India's Largest Lending Platform | Fibe (formerly EarlySalary

The main difference between a mortgage loan vs personal loan is simple. A mortgage loan is a secured loan backed by property, while a personal loan is unsecured and can be used for many personal needs. This one decision affects your interest rate, loan amount and repayment period as a borrower.

If you are confused about the difference between personal loan and mortgage, understanding how each option works can help you choose the right loan for your situation.

Understanding Personal Loans

A personal loan is an unsecured loan. You do not need to pledge any assets to borrow money. Approval depends on your credit score, income, employment stability and repayment history.

You can use a personal loan for almost any purpose. This includes medical expenses, travel, home renovation, education or debt consolidation. Since there is no collateral involved, personal loans usually have higher interest rates, but they are approved faster and offer quick access to funds.

Understanding Mortgage Loans

Mortgage loans are secured loans where you use your property as collateral. This is what mainly sets it apart from other types of loans. The loan amount is based on the property’s value, location and overall condition. 

Since an asset backs the loan, mortgage loans usually offer lower interest rates and longer repayment tenures. This makes them a better fit for large funding needs and long-term financial planning.

Comparison: Mortgage Loan vs. Personal Loan

Here is a quick table that highlights the difference between loan and mortgage, so you can compare both options easily.

This table makes it easier to see the difference between personal loan and mortgage and understand how a loan vs mortgage works in real life.

When to Choose Which: Personal loan vs mortgage

Choose a mortgage loan

If you are buying property, need a large amount, want lower interest rates and are comfortable pledging property for a long period.

Choose a personal loan

If you need funds quickly, want flexible usage, do not want to risk any asset and prefer a shorter repayment tenure.

Why Are Personal Loan Rates Higher Than a Mortgage?

This is why mortgage loan vs personal loan interest rates differ:

• Personal loans are unsecured, so lenders take a higher risk
• Higher risk leads to higher interest rates
• Mortgage loans are secured by property
• Lower risk allows lenders to offer lower interest rates

Now that you understand the difference between loan and mortgage, you can decide what works best for you. If a personal loan suits your needs better, consider Fibe’s Instant Cash Loan. You can get up to ₹10 lakhs with quick approval and minimal documentation.

Apply through the Fibe Personal Loan App or website to get started!

FAQs on mortgage loan vs personal loan

Which is better mortgage loan or a personal loan?

Deciding between personal loan vs mortgage loan requires a thorough assessment of several factors. Some of these are: 

• Purpose of the loan
• Availability of security
• Tenure and cost

Is a mortgage loan good or bad?

A mortgage loan is neither good nor bad on its own. It works well if you need a large amount at lower interest rates and are comfortable using property as collateral.

Why does a mortgage loan usually have a lower interest rate than a personal loan?

Mortgage loans are backed by property, which lowers the lender’s risk. Personal loans are unsecured, so lenders charge higher interest rates to cover the added risk. This is one of the key difference between loan and mortgage. 

Can I take both a personal loan and a mortgage loan at the same time?

Yes, you can take both loans together if your income, credit score and repayment capacity allow it.

The RBI guidelines for personal loans set the rules that every bank and NBFC must follow. These guidelines decide how lenders charge interest, verify applications, share loan details and recover EMIs. They exist to keep the borrowing process fair, transparent and safe for every customer. They also protect you from hidden charges and unethical recovery methods. Knowing the rules of RBI for personal loans can help you understand your rights clearly and apply for credit with confidence.

RBI Guidelines for Personal Loan Interest Rate

Here are the guidelines set by the RBI on the interest rate of personal loans:

• Lenders must charge interest on loans and other types of credit in accordance with the guidelines issued by the RBI from time to time.
• The interest on loans at the specified rates must be charged on a monthly basis.
• Lenders must set the interest rates as per the Base Rate by including other customer-specific charges.
• The interest rates must be transparent, consistent and available for supervisory review.
• Each financial institution has one transparent Base Rate, which is determined using any benchmark.
• Lenders can offer loans on fixed or floating rates, even after implementing the Base Rate system.
• If your floating interest rate changes during a reset cycle, you get a few options. You can increase your EMI, extend your tenure or switch from floating to fixed if your lender allows.

RBI Guidelines for Personal Loan Defaulters

The guidelines framed by the RBI in case you default on your personal loan are given below:

• A loan becomes delinquent if payment is late by a few days.
• Lenders allow a 10-15-day grace period for missed EMIs and send regular reminders during this time.
• After the grace period, the overdue period begins and the lender starts applying a late payment fee.
• If you consistently miss your EMI payments, the lender can file a case u/s 138 of the Negotiable Instruments Act of 1881.
• In genuine default cases, lenders should work with you to devise a suitable repayment plan.
• In case of regular non-payment, lenders will involve loan recovery agents by adhering to the RBI guidelines.
• Continued non-payment after the overdue period may result in the loan being declared a Non-Performing Asset (NPA).
• Lenders use various methods, like restructuring the repayment plan, managing cash flow, etc., to recover NPAs.

RBI Guidelines for Financial Institutions 

Here are some of the guidelines outlined by the RBI regarding personal loans to protect your interests: 

• The loan application must include all the necessary information regarding the loan, including the interest rates and fees.
• The financial institution should verify the loan application promptly, within a specified period.
• Banks and other lending institutions should provide acknowledgement receipts for all loan applications.
• The institution offering the loan should contact you without any delay if they need any additional paperwork.
• The lender should communicate the reason for the rejection of loans of less than ₹2 lakhs in writing.
• The institution should inform you about any changes in the terms and conditions well in advance.
• The lending institution cannot discriminate against you on the basis of your caste, religion, sex or other reasons.
• The lender cannot resort to illegal or unethical ways to recover the borrowed amount.
• The lender must give adequate notice for cancellation, recall or request for quicker payments.

Personal Loan Terms

One of the most significant benefits of these loans is that they don’t come with any restriction on the end usage. You can use the funds for anything, such as: 

• Education
• Weddings
• Travel
• Medical treatment
• Home improvement
• Business

However, they do have other restrictions and policies. It is very important for you to read the terms and conditions of a loan before you sign the dotted line. Take a look at some common terms to be aware of.

Qualifying Criteria: Meeting the eligibility terms set by the lender is important to get quick approval on your loan application. Usually, lenders check the following: 

• Your age 
• Your income and employment stability 
• Your credit score 
• Your existing obligations 

Repayment Conditions: While you can choose your tenure, these terms refer to the interest rate applicable to your loan. It also helps you understand whether you will be repaying on the basis of flexible or fixed rates as well as how you will repay:

• Bullet repayment
• Lump sum payment
• EMIs

Foreclosure and Prepayment Policies: This section of terms and conditions informs you about the rules related to making a part-prepayment or foreclosing the loan. This refers to costs related to these facilities.

Applicable Charges: Banks and NBFCs charge processing along with other fees on personal loans. Other applicable charges may include part-prepayment or foreclosure charges, statement charges, EMI bounce charges and more. Read the terms and conditions carefully to spot any hidden charges included in the loan application.    

In conclusion, all RBI-registered lenders follow the mandatory regulations laid down by the central bank. Fibe follows these ethical lending practices and offers an Instant Cash Loan of up to ₹5 lakhs. Download the Fibe Personal Loan App to enjoy quick loan sanctions with a simple application process and minimal paperwork.

FAQs on RBI’s Personal Loans Guidelines

What are the RBI’s loan guidelines?

The Fair Lending Practices Code by the RBI aims to regulate the personal loan segment for transparent and ethical disbursal of loans. These guidelines include:

• Providing comprehensive loan applications with mention of key details about rates and charges
• Time-bound verification and disbursal of loans
• Conveying reasons for rejection of application

The lending policies of all banks and NBFCs need to adhere to the RBI’s personal loan guidelines. 

What is the new rule of RBI for personal loans?

The RBI now requires lenders to give a clear Key Facts Statement, keep your total EMI within 50 percent of your income and offer switching options on floating-rate loans. These rules make borrowing more transparent and easier to understand.

If I switch from floating to fixed interest rate, what RBI rules apply?

You can switch only if your lender allows it. The RBI requires lenders to explain the switching cost, any change in EMI or tenure and all related charges before they process your request.

How does RBI ensure ethical recovery practices for personal loans?

The RBI has strict conduct rules for lenders and recovery agents. They must not harass borrowers, call only during permitted hours and pause recovery if a complaint is raised.

Several lenders offer small personal loans online, making them easily accessible and therefore, a popular option. These short-term loans are best suited for tackling your small needs. You can get the required funds quickly and repay comfortably in your chosen tenure. Some of the ways in which you can use the funding are: 

• Managing medical expenses 
• Meeting travel costs 
• Maintaining cash flow for business 
• Paying credit card debts 
• Buying gadgets

Read on to learn the advantages of getting mini loans and their requirements. 

Features and Benefits of Small Amount Loans

Here are the key features and benefits of these loans: 

Collateral Free

You can get a small personal loan without pledging any of your valuable assets as security. No wonder this is an ideal option to get funds when you don’t want to risk your assets. 

Pocket-sized Loan Amount

In these loans, you can get a small amount easily that you can use for several purposes. Access to small amounts helps you avoid pawning your assets or getting funding at high rates. A smaller sum can also make repayment easier since the total amount is lower. 

Minimal Documentation

It’s no rocket science to apply for a small personal loan, as you simply have to submit only a few basic documents. So, you can quickly apply whenever you want and get instant funds. However, remember that the requirements may vary depending on the lender. 

Same Day Approval

Due to the size of the loan amount, some lenders may offer same-day approval and sanction. So, you can easily finance your urgent needs without any delay. However, ensure you have a good credit score and history to get quick approval without hassle. 

Flexible Tenure Options

The term for these loans varies across lenders but generally ranges between 12 and 72 months. Since the tenures have a direct impact on your repayment, the flexibility allows you to choose a period that results in a repayment plan that fits your budget and needs.

Competitive Interest Rates

Lenders often offer competitive rates since the loan amount and tenure are generally smaller than regular personal loans. This makes borrowing easy on your pocket and its repayment manageable.

Eligibility and Documents Required for Small Personal Loans

Here are the general eligibility criteria for getting small personal loans online:

• You must be an Indian resident 
• You must be at least 21 years of age 
• You must not be more than 65 years of age when the tenure ends 
• You must be a salaried employed or self-employed individual
• You must have the minimum income as required by the lender

Note that these terms may differ based on the lender you choose and their policy. You will also need to submit the following basic documents when applying: 

• Aadhaar card
• PAN card
• Passport
• Voter ID
• Utility bill
• Last six months’ bank statement
• Salary slips, ITR, business proof, or other income proof
• Passport-size photographs

With these features and benefits in mind, you can apply for mini loans to overcome your immediate small financial requirements in no time. At Fibe, you can easily get a small loan starting from ₹8,000 and going up to ₹5 lakhs. Our Personal Loan also comes with affordable rates starting at 2% per month and a tenure going up to 36 months. 

You can use the funds for any purpose and repay early without paying any pre-closure charges. Download our Personal Loan App or register on the website for a 100% digital application process and quick disbursal. 

FAQs on Mini Personal Loans

What are considered small loans?

Lenders generally provide varying amounts between ₹5,000 and ₹2 lakhs as mini personal loans. 

What is the minimum personal loan amount?

The amount depends on the financial institution you apply with and your eligibility. If you showcase good repayment capacity, you can get a higher amount at lower rates. 

How can I take a small loan?

The process of applying for these loans varies based on the lender but here are some general steps: 

• Step 1: Compare various lenders to choose the best option
• Step 2: Check the eligibility criteria on the lender’s website
• Step 3: Apply with the given option 
• Step 4: Enter the required personal and loan details 
• Step 5: Submit your application

There is no fixed list of fake loan apps because scammers keep launching new ones under different names. Some commonly reported names linked to loan scams include Insta Loan, Maxi Loan, RupeeGo, Lendkar and CashBus.

What matters more is knowing the warning signs. Fake loan apps often ask for unnecessary permissions, charge fees upfront, hide their details or have poor reviews. This is why you must always check if a lender is regulated by the RBI before applying. This can keep you safe from digital lending scams.

What are Fake Loan Apps?

Fake loan apps are digital platforms that appear to offer quick personal loans but operate with dishonest intent. Instead of providing genuine credit, they are often designed to extract money or misuse personal data.

Some of these apps collect upfront charges in the name of processing fees and never disburse the loan. Others approve loans but later impose very high interest rates, add hidden costs or follow aggressive recovery practices that go against RBI guidelines.

List of Fake Loan Apps in India

While multiple suspicious loan apps exist, the following names have been commonly reported by users and regulators:

• GuayabaCash: Reported for unauthorised lending activities and unclear charges shared only after loan approval.
• PréstamosCrédito: Known to ask for upfront fees while promising quick loans with little or no verification.
• EasyCredit: Lacks clear RBI registration details and has complaints around excessive charges.
• FlashLoan: Users have reported fake approvals and hidden repayment conditions.
• Flip Cash: Flagged for operating without proper authorisation and charging hidden fees at high interest rates.
• AA Kredit: Flags include unclear company information and requests for unnecessary app permissions.
• 4S Cash: Reported for aggressive recovery behaviour and very high interest rates.
• CashFish: Not RBI-registered, with multiple user complaints about forceful recovery practices.
• ApnaAroham: Known for misuse of personal data, extremely high APR and harassment during recovery.
• Instantáneo Préstamo: Reported for pressure tactics during repayment and unclear loan terms.

Note: These apps are listed based on publicly available complaints and warnings. App behaviour can change over time and new fake loan apps may appear. 

How to Spot Fake Loan Apps?

Quick access to credit can look tempting. But it often comes with hidden risks. Here are some common signs that a loan app may be fake:

• Does not follow RBI lending guidelines or clearly mention its registration details
• Has no official website or uses a poorly designed or fake website
• Does not provide a loan agreement with clear interest rates and charges
• Asks for processing fees or other payments before loan approval
• Approves loans without asking for basic documents or verification
• Has mostly negative reviews mentioning harassment or data misuse

​​How to Avoid Falling for a Fake Loan App?

Fraudulent lending applications can steal your hard-earned savings and leave you in financial turmoil. You must take these steps to prevent falling into a trap set by fake loan companies in India:

• Borrow from RBI-approved Lenders

Before applying for a loan, check if the lender’s name features in the list of lenders approved by the RBI. Once you check this, you can rest assured that you aren’t falling into any trap. Check this list on the official website of the central bank.

• Check the Lender’s Website

To validate a lender’s authenticity, you can check if their website is secured or not. A secure website generally has ‘https’ added at the beginning of the URL.

• Read the Terms and Conditions

If the lender doesn’t provide you with an agreement, demand one before availing of a loan. So, read all the terms and conditions carefully before you plan to take a loan.

• Assess Loan Fees

Before applying for a loan, check the charges associated with a loan facility. Note that some loans also carry hidden charges.

• Check App Permissions

As per the RBI guidelines, a lender cannot store a borrower’s information beyond their personal details. Check if the application asks for access to data that it may misuse in the future. 

What Can Happen If You Use a Fake Loan App?

Using a fake loan app can lead to serious consequences like:

• Loss of money through upfront fees or hidden charges
• Misuse of personal data like contacts and photos
• Harassment through calls or messages to you and your contacts
• Damage to your credit profile
• Stress and financial pressure due to unfair repayment demands

How You Can Identify Fibe as a Real Personal Loan App?

If you want instant credit without the risk of scams, here is how you can check Fibe’s authenticity:

• You can verify that Fibe is an RBI-approved lender by checking registration details
• You can read customer reviews and real user experiences online
• You can check Fibe’s security standards, including ISO IEC 27001 certification
• You can review clear loan terms, transparent charges and see that there are no upfront fees

With Fibe, you can get Personal Loans of up to ₹10 lakhs securely and affordably. Just download the Fibe Personal Loan App to get a loan with quick sanction and minimal paperwork.

FAQs on Fake Loan Apps in India

How do you know if a loan is real?

You can check if the lender is a regulated entity on the RBI’s website to determine if a loan offer is real. 

Which loan app is banned by the RBI?

Reserve Bank of India has prohibited the use of the following lending applications and more.

• Lend Now
• Cashfull
• Cash Ray
• RupeeGo 
• Punch Money
• Grand Loan
• Lendkar
• CashMO
• Infinity Cash
• DreamLoan
• Kredit Mango
• Rupee MO
• CreditLoan
• Mobipocket

How do you check if a personal loan app can be trusted?

If you are thinking, ‘Is a loan app fake or real?’, employ the following strategies to know:

• Review the lender’s website and certifications
• Check if the lender is a regulated entity under the RBI
• Read customer reviews
  

How do I block fake loan apps?

While you cannot block them, you can report fraudulent activities of such apps to the app store and competent authorities. 

Which loan app is safe?

Lenders regulated by the RBI are considered safe for borrowing. For instance, Fibe is a regulated application under the central bank.

Want to apply for a personal loan with a CIBIL score of 600? Know that it can be challenging as most lenders prefer a higher score. Your score represents your creditworthiness, and therefore, holds great significance for your eligibility. Here’s a tabulated overview of what the score implies:

As you can see, if your score is low such as 600, it doesn’t fall under the category of a ‘good’, making getting a favourable offer difficult. Nonetheless, there are a few tips you can try to secure the funds you need. Read on to know more.

Points to Consider When Applying for Loans with a Credit Score of 600

Here are some disadvantages you need to know: 

Sanction to a Smaller Loan

One of the essential criteria to remember is that the lender may offer a significantly smaller loan amount if you have a low score. After all, lenders don’t want to compromise on the safety factor. Worry not, as the following tips can help you get loan approval:

• Show your repayment capacity with a good stable income 
• Apply with a lender who accepts your score 
• Improve your score before applying

Increased Borrowing Costs

If you have a credit score of 600, personal loans interest rates will be higher. Interest rates form a crucial component of your overall loan costs. Higher rates translate to a higher interest outgo. 

Here are a few factors affecting your loan interest rates, apart from your credit score:

• Your income
• Your repayment history
• Debt-to-income ratio
• Relationship with your lender

Strict Loan Terms

When you have a low score, you become a high-risk borrower. To offset this risk, your loan terms will be rigid. For instance, you may have to bear:

• Shorter tenure
• Higher fees and other processing charges
• Increased rate of interest

Also Read: Know what your credit score says about you

How to Get Loans with a Credit Score of 600

Check out these easy-to-follow tips:

Show Higher Income

Lenders need to understand how you plan to repay your loan. A higher income translates to a better chance of loan approval. So, remember to disclose all income sources especially when applying for personal loans with a CIBIL score of 600 or lower. 

Opt for a Secured Loan

Here’s all you need to know about a secured loan:

• You need to pledge your valuable assets as collateral
• You can get lower interest rates as you’re pledging your asset as security
• The risk factor for the lender is comparatively lower
• In the case of defaults, the lender has the right to seize your assets
• You can get easy approval if you go for a secured form of credit, especially with a score of 600

So, your score doesn’t have the same weightage, making secured loans accessible even with low scores. 

Apply with Another Individual

In co-applications, the lender will consider the scores of all applicants. Given this, if all of you have a good average, you can get the funds you need. For this, you need to ensure that the other person has the ideal credit profile.

So, if you want personal loans with a CIBIL score of 600, try submitting the application with:

• Your spouse
• Your parents
• Your siblings

Increase Your Creditworthiness

Getting loans with a low score has certain disadvantages. But you can tackle them by improving your score with the following tips: 

• Make timely payments of your EMIs and credit card bills
• Reduce your existing debt to keep your credit utilisation ratio under 30%
• Check your credit score and report periodically
• Don’t apply frequently to avoid the impact of multiple hard inquiries
• Maintain a healthy mix of unsecured and secured loans 

Know that building a good score requires a lot of discipline and patience. So, if you need urgent funds, this may not be an ideal option. In such instances, you can get an Personal Loan from Fibe. We have an alternate credit scoring system that allows you to get instant funding with a low or no credit score. 

You can get up to ₹5 lakhs at affordable interest rates and tenures going up to 36 months. You also get instant access to funds thanks to a 100% digital application process and minimum paperwork. Download our Personal Loan App or register on the website to apply! 

FAQs on Personal Loans with a CIBIL Score of 600

Is it possible to get a personal loan with a credit score of 600?

Yes, you can get credit. However, the lender may levy higher interest rates and you may have to meet certain criteria such as:

• Pledging collateral
• Applying with a co-applicant

Is 600 a good CIBIL score?

Ideally, you should have a score between 650 and 750. However, this parameter may vary across lenders. So, check and compare the requirements before you apply. 

How can I improve my CIBIL score from 600 to 800?

Try some of these easy tips:

• Reviewing your credits core periodically
• Maintaining a healthy credit mix
• Keeping the debt-to-income ratio low 
• Repaying all dues on time 
• Lowering credit utilisation ratio

Getting a personal loan with a credit score of 700 is possible but can be challenging and costly. This is because while some lenders consider it to be good, some prefer a higher score, generally above 750. And although the 50-point gap doesn’t seem that high, it has a significant impact on your eligibility. 

To better understand this, consider this general classification of your profile based on your credit score:

• 800 – 900: Excellent
• 750 – 799: Very good
• 650 – 749: Good
• 550 – 649: Fair
• 300 – 549: Poor
• NA or NH: Not Applicable/ No History

That being said, there are some strategies that you can try to secure personal loan funding even with a score of 700. Read on to know more.

Ways to get a personal loan with a Credit Score of 700

Here are a few options that can help you get a personal loan effortlessly:

Go for a Smaller Loan Amount

Applying for a lesser amount is ideal, as the risk parameter is comparatively lower for the lender. This simply means that your approval chances are higher. Opting for a higher amount can delay or lead to rejection, as the lender may not be willing to sanction such a huge loan value to someone who has a higher risk of default. 

Choose an Existing Lender 

This is among the simpler and easier options you can rely on. Borrowing from your current creditor is easy because they know your repayment behaviour and can assess your application based on that. 

Moreover, some lenders, like Fibe, offer the facility of repeat loans. With this, you can get a loan without submitting a new application every time. However, you need to close your previous loan before getting a new one. So, if you’ve repaid the dues on time, getting new credit from them can be fairly easy.

Also Read: How To Improve Your Credit Score In 5 Easy Steps

Prove Your Repayment Capacity

One reason why your credit score holds such significance in unsecured loans is that it speaks to your ability to pay back on time. Lenders generally check the following information to assess your repayment capacity: 

• Salary slips
• Bank statements
• Timely payments of utility bills
• EMIs and credit card payments

You can also disclose all your income sources to show that you have the income to manage the repayment of your loan. This will give your profile the necessary boost to get a personal loan with a CIBIL score of 700.

Offer Collateral

In secured loans, the lenders can auction your asset in case of default, this mitigates their risk and makes them less hesitant in approving your application. You can offer various assets as security, like:

• Gold items
• Real estate documents
• Vehicle papers
• Valuable artwork

Get a Guarantor or Co-applicant

When you apply with a guarantor or having a co-applicant can offset the risk you have with a less than ideal score. However, ensure that they have a spotless credit history and a good credit score. This is because the lender will consider their scores too as they will be responsible for repaying the loan in case of default. 

You can rely on Fibe’s Personal Loan to address your financial needs, regardless of your credit score. This is because we have an alternate credit scoring system, which allows us to offer loans if you are new to credit or have a low score. You can get up to ₹5 lacs at affordable interest rates and flexible tenures with minimal requirements. 

Download the Personal Loan App or register on our website for a 100% digital application!

FAQs on Getting Loans With a Credit Score of 700 

Can I get a personal loan with a credit score of 700?

This depends on the lender you apply with and the requirements set by them. To choose the right one, checking the eligibility of your top preferred financial institutions is the best way to proceed. Alternatively, you can choose one that doesn’t rely on credit scores, like Fibe. You can also try some of these strategies to get funds without any hassles:

• Proving your creditworthiness

• Choosing secured loans
• Applying for smaller loans
• Researching various lenders
• Involving a guarantor or co-applicant

Do lenders consider a CIBIL score of 700 as good?

A good score depends on the financial institution and the criterion set by them. However, 700 is generally regarded as good by most.

How can I improve my CIBIL score from 700 to 800?

Some proven strategies you can try are: 

• Making timely credit repayments
• Avoiding multiple applications and inquiries
• Checking your credit report periodically