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 of a Personal Loan to pay for medical bills, fund your child’s education or debt consolidation. Among all other types of loans, getting a Personal Loan is the easiest. Let us look at the eligibility requirements.

Location

One of the most important Personal Loan eligibility factors that 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 rural location.

Income

Most lenders in India consider 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 getting a higher loan amount. This is because, based on your income, the lenders will be assured of your repayment capacity and consider you as a low-risk applicant.

Home Ownership

A lot of lenders in India as part of their 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.

Existing Loan/Debt

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 the lender and check their Personal Loan eligibility online to avoid rejection.

Credit history

Another major factor that affects Personal Loan eligibility is your credit history. Typically, the lenders decide the interest rate, loan amount and 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 a Personal Loan?

The minimum salary required for a Personal Loan varies from lender to lender, but most lenders require you 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 50,000 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 20 years to 58 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.

Documents Required

Every lender requires the applicant to submit certain documents required for Personal Loan approval. These include:

A. For Salaried Individuals:

1. Proof of Identity/Residence: Any one of the below Official Valid Documents (OVD) can be accepted as Current/Communication address proof only.

• Passport

• Driving Licence issued by Regional Transport Authority

• Voter's Identity Card issued by the Election Commission of India

• Letter from National Population Register containing details of name and address

• Proof of possession of complete Aadhaar Card

• NREGA Card.

2. Latest 3 months* Bank Statement (where salary/income is credited)

3. Salary slips for the last 3 months^*

B. For Self-Employed:

1. Proof of Identity/Residence: Any one of the below Official Valid Documents (OVD) can be accepted as Current/Communication address proof only.

• Passport

• Driving Licence issued by Regional Transport Authority

• Voter's Identity Card issued by the Election Commission of India

• Letter from National Population Register containing details of name and address

• Proof of possession of complete Aadhaar Card

• NREGA Card

2. Income Proof:

• Audited financials for the last two years

• Latest 6 months^* Bank Statement

3. Office address proof.

4. Proof of residence or office ownership

5. Proof of continuity of business.

*Conditions applied as per policy.

*ICICI Bank reserves the rights to call upon additional documents at its discretion.