Unlike a home loan or a car loan, which is meant for a specific purpose, one can take a personal loan to meet a variety of temporary cash-flow problems. Since these loans are not backed by an asset, the rate of interest on them is high.

If you wish to do research about the best personal loan offers, visit a web site such as apnapaisa.com or bankbazaar.com. First, these sites ask you to fill in a number of details: your gross annual salary and take-home salary; whether you already pay EMIs; the type of house you live in (self-owned or rented). The web site then offers the following details: the maximum loan you are eligible for; which banks have the best interest rate offers; the EMI you will have to pay; and the total cost of the loan. You may alter the loan amount and tenure and the web site throws up the corresponding EMI. Another interesting detail they offer is a break-up of the total payout you will make: loan amount, total interest payable, fee, and service tax.

Applying for the loan

To apply for the loan, you have to provide the following information: personal details, residential address, and professional details. You also have to provide a number of documents: proof of age, address, identity, employment, designation, income, bank statement of salary account, and photograph. After filling in these details, you may submit this information at the web site (they don't charge any fee from you) or at the bank.

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