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Personal Loan Overview​

What's a Personal Loan?

A loan used to cover a number of personal expenses may be known as a Personal Loan. A Personal Loan happens to be an unsecured loan, by way of which you can borrow money for personal expenses depending on interest rates, processing fees, the amount you seek, and the repayment terms.

This loan, also known as a consumer loan can be used as a multipurpose borrowing to meet immediate requirements. Such a loan can be taken for home renovation, car repair, vacation expenses, marriage expenditure, or any other immediate expense the lender would be willing to approve depending on your credit score, repayment history, income, and other such important criterion. Borrowed as an initial lump sum, you pay a lower interest rate along with the principal sum over a predetermined period.

Make sure to plan your finances and budget before applying for a personal loan.

When can you opt for a Personal Loan?

  2. You can opt for a Personal Loan when you have an emergency at hand, or require some immediate upfront funds to fulfill pressing and urgent needs. Banks, Non-Banking Financial Institutions, and Lenders offer Personal Loans for almost every requirement include:
  1. Marriage Expenses
  2. Home Renovation and Repair
  3. Travel, Holiday, or Vacation Expenditure
  4. Medical, or Medical Emergency Expenses
  5. Financing Debt Consolidation
  6. Education, or Higher Education Expenses
  7. Financing Auto Repair
  8. Festival Expenditure
  2. You can opt for these financing options for your immediate and pressing needs since approvals are quick and easy, and documentation requirements are at a minimum

Personal Loan Eligibility

1 . Age

When you apply for a personal loan, your age becomes an important criterion as a measure of your ability to repay the loan. Ordinarily, a lending institution will not deny you a loan if you are a salaried person aged between 21 to 58 years. If you are a self-employed businessman, or a businesswoman, or a professional, your age must be between 25 to 65 years.

2. Employment

If you are a salaried individual, you must be employed by an MNC, a Public Limited Company, or a Private Limited Company. Other than this, if you are a self-employed person, a professional, or a businessman, you too are eligible to apply for a personal loan.

3. Term of Employment

Your term or period of employment becomes a measure of your reliability to repay a loan in time when you look for a personal loan. If you have been changing jobs frequently, this may make the lending institution think twice. Generally, loans are sanctioned to those who have at least two years of work experience, and one year with the current employer. Likewise, self-employed professionals must show a minimum of 3 years of experience for loan approval.

4. Income

The minimum monthly income criterion for approval of your personal loan varies from institution to institution, which starts from Rs. 20,000 per month upwards.

5. Residence

If you are planning to apply for a personal loan to fund your requirements, you must be a Resident Citizen of India.

6. CIBIL Score

Like other credit information bureaus, Credit Information Bureau India Limited or CIBIL collects financial data pertaining to individuals to determine a Credit Score that ranges from 300 to 900. When you choose to apply for a personal loan, remember every institution considers your CIBIL Score as the most important measure of your creditworthiness. Your CIBIL Score must be at a minimum of 700. A higher score empowers you to negotiate a loan with the best terms and conditions for yourself.

Personal Loan - Documentation

  What Documents do you require for Personal Loan Approval?

 Your documents form the basis your loan approval. With the number of loan applications awaiting approval at the lenders' office, clear and precise   documentation improves the chances of your loan being approved faster. Documents that you may be asked to furnish along with your application   are listed below.

 1. Proof Age

 For a Personal loan, you are required to furnish one or more document to prove your age. Following are the documents generally required by most lending    i institutions.

  • Birth Certificate
  • Passport
  • Aadhaar Card
  • Voter ID
  • PAN Card

2. Residence or Address Proof

 To prove your residency, or resident status, you may be required to furnish one or more the following documents.

  • Aadhaar Card
  • Passport
  • Electricity Bill
  • Telephone Bill
  • Ration Card

3. Employee ID Card 

If you are a salaried person, some lending institutions may ask you for a document pertaining to your employment. This would mean that you are required to furnish your Employee ID Card as proof.

4. Proof of Income

 You are required to furnish documents related to your income depending on your occupation. This proof of income document depends on the lender.

  • a. Salary Slips
  •  (If you are salaried person, Salary Slips are a proof of income. Depending on institution to institution, you may require to furnish minimum 2 months Salary Slips as proof.)

  • b. Bank Statements
  •  (Generally, institutions require Salaried Bank Account Statements of previous 3 months for loan approval.)

  • c. Income Statements
  • (Some institutions require a person to furnish an Income Statement as proof of income depending on the nature of your occupation.)

 5. Tax

  Approval of your loan requires that a tax paid document be furnished. This may differ from person to person and lender to lender.

  • a. Form 16
  • (A Salary TDS Certificate or Form 16 certifies that you are a salaried individual whose employer deducts tax from his employee's salary. This document acknowledges that tax has been deducted, and deposited with the Income Tax department.)

  • b. Latest Income Tax Returns
  • (This document proves that you have paid your income tax. Some lenders insist on latest income tax returns..)

6. Credit Report

Credit Information Bureaus collect information about an individual's financial status with records of payments, settlements, dates, and other information that determine creditworthiness. These records form a Credit Report, which you have to furnish when you look for a personal loan. Most of the lending institutions in India ask you for your CIBIL Score along with your CIBIL Credit Report.

 Online, there are many lenders, and the documents required differ from lender to lender. These mandatory documents along with a statutory number   of photographs need to be furnished along with your personal loan application for approval. Once approved, a duly signed agreement copy will be   sent to you.

 You then need to provide a Standing Instruction Request / ECS Mandate Form, and security deposit cheques to complete the formality. ECS stands   for Electronic Clearance Service. Likewise, an ECS Mandate gives the authority to the clearinghouse to debit your monthly EMI from your bank   account, and credit the same into your loan account, or lenders account on a fixed predetermined date.

Personal Loan Balance Transfer

Offers you various options to choose from, for a Personal Loan Balance Transfer, which allows you to take advantage of better and lower interest rates, and better loan periods of tenures. A personal loan balance transfer offers you the opportunity to transfer the total outstanding amount of your personal loan from your present lender, to a new lender of your choice who offers you better terms and conditions, and facilities to profit from such a process.

A Personal Loan Balance transfer does not require any security or collateral when you transfer a personal loan from one bank to another. Your current lender will charge you a foreclosure or prepayment charge stipulated in your loan agreement. In the course of the transfer, your new lender may charge processing fees and stamp duty on your loan agreement, if applicable.

If you are dissatisfied with your current lender, and your relationship does not seem right, you can choose from a host of options offered by RA Capital. However, before choosing the right alternative, evaluate the offerings based on not only interest rates, and loan tenures, but also look for hidden costs such as processing fees, and other charges that increase the cost of your personal loan. Before taking a balance transfer decision, also consider the lender’s reputation and compatibility with your service expectations.


Eligibility Criteria

RA Capital offers you a range of lenders who offer you a loan balance transfer facility, and the eligibility criteria may vary accordingly. However, the basic criteria such as your repayment capacity or creditworthiness, etc., are the same, some of which are discussed in brief below. You may use RA Capitals Personal Loan Eligibility Calculator to determine your eligibility for a loan balance transfer.

  • 1. Age
    • Salaried: 21 years to 60 years of age
    • Self Employed: 21 years to 60 years of age
  • 2. Employment

    • Salaried: Employee of any Private, Public Company, or Public Sector Undertaking with 1 year to 3 years of experience, and 1 year with Current Employer
    • Self Employed: Person with Income as Stipulated by the Lender with 3 years of Experience
  • 3. Income
    • Salaried: Minimum Rs. 15,000 for Mumbai, or Delhi residents, and Minimum Rs. 20,000 for the rest of India
    • Self Employed: Turnover of Minimum Rs. 24,00,000, and differs for Professional and Non-Professionals
  • 4. Other
    • You need to have a Credit Score of a minimum 750
    • Your current outstanding loan amount must be at least Rs. 50,000 to initiate the Balance transfer process
    • You must have a clean record of 12 EMI payments

Documents Required for Loan Balance Transfer

A Lender carries out credit-worthiness assessments on the basis of the documents submitted on the application. The Personal Loan Balance Transfer process will only take place after such verification. Here are some common documents that you may be required to produce in case you opt for a Personal Loan Balance Transfer.

Documents Required

Signed Application Form

  • Application Form


  • Passport Size Photographs

Photo Identity Proof/ Age Proof

  • PAN Card
  • Driving License
  • Passport
  • Voter ID
  • Aadhaar Card

Residence or Address Proof

  • Aadhaar Card
  • Passport
  • Latest Landline Telephone Bill
  • Latest Electricity Bill
  • Rent Agreement

Salaried Individuals

If you are a salaried person, you will need to provide the following documents along with the other common documents.

  • 6 Months Bank Statement
  • 3 Months Salary Slip
  • Statement of Current Personal loan from Lender

Self Employed Individuals

If you are a self-employed person, you will need to provide the following documents along with the other common documents.

  • PAN Card / GST Number
  • 3 Years Balance Sheet with Profit and Loss Statement
  • Individual and Business 6 Months Bank Statement
  • Statement of Current Personal loan from Lender

Balance Transfer Charges: 


When you choose to transfer the outstanding balance of your existing personal loan, you will have to pay a few charges depending on the bank or NBFC you’ve taken the loan from. Your current lender will charge you an amount when you transfer a personal loan to another bank, and the new lender will charge you another amount for processing your personal loan balance transfer. The charges other than personal loan balance transfer interest rate chargeable in brief are as follows.