Personal loans help us meet our financial goals the best way. Yes, you can borrow a lump sum amount instantly to meet all your needs. But are you eligible for a personal loan? Well, the easiest way to check the same is by visiting the lender’s website. There you get all the information regarding Personal Loan Eligibility. The lender accepts only those applications that meet the eligibility criteria. So, to avoid rejection, do check the same before applying. On this page below, you’ll learn more about Personal Loan Eligibility. So, keep reading!
Take Care of these Things to Enhance Personal Loan Eligibility
You can increase your personal loan eligibility if you take care of the following before applying-
The previous record of your credit card payment and loan EMIs helps the lender know how you handle the repayments. A credit score is assigned to you by the credit bureaus basis the data they receive from your lender every month. The score ranges from 300 to 900 based on your repayment behaviour. You need a 750 or above credit score to get a personal loan sanctioned from the lender. Such a score means you have managed your debts responsibly, making lenders confident about your loan repayment abilities.
But if the score has come down, you need to check the reasons for that in your credit report. If it is due payments, settle those bills and improve your score. The score will gradually improve and once it goes past 700 or 750, apply for a personal loan.
Your expenses show how much you’re left with for loan repayments. If your monthly savings are less, you may struggle to pay EMIs on time, something which could impact your personal loan eligibility. The lender, in that case, could either reject your loan application or disburse you less. Not cool! So, ensure an optimum EMI and income ratio, as per the lender, for a smooth loan disbursal.
The Tool for Personal Loan Eligibility
Some lenders have an online tool for assessing Personal Loan Eligibility that you can use on your smartphone, tablet, laptop or desktop computer. Visit the website of banks or NBFCs, go to their personal loan section and look for the tool.
Found the tool? Insert the following information –
- Company name
- Net monthly income
When you do, the eligible loan limit will flash on your screen
If you feel content with the loan amount, click on the ‘Apply Now’ button and fill in the application form.
Bank and NBFC Personal Loan Requirements
The lender will check the following before providing you with the loan amount –
Age of the Borrower
The borrower should be old enough to earn a livelihood. Because this will ensure that he/she can afford EMI payments.
Income of the Borrower
Your income is the regular source of EMI payment. However, if it is not enough to cover the cost, you may not be approved for a loan. So, check the income criteria the lender has set for a personal loan. The income requirement of a personal loan may vary from lender to lender. So, if you don’t meet a lender’s requirement, check with the other one.
The time you have spent in the current working sector matters in deciding your personal loan eligibility. A new employee doesn’t have a stable source of income and can’t be sure of his/her stay in the current organization. So, the bank will require at least one or two-year experience. This will ensure you have a regular source of income. To prove the same, submit your joining letter. If the date of joining is mentioned in your salary slip, don’t need to provide the letter to the lender.
Documents Required During the Personal Loan Application
The lender may require the below KYC and income documents to assess your loan application –
- Aadhaar Card, PAN Card, Passport Copy, etc.
- Salary slips and bank statements
- Utility bills, passport copy for address verification
If the above documents don’t match the information you provided on the application, your personal loan request can be declined. So, submit true information regarding your personal loan application.