Want a personal loan? Eligibility, documents you need
Personal loans are highly expensive and are not recommended, but they can help address specific financial needs, such as medical emergencies, home renovations, etc. These loans do not require security or collateral.
Who offers the loan?
Banks and NBFCs offer personal loans with competitive interest rates. NBFCs offer more relaxed eligibility criteria and faster processing, but may charge higher interest rates. Peer-to-peer platforms connect borrowers with lenders, often providing competitive rates and flexible terms.
Process for securing loan
To secure a personal loan, determine the amount needed and ensure that it fits your financial plan. Check the lender’s eligibility criteria, compare loan offers, and submit your application with accurate details. The lender will verify your documents and assess your creditworthiness. On approval, the loan amount is typically disbursed to your account within hours, or a few days.
Eligibility Criteria
The following people are eligible to apply for a Personal Loan:
- Employees of private limited companies, employees from public sector undertakings, including central, state and local bodies
- Individuals between 21 and 60 years of age
- Individuals who have had a job for at least 2 years, with a minimum of 1 year with the current employer
- Those who earn a minimum of 25,000 net income per month.
How is Personal Loan eligibility calculated?
Personal Loan eligibility calculation uses six factors to determine your eligibility, they are:
- Geographic location
- Monthly Income
- Ownership of property.
- Existing credit.
- Employer.
- Credit history.
- You can also use Personal Loan eligibility calculators online for the calculation.
What is the minimum salary for a Personal Loan?
The minimum salary is 25, 000 per month.
What is the age criterion to get a Personal Loan?
To be eligible for a Personal Loan, you must be between the ages of 21 to 60.
What is the Minimum Credit Score to apply for a Personal Loan?
A minimum credit score of 650 to be eligible for Personal Loans. The credit score can vary from bank to bank.
What are the factors that affect the eligibility of a Personal Loan?
The factors that affect the eligibility of Personal Loans are
CIBIL Score – A CIBIL score above 720 is ideal for Personal Loans.
Income – It plays a vital role in the approval of the loan amount.
Repayment history- If you have a good track record of repayment with previous loans, approval of the loan is faster and easier.
How to improve Personal Loan eligibility?
The best way to improve your Personal Loan eligibility is by maintaining a healthy repayment history.
Documentation
The following documents are typically required:
ID proof: Aadhaar, passport, voter ID, or driver's licence.
Address proof:Utility bills, rent agreement, or passport.
Income proof: Salary slips, ITR or bank statements.
Employment proof: Appointment letter or business registration documents (for self-employed).
Other documents:Completed loan application form and passport-sized photographs.
Points to note
- It is important to maintain a high credit score for securing better interest rates.
- It is essential to keep the debt-to-income ratio low to ensure financial stability.
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