Applying for an instant loan has become easier than ever. Now with the availability of tailor-made loans, you can fulfill all your financial needs without draining your savings. Be it your wedding plans or your travel plans, an emergency medical situation, or a luxury purchase, you can meet all your needs with personal loans. Today, applying for these loans is simple, quick, and easy. However, you have to meet some basic eligibility criteria to avail a personal loan. Whether you go with a traditional lender or apply for an instant loan, meeting the eligibility criteria is a must.
The good thing is that there are many lenders out there and, in most cases, the eligibility criteria for personal loans are quite simple. You can simply download a loan app and check the eligibility rules of different lenders. Here are some of the basic criteria that most lenders follow:
What Is the Personal Loan Eligibility Requirement?
The eligibility criteria for a personal loan are a list of requirements that a person should fulfill to be able to apply for an instant loan. The eligibility criteria mainly consist of factors like your age, geographical region, monthly income, job status, and work experience.
Every lender will first ask to check your eligibility before moving further with your loan application. The list of these eligibility criteria is quite simple and similar for mostly all lending institutions.
What Factors Affect Your Loan Eligibility?
To get a detailed idea of your personal loan eligibility, here is a list of factors that affect your personal loan eligibility requirements.
- Your Residential Status: Your residential status is a key factor in establishing your eligibility for a personal loan. As based on that the lender will decide on other aspects of your loan. Also, Indian citizenship is a mandatory requirement for Indian lenders.
- Your Credit Score: Your ability to obtain a personal loan will mostly depend on your credit score and credit history. This factor will influence the interest rate, loan amount, and loan tenure you are eligible for. If you have a high credit score, then you might get a loan at a low-interest rate. On the other hand, if you have a poor credit score, your loan application may be denied, or you may be offered one at a high-interest rate.
- The Company You Work For: Your employer will also have an impact on your ability to obtain a personal loan. If you are working with an MNC or have a government job, then your chances of getting your loan approved and getting a good interest rate are quite high. However, if you are working with a start-up or you have changed your job frequently, then that might be a problem in your loan approval.
- Your Work Experience: Your work experience matters a lot as it determines your stability which indicates that you have a stable flow of income. Having a stable flow of income is very necessary for a personal loan as it assures the lender that you will be able to repay your EMI on time. Therefore, it is especially important for you to be in the same job for at least 6 months.
- Monthly Income: Your income will also have an impact on your capacity to secure a personal loan. Your loan amount is basically decided while considering your monthly income. Many lenders consider ₹15,000 as the minimum salary for being eligible for a personal loan. However, the higher your salary is, the more loan amount you will be eligible for.
- Housing Situation: Your chances of getting your application accepted are greater if you live on your own property. The cause of this is that renting reduces your total income, which diminishes your capacity to repay and may result in the rejection of your loan application.
- Your Existing Credit: Your chances of obtaining a new loan will be reduced if you have already availed a personal loan. You must be a prudent borrower and repay your previous debts before applying for a personal loan to increase your chances of being eligible for it.
How Can I Find Out Whether I Am Eligible for a Personal Loan or Not?
To find out whether you are eligible for a personal loan or not have a look at the common eligibility criteria for a personal loan below:
- You must fall under the bracket of 21 to 58 to be eligible for a personal loan.
- It is required that you hold Indian citizenship.
- This loan is available for both salaried and self-employed individuals.
- As for work experience, a salaried person needs to have at least six months of work experience at their current firm, while a self-employed individual must have two years of experience in their current business.
- Lastly, you must earn a stable income of at least ₹15,000 per month.
Does My Eligibility Determine Which Personal Loan Lender I Should Apply To?
Yes, your qualifying conditions are important when deciding which personal loan lender to choose and apply to. Some lenders have very rigorous qualifying standards, and if you fail to meet one of those criteria, your loan application may be rejected. On the other hand, several lenders provide personal loans to people with bad credit as well. If you feel like you might have a low credit score you should choose those lenders.
Another thing to bear in mind is that lenders offering high-interest rates are more likely to approve loan applications than lenders offering low-interest rates. As low-interest rate loans are for those lenders who have a strong credit score. So, if you have any doubts regarding your eligibility for a loan, keep a watch on those personal loan providers.
What if I’m Not Qualified for a Personal Loan?
If you are not qualified for a personal loan, there is nothing to be concerned about. You should simply take a break and attempt to improve your profile. You can do that by raising your credit score, keeping up with your previous loan payments, carefully selecting the loan amount, and avoiding applying to multiple lenders at once. If that does not work you can simply try other loans like a gold loan, home loan, or other secured loans.
Either way, you should not lose hope and try applying again after some time to check whether you are still eligible for the loan or not.
Can I Reapply for a Personal Loan if I Am Not Found Eligible for the First One?
Yes, you can. There is no regulation stating that you cannot apply for a personal loan if you were denied the prior time. You can reapply for a personal loan whenever you believe your profile has improved and your credit score is good. You may also try applying with a different lender this time to increase your chances of getting your loan accepted.
Conclusion
We hope that you found this post helpful, and the help of our extensive information that we have provided on personal loan eligibility will help you apply for instant loan effortlessly. Checking the eligibility requirement of a personal loan is the first thing that you should do when you visit a lender’s website or loan app, as the lender will only proceed with the loan application further if you are found eligible. Therefore, we advise you to carefully read this post before you apply for a loan to improve your chances and find a personal loan that is right for you.
