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Check Eligibility Criteria for Personal Loans

6 Mins 30 Jun 2023 0 COMMENT

Introduction

A personal loan allows you to get collateral-free financing and meets all your personal and professional expenses without any hassles. These may include tackling a medical emergency, meeting your wedding expenses, funding your higher education, and making big-ticket purchases. However, one thing that you need to be wary of is personal loan eligibility criteria.

Since personal loans are unsecured loans, lenders usually provide them only after a fair bit of assessment. Each lender has its eligibility criteria, and those who can fulfil them are provided with personal loans.

What are personal loan eligibility criteria?

Below are the common factors that lenders look at while determining a borrower’s eligibility for a personal loan:

Age

Those nearing their retirement are usually considered risky propositions, so most lenders refrain from providing personal loans to them. Generally, the minimum age for getting a personal loan in India is 21 years, while the maximum is 58 and 65 years for salaried and self-employed individuals, respectively.

Employment Status

Almost all reputed lending institutions in India provide personal loans for salaried and self-employed borrowers. These include private, government, and MNC employees. However, the lender may ask for a minimum experience of two to five years in their current job or business.

Monthly Income

Someone with a higher monthly income will have a higher capacity to repay their loan on time and hence, are preferred over those with a lower monthly income. Usually, lenders in India ask for a minimum monthly income of Rs 25,000 for salaried individuals and Rs 30,000 for self-employed.

Geographic Location

The living expenses for Tier I cities are usually higher than the Tier II cities. It means that a person living in Delhi, Bengaluru, Mumbai, or Hyderabad may have to fulfil stricter eligibility criteria to get a personal loan than someone living in Vadodara, Ranchi, Kanpur, Bhubaneswar, or Chandigarh.

Credit Score

An applicant’s credit score reflects their ability to repay their loan EMIs on time. Those with a credit score of 750 or more are considered responsible borrowers by lenders. Some lenders also offer personal loans to borrowers with lower credit scores but at higher interest rates.

How to check personal loan eligibility?

You can find out about your personal loan eligibility by using your lender’s personal loan eligibility calculator. These calculators are available online and can help you know your eligibility for a personal loan from your home or office. All you must do is enter your current age, residential address, employment details, and monthly income, and your personal loan eligibility will be displayed within a few seconds.

To conclude

Personal loan eligibility criteria may vary from one lending institution to another. While some ask their borrowers to fulfil strict criteria, some may be a bit lenient while assessing loan applications. That is why you must check your personal loan eligibility with a lender before applying. Remember, if your loan application gets rejected, it can do more harm than good to you.

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