In this article, i will help you to find detailed information on the eligibility criteria to apply for a personal loan.
While applying for the Personal Loan, Banks and NBFCs check the eligibility of the individual. Lenders consider the following factors to accept the loan application.
Lenders preferred to provide personal loans to salaried individuals because the documentation is simple, and they have a regular income.
For Self-Employed individuals, Lenders seek multiple documents to accept the loan application.
To process the application, a person must be an Indian citizen, and the lenders depend upon the following list of criteria.
Credit Score
The credit score is a three-digit number that reflects creditworthiness and the past payment history that will show how you repay. Banks and NBFCs consider 700 as a good credit score, and having more than 750 CIBIL score is regarded as excellent.
The lender checks the credit score to test the ability of repayment. Your past payment history and number of loan accounts shown in the credit score.
Nowadays, most of the lenders using RBI approved credit bureaus, which are CIBIL and Experian. You can also check your credit score by visiting the CIBIL website, and you can activate the alerts.
Whenever there is a change in your credit score, you will receive a notification once you are activated alerts on the CIBIL website.
Company You are Working
For Salaried individuals, lenders check the company profile to sanction the loan. If the company not registered under MCA (Ministry of Corporate Affairs), there is fewer chances for loan approval.
If you are working in companies like Amazon, Accenture, Google, Infosys, Wipro, and Cognizant, there are more chances to get the personal loan.
Banks and NBFCs provide special offers to the employees who are working in MNCs. Banks internally categorize the companies. Based on the category, banks calculate the loan amount and interest rates. A person who falls under the “A category ” can receive the highest loan amount with the lowest interest rates.
Income Source
Based on the regular income source, lenders prefer to sanction the loans. For a salaried individual, some of the banks endorse personal loan with the minimum salary of 20,000 Rs. Most of the lenders accept the application with a monthly salary of 25,000 Rs.
For Self Employed individuals, They need to show the continuity of the business operations for the last 2-3 years. Banks ask for the IT (Income Tax ) returns for the past 2-3 Years.
The sanction of the loan amount depends upon the income. the higher income you have, there are higher chances to get the highest loan amount.
Some of the Banks require the highest minimum income for the persons who are staying in a rental house.
City of Living
Lenders prefer to approve personal loans to the individuals who are living in towns like Hyderabad and Bangalore. Because the banks can easily reach out to the applicant and consider that the average income of the urban resident is high compared with the income of the person residing in small towns.
If you are residing in the city like Bangalore and looking for Personal Loan in Bangalore, You will receive tons of offers.
Age
Banks accept the application from the applicants with the minimum age of 21 Years, and the maximum age will be 60 years; however, lenders prefer to take the loan application with the age of 23-59 Years.
Current EMIs
Depends upon the payment of existing EMIs, the eligibility of the personal loan will depend. Lenders check the eligibility of the repayment based upon existing EMIs. If a person is paying more EMIs considered as less priority.
The Utilization of the Credit Cards
Utilizing the high credit card amount will affect your credit score. It may cause in decreasing of the CIBIL score.
Lenders consider that you are going to debt by utilizing more amounts in credit cards. Its better to maintain a consolidated amount of 60% of the total number of all the credit cards.
If it is less dont apply for new credit cards, contact the credit card issuer to increase the credit limits.
Submission of Documents
While going for the application, the salaried applicant must produce the following documents. Banks ask for the physical copy of the materials, and bank executives will collect the same.
- PAN Card.
- Salary Slips
- Bank Statements.
- Address Proof
Some of the banks and NBFCs accept the scanned copy of the documents.
If a person failed to provide the proper documents, there are plenty of chances for the rejection of the loan application
In Conclusion
When it comes to the personal loan application, it is advisable not to apply with the multiple lenders at the same time and check your credit score before applying. Check with various banks and compare interest rates. If you are using the NBFCs, the interest will be high, and the time for the disbursal is minimum. It is suggestible to apply with the banks in which you are receiving your salary.
