Personal loans are unsecured, which means the borrower doesn’t have to provide any security such as property, gold, etc. To borrow a personal loan, you need a regular flow of income to pay off the EMIs without fail. You can check out the loan eligibility on the bank or non-banking financial institution’s official website. Read this page and know how your Best Personal Loan Eligibility is determined by the lender.
Factors that Can Help Determine Personal Loan Eligibility
You can borrow a personal loan as long as you take care of the below factors –
Age of the Applicant
There are certain age criteria applicable to the personal loan. So, if you want to borrow an amount from a bank or non-banking financial institution, you should check this. The minimum age to borrow a personal loan amount is 21 years. At that age, any man or woman can earn a decent regular income. Whereas, in the 50s or 60s, a person isn’t eligible for a full-time job which can lead to irregular income. This is why some banks or non-banking financial institutions have put the maximum age limit of 50 or 58 years on personal loans.
Regular Flow of Income
Your income is the primary source of loan repayment and if there’s any irregularity found in your salary slip or bank statement, the loan won’t get approved. To get your loan application approved, you need to ensure no loopholes in your salary slip or bank statement. Because these documents are used to verify your income. If you don’t have a salary slip, you can submit a salary certificate instead to confirm your monthly income.
A credit score shows the applicant’s repayment record. This ranges from 300 to 900. An applicant with a credit score of 750 or above is considered ideal for a personal loan. So, before applying for a personal loan, do check your credit score online. In case your credit score is low even after paying the EMIs or credit card bills regularly, it means an error somewhere. In such a case, you can file a report to the credit bureau. Upon receiving the request, they will check your credit details and correct your score. When your credit score appears correct online, you can apply for a personal loan. Because having a high credit score can help you negotiate the interest rate.
If you have any credit cards or loans when applying for a loan, it could affect your Personal Loan Eligibility. How? Because there may not be enough space left to pay the additional debt. But this is not true in every case. If the applicant earns a handsome income, he/she can easily cover the cost of personal loan EMIs. In that case, the current obligations will be used to compute your repayment pattern. To see how often you miss a credit card or EMI payment.
Work Experience In Case of Salaried Applicants
A bank or non-banking financial institution will offer you a personal loan if you have spent at least one year in the current organization. This personal loan eligibility criteria matters as it assures lenders of receiving the borrowed money back with interest. Because an applicant who is on probation at the company won’t have a permanent job. By lending such individuals, lenders would run the risk of losing their capital should the individual not get permanent later. You can check this criterion while considering a personal loan, as it may vary from lender to lender.
Personal Loan Eligibility Calculator
You can find the personal loan eligibility calculator on the official websites of banks and NBFCs to know the loan limit. This tool uses the above factors to compute the Personal Loan Eligibility of an applicant.