Personal Loan Eligibility- Things that You Must Keep in Mind

You should carefully view and check all eligibility guidelines for personal loans before applying. This will help you get an idea of whether you are eligible to get a personal loan or not.

Personal Loan Eligibility

It is highly recommended that you check personal loan eligibility before applying for a personal loan. What are personal loans? These are basically unsecured loans, i.e. loans which do not require any collateral or security to be provided. This means that you will have to adhere to some other personal loan eligibility criteria which predominantly involve your age, nature of employment and most importantly, your monthly income and ability to repay. Your credit score will also be of paramount importance in assessing your eligibility for a personal loan.

Personal loans are mostly for smaller amounts in comparison to secured loans such as home loans or auto loans. However, the tenures are smaller and may range between 36-60 months on an average. The rates of interest are also comparatively higher than secured loans since these bank loans are completely unsecured. You can apply for an online loan in most cases and instant personal loan facilities may also be availed if you meet the eligibility criteria perfectly for the amount that you have applied for. Salaried borrowers are mostly eligible for applying for personal loans including professionals working in private/MNC/government entities and self-employed professionals such as CA, doctors and architects. Eligible age ranges between 21 and 60 years on an average while the minimum income threshold for loan eligibility is Rs. 25,000 each month for salaried professionals in most cases while it may be Rs. 5 lakh in gross annual receipts for professionals. Work experience of at least three years or more may also be required for being eligible to take a personal loan.

SBI personal loan eligibility and other banks/lenders

You should compare online interest rates offered by various lenders before finalizing one. You can readily view the SBI personal loan interest rate for salary account online along with rates of interest offered by other lenders. You can check Indiabulls Dhani personal loan eligibility and eligibility for other loans online itself.

Here is a table that will help you get an idea of the eligibility guidelines at leading banks and financial institutions:

Learning more about the eligibility criteria for personal loans

• Minimum and Maximum age limit to be between 21-65 years.
• Loan amount may be up to Rs. 25 lakh in most cases.
• Net monthly income should be Rs. 20-25,000 at least for salaried professionals.
• Salaried customers will have more personal loan choices and personal loan options will also be available for self-employed and business borrowers.
• Existing EMIs and debts will lower overall loan eligibility.
• 3 years of work experience is required as a minimum. Some financial institutions may offer loans with a year of working experience.
• The CIBIL score for personal loans is at least 650 and upwards along with a good credit history. A score of 750 and above is recommended for a smoother loan application.
• Loan eligibility is usually calculated through the multiplier method, i.e. applying any multiplier to the net salary (take-home) for calculating overall loan eligibility. The multiplier that is applied is the function of the take-home salary and company profile. The higher your salary and better company profile, the higher will be your loan eligibility and this multiplier. The figure usually ranges between 9 and 27.
• Eligibility may also be calculated with the FOIR (fixed obligation income ratio)- In this system, the loan amount eligibility will be calculated on the basis of the maximum EMI or installment that you can easily repay from your net income post covering other fixed expenditure including EMIs and rent. 50-75% of the net income is usually taken as the EMI servicing capability along with meeting fixed obligations and other debts.

You can use a personal loan EMI calculator online to work out the amount that you will have to pay every month for the desired loan amount, provided you are eligible for the same.

Also Read: NOC After Closing Your Home Loan