A personal loan is an unsecured loan from a bank or NBFC that you can use for almost any legitimate personal need — a medical bill, a wedding, home repairs, travel or consolidating expensive credit-card debt. Because you don't pledge any collateral, the lender relies on your income, job stability and credit history to decide.
How a personal loan works
You borrow a fixed amount and repay it in equal monthly instalments (EMIs) over a fixed tenure. Interest is usually charged on a reducing balance, so each EMI contains less interest and more principal as time passes.
Through Kredistar's lender panel, personal loans typically range up to ₹40 lakh, with repayment tenures from 3 to 60 months, depending on the lender and your profile.
Who is eligible?
Each lender has its own policy, but most look for:
- Age between 21 and 58 (salaried) or 25 and 65 (self-employed)
- A steady monthly income — many lenders start around ₹20,000 net
- At least a year in your current job or business
- A healthy credit score — 750 and above usually gets the best rates
- A manageable FOIR (fixed obligations to income ratio): your total EMIs, including the new loan, should generally stay under 40–55% of your income
Documents you will need
- PAN and Aadhaar
- Last 3 months' salary slips, or ITRs for the self-employed
- Bank statements for the last 3–6 months
- A recent photograph
What a personal loan really costs
The interest rate is only part of the cost. Lenders may also charge a processing fee (commonly 1–4% of the loan amount) plus 18% GST, and there may be stamp duty and other charges.
That is why you should compare the APR (Annual Percentage Rate), which combines interest and fees into one annual figure. RBI requires lenders to give you a Key Fact Statement (KFS) showing the APR and every charge before you sign.
| Example | Amount |
|---|---|
| Loan amount | ₹5,00,000 |
| Tenure | 48 months |
| Interest rate | 36.5% p.a. (maximum, reducing balance) |
| Processing fee (4% + GST) | ₹23,600 |
At the maximum APR on our panel this works out to a much higher total cost than a typical offer — which is exactly why comparing lenders matters. See our Rates & Disclosures page for the full worked example.
Mistakes that raise your rate
- Applying to many lenders at once. Every formal application creates a hard enquiry on your credit report. Several in a short period look like credit hunger.
- Ignoring the fee. A slightly lower rate with a much higher fee can cost more overall.
- Picking a long tenure for a short need. Lower EMIs, but far more interest.
- Not checking the lender. Only borrow from banks and NBFCs regulated by the RBI — and never pay an "advance fee" to get a loan approved.
How Kredistar helps
Kredistar is a DSA and loan aggregator, not a lender. We look at your profile, suggest the lenders most likely to approve you at a good rate, and handle the paperwork with them — at no cost to you. Check your eligibility or apply in two minutes.
This article is for general information only and is not financial, legal or tax advice. Loan terms are set by the lender. Kredistar Finserv Pvt. Ltd. is a DSA and loan aggregator, not a lender.