A personal loan helps to deal with an urgent financial problem that you are unable to deal with using your monthly income. This is usually taken when there is a medical emergency, for a vacation, to meet wedding expenses, to pay for a school or college admission.
Besides, this loan can also help to improve your overall credit score. However, banks and NBFC’s need to be convinced of your credibility before they decide to grant you a loan. You are required to meet their criteria for eligibility to get the loan. Thorough scrutiny of your financial records is carried out to decide if you are an eligible candidate.
The Main Factors That Determine The Eligibility
Unlike the loan against gold, banks do not ask for collateral in the case of personal loans. These loans are unsecured which means the risk faced by the lender is much higher. The loan gets disbursed only after the bank is convinced of the person’s credibility and his/her ability to repay the entire amount. Given below are some of the main factors considered by the bank regarding the applicant.
- Age Of The Applicant
To be an eligible candidate for a personal loan the minimum age requirement is 21 years and the maximum age is 60 years if you are a salaried employee. If you are a self-employed person the age requirement is between 25 years-65 years. This is a rule followed in general by most of the banks. The younger you are the higher your chance of getting a personal loan as you have more years to pay it off.
- Stability Of Job
Stability of employment is a major factor that determines your eligibility for a loan. To be eligible a self-employed person must have at least 5 years of work experience and a salaried employee must have at least 2 years of work experience.
- Company Profile
Working for a reputed organization with a high salary is an added advantage to the applicant. This increases your credibility and you get a personal loan at a minimum rate of interest.
- Credit Rating (CIBIL Score)
A good credit rating ensures you get a loan with options that are flexible when it comes to the total amount, EMI, rate of interest and tenure. A CIBIL score above 750 is considered good.
Good Financial Records
To determine your loan eligibility the bank/NBFC goes through your financial records. Factors that indicate your credit unworthiness like a loan that is overdue or irregularity in re-payments could stop a bank from approving your loan. A good financial record ensures that you get a higher amount as a loan.
The Process Of Application
To apply for a personal loan the following documents needs to be submitted in the bank.
- Duly filled loan application form
- Identity proof with photograph
- Proof of residence
- Proof of employment and income
- Colour photograph (Passport size)
Self-Employed people should attach a one-year bank statement of their current and savings account in addition to the above-mentioned documents. On successful verification of all the documents and their personal credit score, the bank will decide on their loan eligibility and disburse the amount.
You can check your eligibility online before approaching a bank in person. In case you don’t qualify you can take the necessary measures to improve your credit so that your loan application would be accepted and the amount sanctioned.
This blog is maintained by the Finaura team. Finaura is a solution that will help you find the best gold loan solution from gold loan company nearest to you. If you have any queries please feel free to contact us. Call us on +91 484 2388285 or email us at [email protected]