Personal loans are meant to fulfil several financial needs including, medical emergencies, higher education, and many more. However, just like any other loan form, it also has its own set of qualifying conditions. If you don't fulfil the lender's minimal personal loan eligibility requirements, you will either be charged a high-interest rate or your application will be rejected. To avoid this unfavourable situation, read the article all the way through.
To fall within the personal loan eligibility of your lender, keep an eye on the minimum and maximum age limits. The majority of lending institutions have set the minimum age to qualify for this loan to 21. The maximum age, on the other hand, is fixed at 58 years.
This is because the earning potential of the customer declines as they approach retirement. Similarly, if you are under the age of 21, you may be at college and earning nothing. In simple words, we can say that if your age does not meet the lender's eligibility requirements, your application will be denied.
Other than age, another personal loan eligibility criteria talk about the minimum income. Though it is an unsecured form of financing, the lender does not expect you to be in the high-income bracket. With most of the lending institutions, the minimum income to qualify for this loan is Rs 15,000.
However, if you have a higher income, there is a high possibility that you can secure a personal loan of a handsome amount and that too on a low-interest rate.
When you apply for a personal loan, the lending institution assesses your repayment capability. To understand your repayment potential, the lender adds the existing EMI along with the EMI of your fresh loan. If the overall EMI consumes more than 50% of your monthly income, the lender may reject your application.
As such, use a personal loan EMI calculator to avoid rejection and a drop in your credit score. The EMI calculator allows you to estimate your personal loan obligations in advance, making it easier to determine whether or not to apply with a particular lender.
Though this point is not mentioned in the personal loan eligibility section of your preferred lender, the point still plays a role in deciding whether or not you are qualified for a loan.
\When applying for this loan, don't forget to take into account your existing debts such as home loans, mortgage loans, credit card bills, and so on. The existing obligations allow you to self examine your qualifications.
The city in which you live has a direct impact on your way of life. And your lifestyle has an impact on your spending, which is directly tied to your repayment capacity. If you live in a big city, your expenses will be substantially more than if you live in a small town or a distant village.
On the other hand, the average income of salaried and self-employed people residing in urban areas is significantly higher than that of small-town earners.
So, when you are looking for answers about personal loan eligibility, don't forget to address any worries you have about the impact of your current address on your application form.
When checking the personal loan eligibility, don't forget to check the minimum work experience that you will require to obtain the personal loan.
The minimum work experience required is the same with almost every lending institution. If you are a salaried employee, then the minimum amount of experience you require in your existing job is six months. Self-employed individuals, on the other hand, require continuous business experience of 2 years in their existing business.
Apart from that, the lender also checks the soundness of your employer. Regardless of your income, if your employer has a history of late salary payments or a hire-and-fire system, the lender is less likely to approve your loan.
Again, you won't find this point in the personal loan eligibility section of your preferred lender website. When an emergency strikes, we begin contacting numerous lenders and sending multiple emails inquiring about the lender's loan disbursement schedule, maximum interest rate, and other details.
However, all of these behaviours turn you into a hungry borrower, resulting in a credit score downgrade and loan application denial.
When you apply for a loan with your current lender, there is a good chance that your application will be approved. Financial institutions never displease borrowers who have paid their dues on time and have no history of bounced cheques or default.
When applying for a personal loan, you must check your borrower's personal loan eligibility. This will increase the likelihood of your loan being approved. You should also use a personal loan EMI calculator to figure out your EMIs ahead of time.