Individual Loan or Personal Loan: Which One is Right for You?
Disclaimer: Ujjivan Small Finance Bank does not offer personal loans. This blog is written for generic information only.
July 23, 2025

Individual loan and personal loan are unsecured loans where you don’t have to pledge collateral to avail a loan. However, bot are designed to serve different purposes. Also, there are quite a few difference between the two in terms of eligibility and other parameters. We have decoded these financing options so that you can make an informed choice. Let’s dive in!
What is an Individual Loan?
An Individual Loan is a purpose-based loan, meaning you can use the loan amount for business expansion, home refurbishment, animal husbandry and agricultural activities. You can get a loan amount of up to ₹3 lakh. It’s an unsecured loan. For instance, if you take a home loan, you have to pledge your home to the bank. The bank holds partial ownership rights of the house till the home is repaid. Such is not the case for individual loans; you don’t have to pledge collateral to avail a loan.
What is a Personal Loan?
A personal loan is also an unsecured loan, however, it’s not purpose-based. You can use the loan amount for any requirement, like paying medical bills, financing a wedding, buying gadgets, etc. That said, personal loans can come with higher interest rates if your credit score is poor.
Now, let’s take a glimpse of the difference between personal loan and individual loan.
Individual Loan vs Personal Loan: A Comparative Analysis
Parameters | Individual Loan | Personal Loan |
Purpose | For business expansion, animal husbandry and agricultural activities, home renovation, etc | Not purpose-based. You can use the loan amount to meet any financial requirement. |
Eligibility | No need to have an excellent CIBIL score | Difficult to avail a loan if credit score is poor |
Interest Rate | Competitive rates | Higher interest rates compared to individual loans |
Final Thoughts
Consider all these factors before applying for an individual or personal loan. In case you want to apply for individual loan and have any doubt, please visit your nearest Ujjivan Bank branch. Alternatively, you can call our toll-free number 1800 208 2121.
Disclaimer:
The contents herein are only for informational purposes and generic in nature. The content does not amount to an offer, invitation or solicitation of any kind to buy or sell, and are not intended to create any legal rights or obligations. This information is subject to updation, completion, amendment and verification without notice. The contents herein are also subject to other product-specific terms and conditions, as well as any applicable third-party terms and conditions, for which Ujjivan Small Finance Bank assumes no responsibility or liability.
Nothing contained herein is intended to constitute financial, investment, legal, tax, or any other professional advice or opinion. Please obtain professional advice before making investment or any other decisions. Any investment decisions that may be made by the you shall be at your own sole discretion, independent analysis and evaluation of the risks involved. The use of any information set out in this document is entirely at the user’s own risk. Ujjivan Small Finance Bank Limited makes no representation or warranty, express or implied, as to the accuracy and completeness for any information herein. The Bank disclaims any and all liability for any loss or damage (direct, indirect, consequential, or otherwise) incurred by you due to use of or due to investment, product application decisions made by you on the basis of the contents herein. While the information is prepared in good faith from sources deemed reliable (including public sources), the Bank disclaims any liability with respect to accuracy of information or any error or omission or any loss or damage incurred by anyone in reliance on the contents herein, in any manner whatsoever.
To know more about Ujjivan Small Finance Bank Products Visit:"https://www.ujjivansfb.in"
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to Ujjivan Small Finance Bank Limited or its licensors. Unauthorised use or misuse of any intellectual property, or other content displayed herein is strictly prohibited and the same is not intended for distribution to, or use by, any person in any jurisdiction where such distribution or use would (by reason of that person’s nationality, residence or otherwise) be contrary to law or registration or would subject Ujjivan Small Finance Bank Limited or its affiliates to any licensing or registration requirements.
FAQs
1. What is the interest rate of Individual Loan?
The interest rate can range between 23% p.a. to 24.50% p.a. The final interest rate offered is based on various parameters and is at the sole discretion of the bank.
2. What is the repayment tenure of personal loan and individual loan?
The repayment tenure can range from few months to 36 months for individual loans. For personal loans, the tenure may go up to 48 months.
3. Can I get individual loan if I have low credit score?
You might get an Individual Loan even if you have a low credit score. That said, please check with the bank to know the eligibility criteria in detail.
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