What affects Personal Loan eligibility?
Do you want to buy a new car? Do you want to manage your medical expenses? If yes, then you should probably think about taking a personal loan. From handling day-to-day expenses to managing emergency-related expenses, everything is easily possible with a personal loan.
A personal loan is an unsecured loan from a bank or lender. But before applying for a personal loan, you should know the eligibility criteria.
Once you know the eligibility criteria, you have to try to become eligible for it before. It will reduce the chance of rejection of your loan application. So, keep reading the article to know about personal loan eligibility.
Personal loan eligibility
The eligibility criteria for a personal loan vary slightly from one lender to another. The basic criteria are based on age, income, occupation, the capacity of loan repayment and place of residency.
Regular income source
Income is one of the most important factors that increases your chances of becoming eligible for a personal loan if certain conditions are met.
To become eligible for a personal loan, you should have a regular income source. You are ready to take the personal loan if you are:
- A professional
- A salaried individual
- A self-employed businessperson
- An employee of any public sector or private limited company
Age is another important factor that affects the personal loan eligibility criteria. To become eligible for a personal loan, your age must be lie between 21 to 60 years.
Your basic salary must be 15,000 INR or more to become eligible for a personal loan. Keep in mind that some banks expect to see the proof of your employment for at least 2 years or at least 1 year with your current employer.
Credit history or CIBIL score
Your eligibility for a personal loan is also affected by the company in which you are working or also your credit history. All the major banks are obligated to report the EMI failed payments and defaults on credit card payments to credit bureaus.
In this way, your CIBIL score is affected negatively. You should not take this case lightly or neglect it because it needs a lot of effort and time to build a good credit score.
Guarantor and credit history
In a few cases, some banks ask you to provide a guarantor to become eligible for a personal loan. If you do not have any guarantor, it is a red flag that the banks are not satisfied with your eligibility or current qualifications.
So, in this case, it will be good if your guarantor has a good credit score to get approval for a personal loan. Else, you will not be able to avail a personal loan.
Here are all the factors that affect the personal loan eligibility criteria. You must take care of your employment proof, credit score, CIBIL score, salary and source of income if you want to improve your chances of approval for a personal loan.