Personal loans are becoming one of the most popular ways for individuals in India to manage unexpected expenses and fund personal goals. But before you apply for it, itâs important to understand what a personal loan really is, how it works, and what to consider to make the most of it.
In this comprehensive guide, weâll explain what a Personal Loan is, break down its key features, eligibility, documents, and interest rates, and show you why taking a personal loan from a trusted NBFC like DMI Finance can be a smart move for your financial journey.
A personal loan is an unsecured loan that individuals can borrow from lenders (Banks & NBFCs) to meet various financial needs without providing any collateral or security. That means you donât need to mortgage property or assets to get a loan.
Unlike home or car loans, which are typically used for specified purposes only, personal loans can be used freely for various purposes, such as medical emergencies, travel, or large purchases.
Knowing how personal loans work helps you borrow the right way.
Here’s a simple breakdown:
DMI Finance personal loans start from âč50,000 and go up to âč5 lakhs, with flexible repayment tenure and zero collateral.
Here are some common ways people use personal loans:
DMI Finance doesnât put any limitation on the usage of personal loan amount; youâre free to use your loan for whatever matters most to you.
Generally, there are only two types of personal loans:
An unsecured personal loan is a type of loan that does not require any collateral or security. This means you donât have to pledge assets like your house, car, fixed deposit, or gold to get the loan. The lender gives you the loan based entirely on your creditworthiness, which is assessed through your income, credit score, employment status, and repayment history. Suppose you apply for a personal loan from DMI Finance. In that case, you donât need to submit any property documents or provide any guarantee.
Though rare, some lenders offer personal loans against security like fixed deposits, insurance policies, or gold. These are called secured personal loans and usually offer lower interest rates.
Best for:
Individuals who are not eligible for an unsecured loan can apply for a secured loan instead. You can click here to take a loan against property.
Also Read: How to maintain a healthy credit score?
| Feature | Details |
| No Collateral | Unsecured loan â no asset required |
| Flexible Loan Amount | âč50,000 to âč5 Lakhs at DMI Finance |
| Fixed Monthly EMIs | Consistent, predictable payments |
| Customisable Tenure | 12 to 48 months |
| Easy Disbursal | Often within 24â48 hours after approval |
| Digital Process | Apply, verify & track loans online |
Eligibility criteria can be different, but here’s what most NBFCs, including DMI Finance, look for:
| Criteria | Requirement |
| Age | 23 to 52 years |
| Monthly income | Minimum âč25,000 |
| Employment | Salaried or self-employed |
| PAN & Aadhaar linking | Mandatory |
| Credit score for a personal loan | 700+ |
Youâll need the following documents:
DMI Finance uses a secure digital KYC process, reducing paperwork and speeding up your application.
| Fee Type | General Range |
| Interest rate | 14.25% to 24.90% p.a. |
| Processing fee | Up to 3.95% of the loan amount |
| Prepayment charges | Up to 4% |
| Late payment fee | Up to âč1200 or % of EMI |
Your application will be submitted for review, and youâll be notified of approval shortly.
Before borrowing, compare these factors:
DMI Finance is an NBFC registered with the Reserve Bank of India (RBI), offering personal loans through a transparent application process and timely disbursal, in line with regulatory guidelines.
| Benefit | Description |
| Fast Approval | Hassle-free first process saves time |
| Easy Documentation | Digital KYC, no paperwork |
| Custom Loan Amounts | Starting âč50,000, up to âč5,00,000 |
| No Hidden Fees | Transparent charges and terms |
| Trusted & Secure | RBI-registered, data-secure platform |
A personal loan is one of the most accessible financial tools today, especially with digital NBFCs like DMI Finance making the process fast, secure, and flexible.
Whether youâre planning a wedding, renovating your home, or handling an emergency, knowing how personal loans work will help you borrow smart and repay comfortably.
1. What is a personal loan, and how does it work?
A personal loan is an unsecured loan that does not require any collateral. You borrow a fixed amount from a lender and repay it through monthly EMIs over a set period. The loan is approved based on your credit score, income, and repayment capacity.
2. What are the main features of a personal loan?
Key features of a personal loan include:
3. Who can apply for a personal loan?
Anyone who meets the lenderâs eligibility criteria is eligible to apply. At DMI Finance, you must:
4. How much personal loan can I get?
Loan amounts vary by lender. At DMI Finance, you can get a personal loan ranging from âč50,000 to âč5,00,000, depending on your income, credit score, employment type and repayment ability.
5. What documents are required for a personal loan in India?
The standard documents include:
DMI Finance accepts digital document submissions, making the process fast and paperless.
6. How can I apply for a personal loan online?
You can apply online through the DMI Finance app.
7. Can I prepay my personal loan?
Yes. Many NBFCs, including DMI Finance, allow loan prepayment.
8. Does taking a personal loan affect my credit score?
Yes, your personal loan is reported to credit bureaus. If you pay your EMIs on time, it can have a positive impact on your credit score. Missing payments will lower it.
9. What happens if I miss an EMI payment?
Missing an EMI can lead to:
Always set reminders or auto-debit to avoid this.
Also Read: Top factors that affect your credit score?
10. Can I take more than one personal loan in India?
Yes. You can take multiple personal loans as long as you meet the lenderâs eligibility and repayment capacity. DMI Finance may allow additional loans after 6 successful EMI payments.
11. What are the benefits of taking a personal loan from DMI Finance?
12. Is it safe to take a personal loan from DMI Finance?
Yes. DMI Finance is an RBI-registered Non-Banking Financial Company (NBFC) that adheres to strict data security and regulatory guidelines for lending.
