When in urgent need of money, a personal loan can be of great help as it can help you easily cater to emergencies. By getting an instant personal loan, you can get quick financial assistance to take care of various expenses such as a wedding, home renovation, education fees, hospital bills, and others. With a personal loan being an unsecured type, you also don’t need to provide any security to the lender for getting the loan amount. This type of loan is provided based on an individual’s eligibility criteria. Read on to know everything about personal loan eligibility criteria in India.
What is a personal loan?
A personal loan is an unsecured form of credit offered based on the applicant’s eligibility criteria including his credit score, monthly income, age, employment status, and other factors. This type of loan does not require you to offer any assets as collateral to avail of the loan amount. This means that none of your assets are at risk in case of non-repayment of the availed loan amount. This type of loan is provided by banks, NBFCs and various digital online lenders at the minimum interest rate and documentation. With digital advancement, getting a personal loan in India has become simple as you only have to meet the eligibility criteria specified by the lender.
What is the eligibility criterion for getting a personal loan in India?
- Age: 21-60 years
- Employment Type: Salaried or self-employed professional
- Organization: Private, public or government employee in case of salaried professional
- Employment status: Employed in the organization for at least 6 months
- Minimum monthly income: 17,000
- Overall work experience: 1+ year
- Credit score: Having a credit score of 650 and above
Note: the above-listed eligibility criteria may vary from lender to lender
Documents required for getting a personal loan
To be eligible to get a personal loan in India, you must provide the below-listed documents to the lender.
- Duly filled the online application form
- 2 passport size photographs
- 2 canceled cheques
- Identity proof- voter ID, passport, driving license, PAN card
- Address proof- passport, electricity bill
- Latest 3 months salary slip
- Latest 6 months bank statement
- Latest Form 16/ Income Tax Return
- Other KYC documents if required
Note: the above list of documents required may vary from lender to lender
How is personal loan eligibility calculated?
Personal loan eligibility is calculated based on various factors that have an impact on the loan amount as well as the interest rate you are eligible to get.
Your personal loan eligibility will depend on the income that you draw each month. The higher your income, the higher is the loan amount you are eligible to get. The income criteria may vary from lender to lender and also depends on your residence location. Lenders perceive you to have a high repayment capacity if you have a high income.
Working with a reputed employer increases your chances of getting a high loan amount, as lenders perceive you to be more responsible and stable.
Your housing situation also plays an imperative role in determining your personal loan eligibility. Residing in your own house will give you a better chance of having your loan application approved. Residing in a rented apartment decreases your disposable income, thereby lowering your repayment capacity.
Your area of residence plays an important role in determining your qualifications to get your personal loan application approved. Residing in a metro city is likely to increase your chances of getting the loan, in comparison to staying in tier II or tier III cities.
Your credit score is an important factor that helps lenders decide your personal loan eligibility amount and the interest rate. Your credit score is a three-digit numeric score that determines your creditworthiness. The score reflects your repayment capacity, credit utilization ratio, mixed bags of loans and others. The score ranges between 300-900 with 300 being the lowest and 900 the highest. Having a high credit score offers you a high loan amount at a low-interest rate, whereas a low score can lead to loan rejection or approval of the same at a high-interest rate.
How to check personal loan eligibility online?
You can check personal loan eligibility online before applying for a loan. To do so, you can use a personal loan eligibility calculator that helps you get an estimate of the personal loan amount you are eligible to get.
Here is how you can check your personal loan eligibility online:
- Open the personal loan eligibility calculator. You can do so by visiting the online webpage here: https://upwards.in/personal-loan-eligibility-calculator
- Enter your details like your name, mobile, email ID, employer name, PAN, Pin code and salary
- Once you enter these details, the tool will display the amount you are eligible to get
- Once you know the amount you are eligible to get, you can then continue with making a personal loan application online.