Looking for a Personal Loan? Here are 5 criteria you must meet

A personal loan provides fast access to cash to cover an unexpected expense or consolidate high-interest debt for any purpose when the going gets tough. Whether you are a salaried employee or a professional or self-employed, unexpected expenses can arise at any time. You may find yourself looking for an online personal loan eligibility site to apply for one that makes the most sense to you. To be eligible for a personal loan, you have to meet certain criteria which vary from bank to bank. If you want to get instant cash, you need to ensure that you tick all the boxes in a bank’s eligibility criteria, failing which your application can be rejected. While every bank has a defined personal loan eligibility factor, there are standard factors that you should keep in mind before looking up personal loan –

Factor 1 – Payment History

Your payment history carries a lot of weight in your endeavor to check your eligibility for a personal loan. The bank may also check your credit history as an indication of your ability to manage credit. If you have taken loans previously or have even made regular payments towards your loan or credit cards, you will find it easier to apply for a personal loan. This is only one factor, and your application doesn’t solely depend on it.

Factor 2 – Income/Salary

Many banks require applicants to have a regular monthly cash flow to check their affordability to repay a loan. For instance, many banks such as the IndusInd Bank require their applicants to have a minimum monthly income of INR 25,000 for salaried, and INR 40,000 for self-employed individuals. Some banks may not even have this criterion but might still want to verify your source of income to check repayment ability.

Factor 3 – Work Experience

Your work experience might also come in handy before checking your eligibility for a personal loan. For instance, a few banks may have this requirement of you being employed for a minimum of 2 years and another of 1 year in the current organization for salaried employees. On the other hand, they might have a different set of requirements for self-employed individuals, such as a minimum of 5 years of post-qualification experience.

Factor 4 – Your Age

Many banks have minimum and maximum age criteria for securing a personal loan. For instance, banks may require the applicants to be a minimum of 25 years and maximum of 65 years of age for a self-employed individual. On the other hand, it’s 21 and 60 as the minimum and maximum ages for salaried professionals. This is only to ensure that you have repayment capability while you are still working.

Factor 5 – Employer

The kind of employer you work with might also be a factor that banks consider before processing your loan application. For instance, working with a high turnover employer might swing things in your direction. Please note working for a well-known employer is only one factor and not all banks consider this as a criterion for processing personal loan applications.

Before you apply for one, make sure you check for a personal loan eligibility checker with your lender as well as check their online personal loan calculator to understand if you can honor the monthly EMIs after availing the personal loans conveniently. With this information in mind, you will know what documents to prepare in order to apply for a personal loan to manage any unexpected expenses!