Personal Loans are unsecured loans that individuals can take to meet their financial needs. Personal Loan eligibility criteria in India can vary from lender to lender, but there are certain factors that most lenders consider. It can also depend on the loan amount and tenure. Therefore, checking with the specific lender to know the eligibility criteria before applying for a Personal Loan is always advisable.
Personal Loan eligibility criteria and documents required
The Personal Loan eligibility criteria remain constant across all financial institutions. Here are the details:
- Age: The minimum age requirement is usually 21 years, and the maximum age limit is 60-65 years, depending on the lender.
- Income: Most lenders require a minimum monthly income of INR 15,000 to INR 20,000 for salaried and self-employed individuals.
- Employment or Business Stability: Salaried individuals should have a minimum work experience of 6 months, while self-employed individuals should have a stable business with a vintage of at least 2 years.
- Credit Score: A good credit score is usually required by most lenders. A good credit score is 600 or above.
- Documents required: The necessary documents required for Personal Loans include the following:
- KYC documents (Aadhar card, PAN card etc.)
- Income proof
- Bank statements
- Employment proof
- Other documents, as per the lender’s requirements
Tips to improve your Personal Loan eligibility
If you are looking to improve your Personal Loan eligibility in India, here are some tips that may help:
Maintain a good credit score: One of the most crucial elements lenders consider when accepting Personal Loans is a decent credit score. Paying your payments on time, maintaining a low credit card balance, and refraining from applying for several loans will help you raise your credit score.
Lower your debt-to-income ratio: Your debt-to-income ratio (DTI) measures your total debt against your income. Financial institutions prefer debtors with a comparatively low DTI ratio, indicating their ability to repay the loan. To better your DTI ratio, clear your debts, avoid unnecessary expenses, and improve your income.
Increase your income: Financial institutions and best instant loan app prefer individuals with a stable and higher income, indicating their capacity to repay the loan without hassle. So, you can increase your income by working part-time or adding your earnings from secondary sources.
Provide complete and accurate documentation: Ensure you provide all the required documents to the lender, such as income proof, employment proof, and KYC documents. Ensure the documents are accurate and up-to-date to avoid delays in loan processing.
Apply with a co-applicant: Applying for a Personal Loan with a co-applicant who has a good credit score and stable income can increase your chances of loan approval.
Final words
Personal Loans are your ideal financial partner, irrespective of your financial requirements. So, be it a personal one, or if you need to meet any medical emergency, this financing option will not disappoint you. So to get access to it without any hassle by meeting the eligibility parameters and submitting the right documents.
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