Let’s face it. Most of us are neither Uncle Scrooge nor Rockefeller to be unperturbed by financial issues. So, we must build our savings and an Emergency Fund to battle financial emergencies, which have a tendency to recur. But we know from experience that no matter how strong our financial plan, we are never quite prepared for a financial emergency. That’s why we have Personal Loans.
If you are in need of a Personal Loan, there’s something really important you need to understand. Let’s talk Personal Loan ELIGIBILITY! Prior to applying for a Personal Loan, it is absolutely necessary to know the factors that determine your eligibility for the loan.
Additional Reading: Personal Loan Eligibility For Self-Employed People
In this article, we’ll walk you through the ABCs of Personal Loan eligibility. Read on:
How Old Are You?
Age is one of the most important defining factors of Personal Loan eligibility.
- Salaried individuals need to be between the age of 21 and 61 years.
- If you’re self-employed, 21 to 60 years is the age range to be eligible for a Personal Loan.
So, if you opt for a Personal Loan with retirement looming around the corner, the chances of your loan getting sanctioned are lower. But if you are at the younger end of the age bar, banks will readily offer a Personal Loan to you, as long as you clear the following:
Financial stability is something that banks always look into before processing a Personal Loan application. The Personal Loan eligibility criteria for salaried individuals is different from that for self-employed ones.
A salaried person needs to have a minimum of 2 years of professional experience and should have spent at least 1 year in their current profession. On the other hand, a self-employed person is considered eligible for a Personal Loan only if he/she has a minimum 5 years of total experience and at least 2 years of experience in the current business. These numbers are flexible though, varying from bank to bank. This means that a bank might be hesitant to grant a loan to a fresher at work.
Additional Reading: How To Calculate Your Loan Eligibility!
The size of your paycheck is another important Personal Loan eligibility factor. The Personal Loan amount that gets sanctioned is directly proportional to your earnings. So, the more your annual turnover or salary, higher the loan amount you are eligible to receive.
Additional Reading: Are You `Loan Eligible’ ?
Your financial history plays a major role in deciding your eligibility for a Personal Loan. This is where your Credit Score comes into play. Delays and defaults in paying loan EMIs and Credit Card bills lowers your Credit Score. And the lower your credit score, the lower your chances of being eligible for a loan. So, improve your Credit Score before applying for a loan. A good Credit Score will work in your favour.
Additional Reading: Ways To Improve Your Credit Score
Now that you are aware of the criteria that determines your Personal Loan eligibility, you can go ahead and make an informed decision. If it all checks out, take a look at our Personal Loan offers by clicking the button below.