Personal loans are the most common type of loans as they can usually be availed quickly and to meet a variety of urgent financial needs. Personal loans can be secured, unsecured, demand, subsidised or concessional in nature. Now, if you are looking to get a personal loan online, applying for the same should be easy. If you go for a reputed financial institution or lender, the eligibility criteria will be simple and straightforward, the application process will be convenient, interest rates will be affordable, and you can expect fast disbursement of funds too. Also, you can compare multiple lenders and their offerings before taking a call.
Now, take a close look at the personal loan eligibility criteria for most leading lenders. It is affected by several factors though. The same is explained below.
- Age –
Age is a very important factor when applying for personal loans. Age determines the earning potential of a person. Young individuals have a higher earning capacity than old or retired individuals. At what age you are applying for personal loan is an important consideration. Usually, in case of most financial institutions, you can apply for personal loans if you are between 21 and 58 years.
- Income –
What you are earning per month needs to be assessed as well when applying for personal loans. Generally, you only need a monthly income of Rs 15000 to qualify for personal loans. If you are earning more than Rs 15000 per month, but lacking in other areas, your application may still be approved. This is because earning more makes your profile less risky.
- Credit Report –
The credit report is the first thing that a lender checks in order to approve your personal loan request. It is important for them to know about your loan history and previous repayment pattern. If it is found from your reports that you defaulted on your previous loans and have issues with repayment, your application might get rejected. So, while seeking personal loan online, apply only if you have a strong credit record.
- Employer Status –
For who you are working plays a vital role when it comes to a lender approving the personal loan application. Working for a reputable firm or company ensures timely salary and employment security. The reputation of your organisation will be assessed thoroughly too. Working for a sound organisation or reputable firm makes your profile less risky and chances of your application getting approved increases.
- Employment Stability –
Whether you are a salaried employee or self-employed, stability is very important if you want your personal loan request to be approved. If you frequently change jobs or your businesses don’t thrive, it directly questions your stability.
- Debt to Income Ratio –
A debt to income ratio of less than 50% is considered good generally. Regardless of how high your income is, if the major part of your income is used for debt repayment, your prospects of getting a personal loan are minimal.
Personal Loan Eligibility Criteria
In order for a lender to approve your application for personal loan, you should usually meet the criteria discussed below.
Most reputed lenders have the following terms, though they might slightly vary.
- Citizenship and Age
You must be an Indian Citizen
You must be between 21 and 58 years old
Personal loans are available to both salaried as well as self-employed individuals
- Work Experience
You must be employed for at least six months if you are a salaried employee
You must have at least 2 years of experience in your current business
- Maximum Loan Tenure
Flexible repayment tenure up to 5 years
- Maximum Loan Amount
You can apply for loan amount of Rs 5 lakhs maximum
- Monthly Income
Monthly earning should be minimum Rs 15000
If you are looking for personal loan online, apply only after meeting all the eligibility criteria.
Now, it’s time to go through the application process. Remember that you need to submit a few specific documents as well.
- Head to the lender’s website and check their specific eligibility criteria. Make sure you meet all of that.
- Check if there is any specific credit score requirement or other requirements related to income and job or business stability.
- You might need to submit KYC documents like ID and address proof at the nearest branch office of the lender or upload the soft copies of the same on their website.
- You will also need to supply proof of income like bank statement of the previous 6 months or salary slips of the last 6 months.
- One passport size photograph needs to be submitted as well.
All in all, leading financial institutions these days make the process super simple if you are looking for personal loan online. Apply after comparing different lenders, checking the eligibility criteria, and getting all the necessary documents in place. Also, make sure that you are taking the loan for a good reason and can repay it on time. Otherwise, it can affect your credit score negatively.