Personal loans help meet urgent financial requirements as they are unsecured and do not require you to keep anything as collateral. These loans help meet individual and business expenses and are perfect for emergencies like medical emergencies, weddings, education, and more.
What is Personal Loan Eligibility?
If you are looking to avail a personal loan, it is essential to meet the eligibility criteria of personal loan required by the lenders and financial institutions. The requirements may depend on the lender and might vary, but the basic requirements usually remain the same. You can check your eligibility through the personal loan eligibility calculator on the website of the lender you have chosen. You can fill in the details, and it will show you the loan amount for which you are eligible.
Factors Deciding your Personal Loan Eligibility are:
Being one of the most important parameters that the lenders consider to decide your personal loan eligibility, employment plays a crucial role. You must be either salaried or self-employed and have a stable source of income. Lenders prefer to lend loans to people with a regular income as it also makes sure that they can repay the amount.
● Credit Score:
Another critical factor that determines your loan eligibility is your credit score, as it shows your creditworthiness. It also showcases your credit history and whether you have repaid the credit amount on time or have defaulted the payment at any time. Your credit score is affected by your outstanding debt, the total number of credit accounts, the credit history length, and more. All this comprises a credit report which is carefully analyzed before lending money. A credit score of 600-700 is considered to be good and viable for you to get a loan.
● Work Experience:
Your total work experience also plays an essential role while applying for a personal loan online. The lenders check your work experience and prefer that you have worked for at least six months to a year to be eligible for the personal loan. If you have been steadily employed for a long period, it also shows your creditworthiness and makes it easier for the lender to decide.
Your age plays a crucial part in determining your loan eligibility, and it is essential that you are a minimum of 23 years old and a maximum of 60 years. Most lenders consider this bar with little variations.
The amount of salary you earn also decides the amount of loan you can get. It is also an essential factor to determine your personal loan eligibility and plays a part in determining if your application will get approved.
● Documentation Proof:
It is also vital to have all the essential documents, including your age proof, identity proof, citizenship proof, KYC documents, salary slips, and bank statements. Without these documents, there are chances of you not being eligible for the loan, and it might be difficult for your application to approve.
● Employment Category:
The companies are classified into categories, and depending on the company's risk profile; it might be more comfortable or challenging to get a loan. If you are working in a company with a low-risk profile, it might speed up the application approval, and if it is a high-risk company, it might get challenging to get a loan.
Therefore, the factors mentioned above play a crucial role and are considered by the lenders to decide your personal loan eligibility. You must make sure that you meet these requirements before applying for a loan to be eligible. If you fail to meet the criteria, it might get challenging to get approval for the loan.