Complete Details About Personal Loan Eligibility Criteria
Complete Details About Personal Loan Eligibility Criteria. ,Personal loans are one of the most popular loan products offered by financial institutions. They are unsecured loans that can be used for a variety of purposes, such as home renovation, wedding expenses, medical emergencies, and more. However, before applying for a personal loan, it is essential to understand the eligibility criteria set by lenders.
Personal Loan Eligibility Criteria
Here are the most common eligibility criteria that lenders consider when evaluating a personal loan application:
The minimum age to apply for a personal loan is 21 years, while the maximum age is usually 60-65 years, depending on the lender’s policy. This age requirement ensures that the borrower has enough time to repay the loan.
The borrower’s income is a crucial factor in determining their eligibility for a personal loan. The lender needs to verify that the borrower has a stable income source to ensure timely repayment of the loan. The minimum income requirement may vary from one lender to another, but it is usually around Rs. 15,000-20,000 per month.
The borrower must be employed with a stable job for a minimum of 6-12 months, depending on the lender’s policy. Self-employed individuals may also be eligible for a personal loan, provided they have a stable income source and meet other eligibility criteria.
The credit score is an essential factor that determines the borrower’s creditworthiness. A credit score is a numerical representation of the borrower’s credit history, which indicates their ability to repay the loan. A credit score of 750 or above is considered good and increases the chances of loan approval.
Complete Details About Personal Loan Eligibility Criteria
Apart from the credit score, lenders also consider the borrower’s credit history, which includes their repayment track record, outstanding debts, and credit utilization. A good credit history indicates the borrower’s responsible behavior towards credit, which increases their chances of loan approval.
The loan amount that the borrower is eligible for depends on their income, credit score, and credit history. The lender may offer a loan amount ranging from Rs. 50,000 to Rs. 50 lakhs, depending on the borrower’s eligibility.
The borrower’s existing loan obligations may impact their eligibility for a personal loan. The lender may consider the borrower’s debt-to-income ratio, which is the ratio of the borrower’s monthly debt obligations to their monthly income. If the borrower’s debt-to-income ratio is high, it may affect their chances of loan approval.
Relationship with the Lender:
Lenders may consider the borrower’s relationship with them when evaluating their eligibility for a personal loan. If the borrower has a good relationship with the lender and has maintained a good repayment track record, it may increase their chances of loan approval.
Documents Required for Personal Loan
Here are the common documents required to apply for a personal loan:
Identity Proof – Aadhaar card, PAN card, passport, driving license, voter ID card, etc.
Address Proof – Aadhaar card, passport, driving license, voter ID card, utility bills, etc.
Income Proof – Salary slips, bank statements, income tax returns, Form 16, etc.
Employment Proof – Offer letter, appointment letter, etc.
Photographs – Passport size photographs of the borrower.
The banks and NBFCs determine your credit eligibility based on various factors, including your credit score and income, as well as age as well as your employer’s profile. The following are the personal loan eligibility guidelines established by the top lenders, along with suggestions on how you can improve them to improve your likelihood of approval for a loan.
Personal Qualifications for Loan Eligibility for self-employed and salaried applicants:
|Particulars||For Salaried||For Self-employed|
|Age Limit||18 – 60 years||21 – 65 years|
|Minimum Income (may vary across lenders)||Rs. 15,000 per month||Rs. 15 lakh p.a.|
|Minimum Work Exp./ Business Continuity||1 year (6 months with current employer)||2 years of business continuity|
|Credit Score||Preferably 750 and above|
Personal Eligibility Criteria for Loans of Top Banks & NBFCs
|Lenders||Eligible Loan Amount||Minimum Eligible Income||Eligible Age|
|Axis Bank||Up to Rs. 15 Lakh||Rs. 15,000 per month||21-60 years|
|Bajaj Finserv||Up to Rs. 25 Lakh||Rs. 25,000 per month||21-67 years|
|Fullerton India||Up to Rs. 25 Lakh||Rs. 20,000 per month||21-60 years|
|HDFC Bank||Up to Rs. 40 Lakh||Rs. 25,000 per month||21-60 years|
|ICICI Bank||Up to Rs. 25 Lakh||Rs. 17,500 per month||23-58 years|
|IDFC First Bank||Up to Rs. 40 Lakh||Rs. 20,000 per month||23-65 years|
|IndusInd Bank||Up to Rs. 15 Lakh||Rs. 25,000 per month||21-60 years|
|Kotak Mahindra Bank||Up to Rs. 25 lakh||Rs. 25,000 per month||21-58 years|
|Money View||Up to Rs. 5 Lakh||Rs. 13,500 per month||21-57 years|
|PaySense||Up to Rs. 5 Lakh||Rs. 15,000 per month||21-60 years|
|Punjab National Bank||Up to Rs. 25 Lakh||Rs. 15,000 per month||Above 18 years|
|Standard Chartered Bank||Up to Rs. 50 Lakh||Over Rs. 22,000 per month||22-58 years|
|State Bank of India||Up to Rs. 20 Lakh||Rs. 15,000 per month||Above 18 years|
|Tata Capital||Up to Rs. 25 Lakh||Rs. 15,000 per month||21-58 years|
|YES Bank||Up to Rs. 40 Lakh||On a case by case basis||22-60 years|
Note: Data as of 1 December 2022
Personal loans are a convenient way to meet various financial needs. However, before applying for a personal loan, it is essential to understand the eligibility criteria set by the lender. The borrower must meet the minimum age requirement, have a stable income source, a good credit score and credit history, and meet other eligibility criteria as specified by the lender. The borrower must also submit the necessary documents to apply for a personal loan.
Q. What amount of personal loan can I qualify for depending on my income?
Most lenders use the Multiplier Method and the EMI/NMI Ratio, or the combination of both methods to determine the eligibility of your personal loan. With the Multiplier Method, lenders calculate the personal loan amounts on the base of a predetermined multiplier (ranging between 10 and 24x) of the borrower’s annual net income. The EMI/NMI ratio, on the other hand, refers to the proportion of your monthly net income (NMI) that is used for servicing your current EMIs as well in that as the EMI of the loan. Most lenders prefer to approve personal loans to people with an EMI/NMI ratio that is between 50-55 percent.
The above methods of personal loan amount calculation could be tedious and time-consuming for many, which is why some lenders offer online calculators for personal loan eligibility to aid prospective customers in knowing the amount of their personal loan that is eligible quickly and with ease. These calculators for personal loan eligibility online offer results within a matter of seconds by using a handful of basic information like their income per month, duration of the loan, and personal loan interest rate and EMIs (if they have any).
Q. Do I qualify for an online personal loan with the lowest salary?
If you earn a small salary, you could be eligible to get personal loans. This is because not every lender has a minimum amount that is required to be eligible for an individual loan. However, the amount that is approved will generally be lower than the minimum and you may also be charged a substantial percentage of the interest.
Click to discover the banks or NBFCs that do not have minimum salary requirements.
Q. How much is the minimum amount of money that is required to qualify for the SBI credit?
The minimum wage that is required to qualify to be eligible for an SBI personal loan is. 15,000. But having the minimum wage requirement does not guarantee the loan request will get accepted.