Are you finally planning on taking that long vacation? If yes, then you must consider taking a personal loan as it is the best way to finance a personal or immediate expense. These loans are meant to be convenient and quick and don’t require any collateral or security fee from the borrower.
Furthermore, as the name suggests, this is a loan taken for personal reasons that could be anything from medical expenses, education, and debt consolidation to travelling or funding a wedding. It is to say that the borrower does not need to justify their reasons to the lender in case of a personal loan.
Personal loans are taken for many reasons such as medical expenses, education, and debt consolidation to travelling or funding a wedding.
So, how can you qualify for a personal loan? Read on to find out.
Personal Loan Eligibility Criteria
To get a personal loan, a borrower must meet the following criteria:
*The age of the applicant must lie between 22 to 58 years.
*The applicant must have a regular and stable salary.
*The monthly income of the applicant must be at least Rs.15000.
*The applicant must also have work experience of at least one year.
These are the documents required to fulfil the personal loan eligibility:
Proof of Identity: Documents that are required to establish your credentials like Voter ID Card, Driving license, Passport and Aadhaar Card.
Proof of Residence: Address proof documents like Ration Card / Passport/ Electricity Bill.
Income Documents: A copy of your bank statements for the past six months.
Employment Certificate: The certificate should state applicant has worked for one year of continuous employment.
Lenders look for a good credit score, stable employment, monthly income, existing credit and other factors when evaluating your application for a personal loan.
Points to Keep in Mind While Applying for a Personal Loan
Now that you know how to get personal loans, here are some factors that you should adhere to before applying for the loan.
A Good CIBIL Score
This one is a no-brainer as a good credit score is vital for any loan application. However, in case of a personal loan, there is no collateral fee involved which makes the CIBIL score even more important. This is how the lender can determine your credit history and financial habits. Having a good CIBIL score will help you get lower interest rates and flexible repayment tenure on your personal loan.
Type of Employment
Lenders usually offer loans to salaried professionals, government officials and self-employed individuals in various fields. Salaried and government professionals are preferred by lenders more because of their job stability. Employer reputation can also play a part in your loan application.
For salaried professionals, the monthly income is taken into account which should be more than 15,000, whereas for self-employed individuals annual income is considered by most lenders which should be more than Rs 5 lakhs.
Another factor that determines your qualification is whether you have availed another personal loan. Remember, your chances of qualifying reduce if you have existing credit to repay. Thus, make sure to repay all other loans before you decide to apply for your next one.
Hence, these are some of the factors and criteria you need to adhere to, to qualify for a personal loan.
Have you ever taken a personal loan?
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