Before applying for a Personal Loan, you need to check if you are eligible for it. Here's all you need to know about Personal Loan eligibility criteria
A Personal Loan is a financial product that can give you quick and instant access to a significant sum of money. You can use the loan amount to fund any kind of expenses, be it a medical exigency, a foreign trip, or wedding expenses. A Personal Loan can come to your rescue and meet your immediate cash needs without much hassle. You do not need to mortgage your collateral to avail of the benefits of a Personal Loan, and so, it is an unsecured loan. However, banks only sanction this loan to borrowers they deem eligible. To know more about the eligibility criteria for Personal Loans, read on.
There are some basic eligibility(1) criteria for Personal Loans that you need to meet to avail of the benefits. The eligibility criteria is different for salaried and self-employed individuals.
As a salaried employee looking for a personal loan, you should be:
Self-employed professionals like doctors, chartered accountants, businessmen, etc. are eligible for Personal Loans subject to meeting the Personal Loan eligibility criteria. Such individuals should be:
The Personal Loan eligibility criteria, mentioned above, are indicative and may differ from one lender to another.
A Personal Loan is one of the easiest to procure. So long as you can show that you fit the eligibility criteria for Personal Loan, as set by the lender, your loan can be processed in the quickest time possible. The loan disbursal process is completed with minimal documentation. Generally, it takes 24 hours and at most 72 hours for the disbursal of the loan in your savings account. If you apply for the loan online, you only need to provide scanned soft copies of your documents, based on your employment status.
You can work on your finances and enhance the chances of approval by following some tips. One way to do this is by applying with a co-borrower such as your spouse, parents, etc.
Another way to improve your Personal Loan(3) eligibility is to maintain your Fixed Obligation to Income Ratio (FOIR) below 50% of your monthly income. Other tips and tricks include opting for longer loan repayment tenure, paying off all existing loans, paying your credit card bills on time and maintaining a high credit score.
Besides the eligibility criteria for personal loans, most borrowers are interested in knowing the maximum loan amount they can procure. This amount typically differs from lender to lender. For instance, most banks offer a maximum of INR 50 Lakhs in Personal Loans, whereas NBFCs may offer a smaller amount. Also, for high-value loans, (those exceeding INR 5 Lakhs, the lender may even insist on collateral.
Due to its features like basic eligibility criteria, minimum paperwork and instant disbursal of loan, the Personal Loan is an excellent facility that comes in handy in a moment of crisis. Before applying for the loan, make sure that you use the to Personal Loan Eligibility calculator check the maximum loan amount and the possible interest rate you can get on the loan.
Download the digibank mobile app on your smartphone. Launch the app and click on the "Get Personal Loan" link on the login page
*Disclaimer: This article is for information only. We recommend you get in touch with your income tax advisor or CA for expert advice.