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Eligibility Criteria for Applying for a Personal Loan in India
Personal loans are the choice of many people to cope with big expenses and to take care of their finances. A personal loan is a kind of unsecured loan that can be used for big personal expenses such as paying medical bills or rebuilding a home, a personal loan is a suitable means of financing your plans. But before applying for a personal loan you should determine the required qualifications. This article will explain everything you want to know about qualifying for a personal loan in India.
Eligibility Criteria for Personal Loans in India
Personal loans are granted by banks, financial institutions and online lending platforms under set terms and conditions. These rules are called eligibility criteria. They help loan providers assess whether you are more likely to pay the debt and thus approve your application. Gaining this insight will make you both more knowledgeable and more successful in the application process.
1. Age Requirements
Predominantly in India, most personal loan platforms demand your age to be between 21 and 60 years of age to be able to apply for a personal loan. A few of them might have different eligible ages so consult them for better understanding.
2. Employment Status and Income
Having a steady job is the usual scenario to obtain a personal loan. One of the primary conditions they look for is to ensure that you have a trustworthy primary source of income that gives you the ability to repay the loan. While the minimum salary requirement tends to change as per different lending platforms, commonly it is between ₹15,000 and ₹25,000 per month for salaried employees. In case you are a sole trader, the evidence that you have a steady income is mandatory. This can be done through tax returns and bank statements.
3. Credit Score
Your credit score is one of the important factors to get eligible for a personal loan. A credit score of 750 or above is generally considered good in India. The higher your score, the possibility of getting loan approval and getting a lower interest rate increases. A lot of personal loan apps available in India conduct free credit score checks. It’s a great idea to check your score first before applying for a loan.
4. Work Experience
Lenders usually require a minimum of 1-2 years of work experience for salaried employees. Besides, if you are self-employed then you may have to give proof that your business has been running for at least 3 years.
5. Residence Stability
Most lenders would generally prefer to have clients who have stayed at the same address for at least one year. This indicates sustainability, which is important for lenders to consider the loan application.
6. Citizenship
To take out a personal loan in India you must be an Indian citizen. Some banks may have provisions for issuing loans both to the Indian citizens living abroad or to the Non-Resident Individuals (NRIs). Yet, it is important to note that the criteria could be different.
Using an Eligibility Calculator for Personal Loans
Many lenders offer an eligibility calculator for personal loans on their websites or apps. You only need to input some basic information like your age, income, and employment details. The calculator will then give you an estimate of how much you might be able to borrow.
Using an eligibility calculator for personal loans can save you a lot of time. It gives you a good idea of your chances before you go through the full application process.
Personal Loan Apps in India
These days, you don’t always need to visit a bank to apply for a loan. Many personal loan apps in India have made the process much simpler. These personal loan apps in India often have more flexible eligibility criteria than traditional banks. They might consider factors beyond just your credit score. Some popular personal loan apps in India include:
- Tata Capital Loan App & Wealth
- MoneyTap
- PaySense
- Fibe
- CASHe
Tips to Improve Your Eligibility
If you’re worried about meeting the eligibility criteria, here are some tips that might help:
1. Improve your credit score: Pay your bills on time and try to reduce your existing debts.
2. Increase your income: Look for ways to boost your earnings, like taking on extra work or starting a side business.
3. Maintain job stability: Staying with one employer for a longer time can improve your chances.
4. Keep your paperwork at the ready: When you organise the paperwork properly, it will automatically work faster.
5. Consider a co-applicant: Besides if you’re solo in this application, asking a co-applicant to help you could work to your advantage.
Conclusion
Applying for and getting a personal loan in India is not difficult in today’s digital lending era. Whenever we apply for a loan, we should never miss out on the eligibility criteria and use different tools such as an eligibility calculator for personal loans to get positive outputs. All banks have different criteria for their loans. So, they should be compared, side by side, to differentiate which one is the best. This way, you can find the best deal that suits your needs and financial situation.
