Understand documents, repayment capacity, credit factors and the total cost of a Personal Loan before applying.
1. What is a Personal Loan?
A Personal Loan is generally an unsecured loan provided by a bank or NBFC for eligible lawful personal requirements. Because property or another asset is normally not offered as security, the lender commonly assesses the applicant’s income, employment or business stability, existing obligations, credit history and overall repayment capacity.
Hayanav Financial Services does not directly sanction or disburse loans. Final eligibility, loan amount, pricing, sanction and disbursement are determined solely by the respective lender after assessment.
2. Common purposes
A Personal Loan may be considered for eligible requirements such as:
- Medical or family expenses
- Education-related expenses
- Marriage expenses
- Travel or planned purchases
- Home renovation or other home-related personal expenses
- Debt consolidation or balance transfer, where an appropriate lender facility is available
- Other lawful personal purposes accepted by the lender
3. General eligibility factors
Lenders may consider:
- Net monthly income
- Employment or business stability
- Employer, profession or business category
- Existing EMIs and other fixed monthly obligations
- Credit history and repayment behaviour
- Age and eligible location
- Requested loan amount and tenure
- Recent credit applications and enquiries
- Internal lender policy and verification results
Meeting general eligibility conditions does not guarantee approval.
4. Documents to prepare
Salaried Applicants
- PAN and accepted identity/address proof
- Recent salary slips
- Recent salary-account bank statements
- Form 16 or Income Tax Return, where required
- Employment proof or employee ID, where required
- Existing loan and EMI details, where applicable
- Any additional documents requested by the lender for assessment
Self-Employed Applicants
- PAN and accepted identity/address proof
- Business registration or professional-practice proof
- Recent personal and business bank statements
- Income Tax Returns with computation of income
- Profit and Loss Account and Balance Sheet
- GST returns, where applicable
- Business-vintage proof
- Existing loan and EMI details, where applicable
- Any additional financial or business records requested by the lender
5. Important Personal Loan terms
Fresh Loan
A new Personal Loan application made by an applicant. Approval is subject to the lender’s independent assessment.
Balance Transfer
Transfer of an eligible existing loan outstanding from one lender to another lender, generally to obtain different pricing, tenure or repayment terms. Compare the total cost, applicable charges and remaining tenure before transferring.
Rate of Interest
The rate charged on the outstanding loan amount. The offered rate may depend on credit profile, income, obligations, loan amount, tenure and lender policy.
EMI
Equated Monthly Instalment normally includes principal and interest payable every month. A lower EMI does not always mean a cheaper loan: extending tenure may reduce EMI but increase total interest.
Tenure
The period over which the loan is repaid. Available tenure differs according to the lender, product and applicant profile.
Processing Fee
A charge that may be collected by the lender for processing the application. Verify whether taxes or other permitted charges are additional.
APR and Total Cost of Borrowing
The disclosed annualised cost helps explain the overall borrowing cost. Review the Key Facts Statement and do not compare loans using only the advertised interest rate.
Net Disbursal
The amount actually credited after applicable and properly disclosed deductions. Understand every deduction before accepting the loan.
Pre-closure or Foreclosure
Full repayment before the original tenure ends. Availability, procedure and charges depend on loan terms, lender policy and regulatory requirements.
Part-payment
An additional payment towards outstanding principal. Minimum amount, frequency and charges may vary according to lender terms.
FOIR
Fixed Obligations to Income Ratio indicates how much eligible monthly income is committed towards fixed financial obligations.
Key Facts Statement
A document containing important loan information such as sanctioned amount, interest or APR, repayment schedule and applicable charges. Read it carefully before accepting the loan.
If eligible monthly income is ₹1,00,000 and applicable monthly fixed obligations are ₹35,000, the indicative FOIR is 35%.
Acceptable FOIR is not the same for every lender or applicant. Calculation methodology and acceptable limits depend on lender policy, income profile and other assessment factors.
6. Understanding credit score and credit report
A credit score is one of the inputs a lender may use when assessing a loan application. Consumer credit scores commonly use a range such as 300 to 900, depending on the credit information company and report type. A higher score alone does not guarantee approval.
Major credit information companies operating in India include:
- TransUnion CIBIL
- Experian
- Equifax
- CRIF High Mark
Credit profile may be influenced by:
- EMI and credit-card payment history
- Days Past Due or reported repayment delays
- Credit utilisation
- Number and frequency of recent credit applications
- Existing unsecured and secured credit exposure
- Settled, written-off, overdue or restructured accounts
- Age and mix of credit accounts
- Accuracy of information reported by lenders
- Credit information is updated based on reporting received from lenders; every score is not necessarily updated on the same fixed date.
- If an account or repayment entry appears incorrect, raise a dispute through the concerned credit information company and/or lender using the official process.
- Avoid agents promising an instant score increase, deletion of genuine repayment history or guaranteed loan approval.
7. Charges and repayment checks
Before accepting a Personal Loan, check:
- Sanctioned amount
- Net amount to be disbursed
- Interest rate and APR
- EMI amount
- Repayment start date
- Number of instalments
- Total repayment amount
- Processing fee and applicable taxes
- Late-payment or penal charges
- Bounce charges
- Pre-closure and part-payment conditions
- Insurance or other add-on products, if any
- Cancellation or cooling-off provisions, where applicable
- Grievance contact of the lender
8. Practical pre-application checklist
- Decide the actual amount required.
- Calculate an affordable EMI.
- List all existing EMIs and fixed obligations.
- Review the latest credit report.
- Correct genuine reporting errors through official channels.
- Compare APR and total repayment, not only interest rate or EMI.
- Check processing, pre-closure, part-payment and late-payment charges.
- Read the Key Facts Statement and sanction terms.
- Submit documents only through a verified process.
- Never share OTPs, PINs, CVVs, passwords or net-banking credentials.
- Keep copies of the application, KFS, sanction communication and repayment schedule.
- Remember that the lender independently decides approval and disbursement.