While a personal loan is a great way to handle unexpected financial mishaps, not everyone is eligible for them. The terms and eligibility parameters of these loans are likely to vary depending on the lending institution you chose. There are, however, some basic requirements that are almost the same for every institution. In this blog, we will discuss these requirements in detail.
Age is one of the crucial factors for determining your personal loan eligibility. Usually personal loans are available to people falling between the age bracket of 21 to 58 years. So, if you apply for a loan with retirement lurking at the corner, the possibility of it getting approved is on the lower side. However, if you opt for the loan when you are just starting your career, chances are, you will be approved for it if you clear the other essential parameters.
Right after age, the very next parameter is your financial stability. Both banks and alternative financial institutions will consider your stability before approving the application. Do note that the eligibility criteria of these loans different for salaried and self-employed professionals.
Salaried professionals usually need to have a professional experience of at least two years. What’s more, they are also required to spend at least one year at their current jobs. This means, if you have the habit of switching from one job to another, a bit too frequently, your chances of approval are fairly low.
Unlike salaried professionals, self-employed individuals need to have an overall experience of 5 years, whereby they’ve spent two years in their current business.
These numbers, however, are completely flexible. They will depend on the lending institution you choose.
Yes, your income plays a determining role in the approval process of instant personal loans. You are likely to qualify for a higher amount if your salary is on the higher side. But fret not, if you don’t yet earn more! Alternative lenders like Qbera offers personal loans to people with a monthly salary of Rs 20,000. So, as long as you meet every other parameter, your application is likely to be approved on our platform.
Credit Score for Instant Loans in India
You credit report pays a vital role in assessing your personal loan eligibility. Since this report offers a complete insight on your financial habits, banks/lenders use it to check your creditworthiness. Your credit score is likely to be lower if you’ve defaulted on payments a bit too often. It will also be low if your debt to income ratio is high. This means if you have multiple outstanding credit bills against your name, your chances of getting approved for the loan is low.
If your credit score is low, it is better to work on it before applying for a new loan.
What Documents Will I Need?
- A copy of your adhaar card.
- A copy of your pan card.
- Bank statements over the last two years.
- Salary receipts for the last three years.
- Tax receipts.
Now that you fully know of the factors that determine your eligibility for personal loans, go ahead, explore your options, and make an informed choice!