associated charges, such as pre-closure fees and processing fees, with your banker.
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