A personal loan is an unsecured loan.
It is a loan type that does not need collateral and a financial institution offers this loan with minimal documentation. It helps to meet your current financial needs. There is no bar on the end use of a personal loan.
You can use it to fund a holiday, pay for unforeseen medical expenses, buy a car, pay for your child’s higher education, and renovate your home. A personal loan can be paid back in equal monthly instalments (EMI’s).
Banks and other financial institutions offering personal loans only look at whether or not you match the eligibility criteria in terms of your age, income, occupation, capacity to pay back the loan, and place of residence.
Usually, banks restrict your loan amount in a manner that it does not exceed 40-50% of your monthly income. However, since personal loans are unsecured loans, they come at comparatively higher interest rates.
You can also jointly avail this loan with a family member such as your spouse.