If you need immediate funds, then a personal loan is the best option for you. It is available at a low rate of interest, is authorised quickly, and you may obtain up to ₹5 lakhs in your account by just filling out the application and submitting your documentation. However, there are a few things you should know before applying for a personal loan, and one of the essential elements is the personal loan eligibility criteria.
As simple as it may appear, if you don’t fail to fit into any of the eligibility criteria, then you may not be able to apply for a personal loan. First, you need to know what those criteria are, and then you may proceed with your application procedure.
What Are the Factors That Affect the Eligibility Criteria for Personal Loans?
It is always wise to check the personal loan eligibility criteria before applying for a personal loan to avoid any hassle. Your eligibility depends on various factors. Here is a list of all those attributes:
- Age: The first and foremost factor that falls in the eligibility criteria is your age, you must attain the age of 21 to be eligible for a personal loan.
- Income: Your income also matters in if you will be able to obtain a loan or not. The more your income, the greater the loan amount for which you will be qualified.
- Geographical location: The location in which you live has a significant impact on whether or not you will qualify for a personal loan.
- Current credit: If you have another personal loan to repay, your chances of acquiring a new loan are lower than compared to having no other debt to repay.
- Residential situation: Your loan application will have a greater chance of being granted if you live in your own home. It is because residing in a rental property reduces your discretionary income, which reduces your ability to pay back the loan.
- History of credit: Your credit history will have a major influence on your eligibility for a personal loan. This element will influence the interest rate, the term of the loan, and the amount you can borrow.
- Organization: The organization in which you work will also decide whether or not you are eligible for a personal loan. Working for a well-known firm with a strong reputation makes you appear to have steady employment, making you much more credible.
What Are the Eligibility Criteria for Personal Loans?
Now that you know about the factors that affect your loan eligibility criteria, here’s a list of all the standards that determine whether you will be able to get a personal loan or not. The eligibility criteria for salaried and self-employed individuals are a bit different, hence we have split them into two sections.
Eligibility criteria for salaried individuals
- You must be a citizen of India.
- You must fall in the age bracket of 21 to 58 years.
- Now, you need to be employed for six months.
- A monthly income of ₹15000 is required.
Eligibility criteria for self-employed individuals
- You must be an Indian citizen.
- You should be between the ages of 21 and 58 years.
- In your present business, you must have at least two years of experience.
- A monthly income of ₹15000 is required.
How Can You Increase Your Chances of Getting a Personal Loan?
It feels disappointing to calculate your personal loan eligibility and find out that you are disqualified for the loan and cannot meet your financial needs. To help you out, here are some tips that will help you increase your loan eligibility.
- Pay off all of your debts to raise your credit score.
- Find an alternative source of income to improve your profile.
- Increase the tenure of your loan for a lower EMI.
- Do not opt for multiple loans, as it creates a bad impression; instead, choose a personal loan from the lender you prefer.
- Add a higher-income co-applicant to secure a better loan.
Personal loans are rather straightforward to obtain, provided you meet all of the personal loan eligibility criteria. Almost all lending institutions use the same eligibility criteria. Your lending institution will first check to see if you meet all of these requirements, and if you do, the only thing left to do is submit your documents and wait for the approval of your loan. The approval process takes only a few minutes, and after that, your funds will be deposited into your specified bank account.
