Personal Loan Eligibility Factors That You Should Know

In the world we live, money makes a person powerful and weak depending on the quantity someone has. Money fulfills our personal needs as well as earthly desires. Sometimes life can throw you a situation where you will need urgent money to fulfill your needs. What should be the ideal solution for this? Well, there are several lenders that provide the option of personal loan to customers with which they can satiate their requirements. When we say lenders, we are referring to Banks and Non-banking Financial Institutions (NBFCs) from where you can get money at affordable interest rates.

But there is an important aspect that several people tend to ignore when going for a personal loan. This factor is the Personal Loan Eligibility which means what is the maximum loan amount that you can get as a personal loan from lenders. Since this loan option is a totally unsecured loan; it means you don’t have to pledge any kind of collateral against the loan amount. Lenders don’t have anything to fall back on, so they double check on the eligibility criteria. Here, we will discuss the factors that affect your personal loan eligibility. Let’s start.  

We are showing all such factors that can affect your Personal Loan Eligibility below. Please look.

  • Your Monthly Income plays a huge role in determining your eligibility for a personal loan. The reason: if you have a high income, you can set off a large portion towards the repayment of your loan. Thus, higher repayment capacity. Lenders like to provide a higher loan amount to such individuals as compared to people with lower monthly income. 
  • Credit Score defines how responsible a person has been with his or her repayment behavior. In short, credit score defines your creditworthiness. If you have a high credit score which is considered to be 750 or above, you can easily get a personal loan and that too, a higher loan amount. 
  • One of the important factors that also affects your eligibility is your Age. Lenders like to check if you have sufficient working years remaining so that you can repay the loan without any hassle. The suitale age criteria for salaried people is 23 to 58 years while for self-employed, this criteria ranges from 28 to 65 years.
  • Lenders also like to see how much work experience an individual has before sanctioning the personal loan. A person who has been working in a reputed company for the last 3 years will have more chances to get a loan as compared to an individual who has just joined in the company.
  • Your existing obligations will also work towards defining your personal loan eligibility. Let’s understand how? If you already have a Loan or Credit Card EMI, your repayment capacity will be low. Any lender would want to make sure that you have sufficient part of monthly income from which you can pay your personal loan EMI. 

How to use Personal Loan Eligibility Calculator?

Lenders also offer an amazing tool with which customers can know the maximum loan amount they can get. Just put a few details such as Gross Monthly Income, Existing obligations, Required Loan Amount and Residing City. As soon as you feed all these details into the tool, you will get the maximum loan amount. However, this will not be the final loan amount.