Personal Loans are the most widely availed financial product in the Indian market today. Majority of these loans are collateral-free or unsecured, meaning borrowers don’t need to pledge any assets or other securities to be eligible. Another great thing about these loans is the no end-use restrictions they come with: they can be used for various purposes. These loans can service all requirements, from jetting off on a much-needed holiday to having a fairytale wedding, from paying for your child’s education overseas to meeting sudden medical emergencies.
In an increasingly digital and corporate India, getting a Personal Loan has become easier and quicker. Potential borrowers can simply apply for these loans online, wherever, whenever. If you too are looking at applying for a Personal Loan online, you must check your eligibility against the criteria of the lender you’re looking at applying. In this post, we will take you through the basic eligibility criteria for Personal Loans and how you can check your eligibility online.
What is Personal Loan Eligibility?
Eligibility for getting a Personal Loan simply refers to the criteria (requirements) set by a lender to determine whether you are eligible (or not) for a Personal Loan. While the exact eligibility criteria may vary from one lender to another, some basic common criteria are as follows:
- Age: You should be at least 21 to apply for a Personal Loan from most banks and Non-Banking Finacial Companies (NBFCs). This is the age by which most people start working. Again, while the maximum age limit may vary from lender to lender, it is usually around 60-65 years.
- Income: You should have a regular source of income, either through a salary or a minimum annual turnover (for self-employed applicants) to be eligible for a Personal Loan. The minimum income requirement for salaried professionals may vary from lender to lender, but it is usually set at a minimum range of around Rs 20,000 to Rs 30,000 per month.
- Employment: You must be a salaried employee or a self-employed professional/business owner to be eligible for a Personal Loan. The minimum work experience required could vary according to the lender you choose but is usually around 2-3 years. A similar period is required for self-employed individuals.
- Credit score: Your credit score is crucial in determining your eligibility for a Personal Loan from a lender. A credit score of 700 or above is considered good, and above 800 is exceptional. Good credit standings will certainly increase your chances of getting a loan at a lower interest rate, along with other exclusive deals.
How to Check Personal Loan Eligibility Online?
Remember, as a responsible borrower, you must carefully weigh your eligibility before applying for a loan. You can easily check your Personal Loan eligibility online by following these simple steps:
Step 1: Visit the lender’s website from whom you wish to get a Personal Loan.
Step 2: Look for the ‘Personal Loan Eligibility Calculator’ or the ‘Personal Loan Eligibility Check’ option on the website
Step 3: Enter the required details, which include your age, income, employment details, and credit score.
Step 4: The calculator will calculate your eligibility based on the information you enter and tell you if you are eligible for a Personal Loan.
Step 5: You can apply for the loan if you are eligible.
Remember, you should weigh your eligibility with several online lenders to see which deals are coming your way. However, do not apply for multiple Personal Loans with different institutions; this is a red flag against your loan application. Lenders will know you’re applying here and there, which could also negatively impact your credit score, especially if multiple applications get rejected.
Things to Keep in Mind While Checking Personal Loan Eligibility
For smarter, better borrowing, there are a few things you should keep in mind while checking your Personal Loan eligibility:
- Check the eligibility criteria of multiple lenders: The eligibility criteria for Personal Loans may vary for different lenders and financial organisations. It’s important as options are available for the specific requirements of customers. This way, you will find a loan offer that suits your finances.
- Use an online eligibility calculator: Using an online eligibility calculator not only saves time and effort but also gives you a clear picture of your eligibility without the need to visit any branch.
- Check your credit score: Your credit score is crucial in determining your creditworthiness based on your history of paying off debts. The score ranges from 300-900, and a score above 700 is considered good. A lower score reflects bad debt management and may throw a spanner in the works for your loan application or leave you with a higher interest rate.
- Compare the interest rates: Your loan eligibility may be more in sync with some lenders’ criteria than others. This may well affect the rate of interest offered, examine and compare these rates.
- Costs associated with Personal loans: Personal Loans come with processing charges, prepayment fees and late payment penalties. However, you may be eligible for a special process fee waiver with no documentation required, as is the case for selected customers of ICICI Bank. Before you apply, check for associated fees the lender will charge and whether you can waive them off according to your eligibility.
- Be aware of false claims and offers: You may come across lenders offering unbelievably low-interest-rate Personal Loans with next to no eligibility criteria. Alert! The answer will lie in the fine print, and these too-good-to-be-true loans often are exactly that. These loans could even be promised with floating rates of interest. These may appear low at first but can increase substantially over a period of time.
A quick online application and approval for a much-needed Personal Loan are more possible today than previously. Millions of Indians have benefited from these collateral-free low-risk financial products. However, quite a few have ended up hurting their credit scores and getting rejected on their loan applications to boot. Not to mention falling for phoney offers. Look for well-reputed and transparent lenders, then settle for the one offering the best Personal Loan according to your eligibility. This is bound to stand you in good financial stead and help you meet the purpose for which you are taking the loan in the first place.
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