As an unsecured loan offered without any collateral, personal loans can be availed to deal with planned expenditures such as a family holiday or home renovation and unplanned expenses, including medical emergencies. A personal loan is an effective solution to consolidate debts and stabilise the financial condition. One can easily apply online for a personal loan in India and get it sanctioned within a few days upon proper verification.
Due to the loan’s unsecured nature, the banks typically perform an in-depth inquiry of the borrower’s eligibility and requirements to decide their creditworthiness before approving it. Multiple factors, such as the candidate’s age, monthly income, work experience, credit score, etc., are being considered by the banks to avoid any wrongdoing in the future. Therefore, a candidate can improve their chances of getting the loan sanctioned by working on the related factors.
Read on to know about the eligibility factors that one must be aware of while applying for a personal loan.
While the criteria vary from bank to bank, one can easily check their loan eligibility by reviewing the following factors:
- Age: One of the key parameters for getting a personal loan, the candidate’s age should be at least 25 years of age at the time of loan sanctioning. In addition to it, the bank also recommends that the candidate’s age should be less than their retirement age at the time of loan maturity.
- Employment Stability: To be eligible for a personal loan, a candidate should mention their employment type, i.e. whether a salaried individual, business owner, self-employed professionals, etc.
- Salary: A vital factor for examining personal loan eligibility, the candidate’s net monthly income should not be less than INR 15,000 in the current organisation. The latest salary slips, account statements, and ITR documents should be submitted as proof of salary to the bank.
- Work Experience: While applying for a loan, the candidate must possess at least three years of total work experience and a minimum of one year of experience in the current company. In the case of a self-employed individual, most lenders require your current business to be running for at least two years before applying for a loan.
- Credit Score: A credit score demonstrates a person’s debt-handling capacity, and having a healthy CIBIL score of 750 or more greatly helps in availing of a personal loan swiftly.
- EMI amount: A loan is usually repaid through equated monthly instalments (EMIs) calculated based on the levied interest rate, repayment tenure, loan amount, and candidate’s income. Banks recommend the EMI amount should not be more than 65% of the candidate’s monthly income.
While you should pay attention to the above factors while applying for a loan, selecting the lender/ bank carefully upon thorough research can also improve your personal loan eligibility. Additionally, a person should not apply for multiple loans frequently as it may harm your credit health and subsequently hamper the chances of getting a loan. Once you pass the eligibility barrier, there is no need to wonder how to get a personal loan online because it is just a few clicks away.