Knowing The Eligibility Criteria for A Personal Loan
What Is A Personal Loan?
A personal loan is a short-term credit availed to meet immediate financial needs. It is an unsecured loan, which means that you need not have to provide any collateral for the amount you borrow. You can avail a personal loan to pay for medical bills, funding your child’s education, or debt consolidation. Among all other types of loan, getting a personal loan is the easiest. Let us look at the eligibility requirements.
One of the most important personal loan eligibility factors that the lenders in India consider is your place of residence or your geographical location. The locality where you live plays an important role in determining your loan approval. If you live in a metropolitan city, you have better chances of getting the loan approved than those who live in a semi-urban or a rural location.
Most lenders in India consider the income as one of the most important personal loan eligibility criteria before approving the loan application. The higher your income, the better your chances of getting the loan approved and higher the loan amount you can get. This is because, based on your income, the lenders will be assured of your repayment capacity and consider you as a low-risk applicant.
A lot of lenders in India, as part of their personal loan eligibility check process ask the borrowers about their home ownership. If you live in your own house, your chances of getting the loan approved are higher than those living in a rented home. This is because, if you live in a rented home, you are obliged to pay rent, which means you have lesser disposable income and thereby lower repayment capacity.
If you have already availed a loan and are in the process of repaying the same, your chances of getting a new personal loan will be lower than if you have no other existing debt. Before you apply for a loan, make sure that you research about the lender and check their personal loan eligibility online to avoid rejection.
Another major factor that affects personal loan eligibility is your credit history. Typically, the lenders decide the interest rate, loan amount and the tenure based on the credit score of the applicant. If you have a good credit score, you can easily get your loan approved; most lenders consider 700+ to be a good credit score.
What Is The Minimum Salary Limit To Apply For Personal Loan?
The minimum salary required for a personal loan varies from lender to lender, but most lenders require to co-relate the salary you draw and the city you live in. For example, if you live in a city like Mumbai and you earn a monthly salary of Rs. 25,000 you may not be eligible for the loan. This is because of the high cost of living in the city. However, you can always apply for a lower amount or show proof of additional income to underpin your repayment capacity. To know exactly how much loan you can get, you can use the personal loan eligibility calculator and know the exact amount you would have to pay as EMIs.
What Is The Minimum and Maximum Age Limit to Get a Personal Loan?
The minimum and maximum age limit to apply for a personal loan range from 22 years to 55 years. Make sure that you do a personal loan eligibility check online of the particular lender about the age limit before applying. The younger you are, the better your chances of getting a higher loan amount. This is because the lenders know that you have more working years to be able to repay the amount.
Every lender requires the applicant to submit certain documents required for personal loan approval. These include:
- Loan application form duly-filled
- Passport-sized photos
- A cheque to pay for the processing fee
- Proof of identity – A copy of passport/AADHAR card/driving licence/PAN card
- Proof of residence – A copy of passport/ copy electricity bill/home rent agreement
- Income proof - bank account statements/salary slip
- Form 16
- KYC document
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