A personal loan is an unsecured loan. This means you can avail funds without pledging any collateral. Since you don’t have to go through the verification process for your collateral, the approval and disbursal of funds is quicker.
This, in combination with spending flexibility, makes a personal loan your go-to option in times of need. This is further complemented by the fact that many top-tier lenders have easy-to-meet personal loan eligibility criteria, making it even easier for you to apply for one.
However, before you apply, it is important to know if you are eligible for the loan. Due to varying criteria across lenders, this can be a time-consuming step. However, you can make an assessment by taking into consideration the common factors that lenders look at when checking your personal loan eligibility.
Employment and income
The nature of your employment and your organisation’s reputation play a huge role in qualifying you for a personal loan. If the company you work for is a renowned public-sector entity or a well-established private organisation or MNC, the lender believes that you enjoy income stability. Keeping this in mind, it may offer you favourable loan terms.
Your income is another aspect that is taken into consideration by lending authorities. You will have to maintain a minimum monthly salary in order to be eligible for a loan. This minimum amount varies across lenders and depends on the city you reside in.
Your age is another important factor for your application. Usually, lenders do not accept applications if you are below 23 years of age or over 55 years of age. Applicants who are younger than 23 and older than 55 are likely to have insufficient finances and hence may default on repayment.
Your credit score plays a vital part when it comes to personal loan eligibility. It is a score assigned to you by a credit rating agency, ranges between 300 and 900, and represents your credit behaviour. A high score is indicative of consistent repayment, while a low score indicates poor credit management.
Since a personal loan is an unsecured loan, lenders rely strongly on your credit score to gauge your creditworthiness. Typically, it is recommended that you maintain a score of over 750 when applying for a personal loan. A high score gives you greater negotiating power and allows you to get the best loan deal.
Citizenship and place of residence
Most lenders also require you to be a citizen of India residing within the country. Additionally, based on where you reside, you must earn the minimum monthly salary to secure your personal loan eligibility. For example, Bajaj Finserv offers a Personal Loan in 200+ cities of India and while you must earn at least Rs.35,000 per month to avail this loan in Bangalore, Rs.28,000 per month suffices if you live in Jaipur.
Now that you know the general criteria to qualify for a personal loan, here is how you can check and verify lender-specific requirements.
Visit the lender’s website
To know your lender’s personal loan eligibility requirements, either visit the official website or a branch and speak to a representative. Checking the eligibility requirements on the website is faster and is more convenient.
Use the personal loan eligibility calculator
To check your personal loan eligibility in under a minute, use the personal loan eligibility calculator. This is an easy-to-use online tool that can accurately tell you whether or not you qualify for a personal loan.
However, visit your lender’s website and use the calculator available, as it’s created based on the financial institution’s specific requirements and hence offers an accurate result. In order to find out, typically you only need to enter the following details.
- City of residence
- Date or birth
- Monthly income
- Monthly expenses
If eligible, the calculator will even display how much you can borrow.
Using these two methods, you can surely know if you’re eligible for a personal loan. Next, check if the personal loan interest rate suits your budget. This dictates ease of repayment and you can use the EMI calculator to get a clearer picture of the cost of borrowing.
To have a smooth borrowing experience, pick a Bajaj Finserv Personal Loan. It is incredibly beneficial as it offers up to Rs.25 lakh at a competitive interest rate, with minimal eligibility requirements. Furthermore, you can opt for a tenor that ranges between 12 and 60 months to make repayment stress-free. To get started, all you need to do is check your pre-approved offer and apply using a customised loan deal.
(This article is sponsored by Bajaj Finserv)