Be it a medical ailment, sudden wedding expenses or a family vacation, one should always be financially ready to tackle any situation. And, to make you financially secure, a personal loan always comes handy. With instant approval and fastest disbursal feature, personal loans are one of the most popular means of financing available today, But are you personal loan eligible? Is your eligibility good enough to enjoy a hassle-free personal loan journey? Before approving any personal loan application, the first thing that lenders do is to check the eligibility of a borrower. If a borrower meets the required criteria, he/she can expect to enjoy plenty of benefits. Factors, like maintaining a good cibil score, paying existing loans and credit card bills on time, avoiding multiple loan applications, etc, will help in boosting your personal loan eligibility. Thus, making your credit profile appealing in the eyes of the lenders.
What is Personal Loan Eligibility?
A personal loan is an unsecured loan, which means a borrower doesn’t need to give any security or collateral to the lender to get this loan. Thus, it becomes important for lenders to trust those borrowers whose credit profile is less risky. And, personal loan eligibility helps in knowing the credit profile of a borrower in a better manner. Personal loan eligibility consists of various factors such as credit score, repayment history, employment status (salaried/self-employed), category of the employer (CAT A, CAT B), etc. In case you are wondering how to check personal loan eligibility, take a look at the points below. Yes, apart from the parameters mentioned above, lenders also consider other factors like:
- Age: 21-58 (salaried), 23-65(self-employed)
- Income: 20,000(non-metro cities), 35,000(metro cities)
- Monthly Expenses
- Total Job/Work Experience
- Income & Job Stability
- Any Other Loan/Liability
- Complete Documents:
- For Salaried Person
- Identity Proof
- Address Proof
- Income Proof: Salary Slips of last 3 months
- Last 6 Months Bank Statements
- Form 16
- For Self Employed Person
- Identity Proof
- Address Proof
- Lastest ITR Details
- Business Community Proof
- Business Address Proof
- For Salaried Person
Top 5 Way to Boost Your Personal Loan Eligibility
1. Build and Maintain a Good Cibil Score: If you are someone whose cibil score is low or poor, the first step is to improve your score. In case of a personal loan, a score of above 750 out of 900 is considered to be good enough for grabbing the best deal. So, if your score is below the same, there are higher chances of personal loan rejection as your credit profile is risky, hence is not eligible for a personal loan.
Steps You Should Take to Improve and Maintain a Good Cibil Score:
- Timely Repayments
- Pay Dues in Full
- Avoid Taking More Than one Loan/Credit Card(until & unless its an urgency)
- Do Not Send Multiple Loans/Credit Card Applications
- Stop Checking Your Score Too Often
- Say No to Complete Debt Settlement
- Consolidate Your Loan into One
- Keep Your Credit Limit/Utilization in Check
These steps will not only help in building a good CIBIL score but also allow you to maintain a three-digit numeric summary. A healthy CIBIL score is always a gateway for a hassle-free personal loan journey and the best answer of how to avoid personal loan rejection.
2. Include a Co-applicant/Guarantor: Income and CIBIL both are the most important factors that can make or break the deal for you. Thus, plays a pivotal role in your personal loan eligibility also. So, if a borrower’s income and CIBIL score is less as per the required eligibility criteria of a lender, clubbing a co-applicant or guarantor would solve the purpose here. If your co-applicants/guarantor’s income and credit history is good, you can become eligible to avail a personal loan as a lender will consider the same. Well, in such a case, the co-applicant/guarantor is equally liable to repay the loan to the lender.
3.Category of the Employer/Employee: Another prominent feature that boosts your personal loan eligibility in the category of your employer. Individuals working in CAT A, CAT B or a renowned MNC come with the minimum risk factor, hence high eligibility. Also, if you are a government employee, which means you have a stable source of income along with job stability. Hence, such a credit profile automatically appeals to the lender, making you personal loan eligible.
4. Company Tie up and Salary Account: If the company you work in has a tie-up with a reputed lender from where your salary gets credited, you are personal loan eligible. Yes, loan repayment is always a primary concern of the lenders and having a salary account means a borrower will have a regular source of income. Thus, fewer chances of loan default. Here, sharing a healthy relationship with your lender also helps in boosting your eligibility as one can negotiate on many things.
5. Consolidate Your Loan into One: Lenders always thoroughly check the credit profile of a borrower to reduce the possibility of personal loan default. And, evaluating the profile of a borrower on one prime parameter like any other loan or existing liability is crucial. If a borrower is already loaded with an existing loan or he/she has an additional liability, there are higher chances of missing a loan payment, which leads to default. Thus, it is advisable to consolidate all your existing loans into one so that it would be easy for you to repay one loan, instead of managing many.