5 Essential Points that Play a Key Role in Personal Loan Eligibility

A personal loan is a great way to keep up with your household expenses. If you are looking for a personal loan, it is time for you to understand the Personal Loan Eligibility criteria of lenders in India. 

Be it a shortfall in purchasing property, car, higher education of the child, vacation or medical emergencies; a personal loan is a great way to keep up with the expenses of your household. There are now several lenders in India that offer personal loans at competitive rates. Moreover, many of them also offer it online without even requiring you to visit any branch office or loan agent physically.

Most lenders offer personal loans of up to Rs. 25 lakhs for a duration of up to 5 years. It is on the basis of your eligibility that the lender decides whether or not you are eligible for a personal loan and how much amount you can get. If you are planning to take a personal loan soon, it is essential for you to know these five important points about eligibility criteria mentioned below-

1. Your Monthly Income

One of the most critical parts of the Personal Loan Eligibility criteria for any lender is to know how much you earn in a month. It is on the basis of your income that they decide the loan amount. Income from your salary as well as other sources like investments, rent, etc. is taken into consideration. Usually, an income of Rs. 35,000 or more is preferred by lenders.

You’d be required to submit your salary slips, tax returns, bank statements, etc. to help lender review your income.

2. Your Age

Your age abundantly affects your income and employment and is an important consideration for the lenders too. It is commonly seen that younger working professionals find it easier to get a personal loan as they have a higher earning potential and can increase their prospects to earn more and easily repay the loan.

Moreover, they also have fewer financial responsibilities and find it easier to pay the EMIs on a regular basis. Most lenders offer personal loans to applicants aged between 25 and 60 years.

3. Employment Stability

Your employment stability too has a connection with your monthly income and is an important consideration for the lender. If you have a steady job, the chances of your loan application getting rejected are far lesser than someone who is unemployed.

Most of the lenders require you to have at least six months of experience in the current organisation. Moreover, your overall work experience will also play an important role.

4. Credit Score

You also need to have a good credit score to get a personal loan. Your credit or CIBIL score is your overall credit performance based on your credit history and repayment history. With the help of this score, the lenders measure your creditworthiness. It is recommended that one should have a credit score of 750 or above to get their loan application approved.

 If you are somewhere in the range of 650-750, the chances of you getting the loan will fall significantly. Moreover, you might have to pay higher interest with a poor credit score.

5. Your Location

Where you live also has an impact on a number of important factors of your life like your income, lifestyle, etc. As a result, the lenders also consider your current location when granting a personal loan.

Several lenders only accept loan application of those living in Metro cities like Mumbai, Delhi, Hyderabad, Bangalore, etc.

Remember these points if you are planning to apply for a personal loan anytime soon. Make sure that you perfectly fit these criteria to ensure that your loan application is approved and you get the loan at the best rate.