Personal Loan is one of the most popular products among customers. The reason behind its popularity is the convenience and affordable interest rates. Also, an individual doesn’t have to submit any security or collateral against the loan amount. Due to the unsecured nature of this loan, lenders check all the personal and income details related to an individual to reduce the credit risk they face. There are some conditions that an individual has to meet to get a personal loan. This is known as the Personal Loan Eligibility Criteria.
This tends to change from one lender to another. When you decide to opt for a loan, this is one of the most important things to look out for, as without meeting the personal loan eligibility criteria, your application will get rejected. In this article, we will be telling you about everything related to this and also about what are the factors that affect your loan eligibility. By checking these factors, a lender also decides how much personal loan amount an individual can get. You can get the eligible loan amount too by using the Personal Loan Eligibility Calculator. If you want to know more about all of this more, keep reading!
Factors Affecting Personal Loan Eligibility
As you don’t need to submit any kind of security against the loan amount, the eligibility is a very crucial thing to know while opting for a personal loan. There are a few factors that affect your personal loan eligibility such as your age, monthly income, employment type, job history & reputation, existing obligations, etc. Let’s have a look at each of them below and see how they affect your eligibility.
Applicant’s Age:- Every lender has definite age criteria when it comes to giving a personal loan. An individual who is in his early days will have more chances of being eligible for a personal loan than an individual who is close to his retirement days. It is important to check the age-related criteria when opting for a personal loan from your respective lender.
Monthly Income:- This is the most crucial factor that determines your personal loan eligibility. Let’s understand how? Personal loan repayment is done via EMI and this amount will be going off from an applicant’s monthly income only. So, when an individual will have a high income, he or she will have more chances to get a personal loan. Also, such individuals can also get higher loan amounts because of their repayment capacity. Also, sometimes, the income criteria change from one city to another city for the same lender. So, you need to keep this in mind too.
Employment Type:- A personal loan can be availed by both salaried and self-employed individuals. And your employment type is also one of those factors that affect your personal loan eligibility. Salaried employees get a fixed income every month while self-employed individuals may face ups and downs in their businesses and their monthly income can get affected.
Job History and Reputation:- While applying for a personal loan, your eligibility also depends on this factor that how many years you have been working in your company. As different lenders have different eligibility criteria about the job history. A persona working in a company for 5 years will certainly have more chances of being eligible than an individual who has just joined the company.
Existing Obligations:- If you have not any other existing loans or credit card dues, you will have more chances to meet the personal loan eligibility criteria. Existing obligations affect your repayment capacity and it may be possible that you do not get the loan amount as you wanted. So, it is wiser to clear your dues before applying for a personal loan so that you can get the desired loan amount.