Are you looking for a home extension? Or Want to travel the world with your loved ones? or Need to meet an emergency? Require money to start a business? Or looking forward to paying off your existing debts? No matter what the reason is, a Personal Loan is a feasible solution that can fulfill the immediate cash crunch that too with ease and ultimate convenience. In recent times, personal loans are the most convenient financing tool, the quick approval and disbursal make it unique from other options. Also, loans can be used for any purpose without any explanation. But before you apply for a loan, it’s essential to check personal loan eligibility and the documents required. This will help you get your loan approved instantly if you meet all the required criteria.
If you are a responsible borrower, then be with this write-up till the end and gain a detailed knowledge of personal loan eligibility criteria and much more.
First of all, a personal loan is an unsecured loan that can be used to meet a variety of needs which means there is no need to provide collateral or security. You can avail of a loan from any bank or non-banking financial institution. At Buddy Loan, you can obtain a loan up to Rs. 15 Lakh for tenures ranging from 12 months to 5 years starting at an interest rate of 11.99% p.a.
If you are someone who is looking for a personal loan, you must start learning about the money you can borrow and interest to make the overall loan journey experience hassle-free and seamless. For this, you can use a personal loan eligibility calculator that soothes your borrowing procedure. It is a tool that helps you determine whether you are eligible for a personal loan or not. Depending on your monthly income, current EMIs, employment type, working experience, and creditworthiness – It calculates the maximum loan amount you are eligible for, interest rate, and repayment tenure.
Check Your Personal Loan Eligibility
Although availing of a personal loan is easy, it is essential to check your eligibility before applying for one. And if you meet all the criteria, you can enjoy the benefits of a personal loan to the fullest.
Here are a few reasons why need to check your personal loan eligibility before applying for a personal loan:
Quick Processing and Fast Disbursal
The application for a personal loan can be submitted online with a single click and get sanctioned within hours. Most lenders will process your loan within a few hours and your loan amount will be disbursed instantly after verification. This helps you to take care of any financial emergency.
No Restriction on End-Use
This is one of the best advantages of getting personal loans. Unlike other loans where the purpose or usage is predetermined, personal loans give you the freedom to utilize them for any purpose. This allows borrowers to use personal loans for any need, be it a dream wedding, a long-awaited vacation, an upskilling course, or a recliner lounge set for the living room.
Very Less Documentation
Personal loans are approved based on your credit score and income. Therefore, lenders ask only for minimum documentation for verification. Furthermore, if you are already a customer of the bank, you can quickly get a personal loan with no documentation.
Repayment Tenure
Personal loans can either be short-term or long-term. You can get a flexible loan repayment tenure starting from 12 months up to 60 months. This helps you in sufficiently planning your monthly budget and expenses.
Nil Collateral
Since personal loans are unsecured, you need not provide any collateral or guarantee when availing.
Transparent Loan Process
The loan application process for a personal loan is highly transparent. The processing fees and other charges are mentioned beforehand for you to decide. Moreover, many lenders also provide online access to your personal loan account so that you can keep track of your loan status anytime anywhere.
Also Read: Personal Loan Eligibility Checklist-Detailed List for Salaried & Self-Employed
Check Personal Loan Eligibility
Now, that you are aware of the benefits you receive while applying for a personal loan and also why you might need one, let’s dive into personal loan eligibility checking. You can use a Personal Loan Eligibility Calculator to check whether you are eligible to apply for a loan. Many lenders have this eligibility calculator on their official website to make it convenient for borrowers.
Here is How You Can Check The Personal Loan Eligibility For Salaried Person:
- Your Name
- Monthly Net Income
- Total years of work experience
- Your age
- Your existing EMIs
- Required repayment tenure
Based on the details you enter, the calculator will evaluate your eligible personal loan amount. This tool will also help you to calculate personal loan eligibility to determine your eligibility beforehand so that you will have a clear picture of your expenses and you can set a budget.
Personal Loan Eligibility Check
The majority of the lenders check the following parameters to gauge if you can repay the loan. Here are four basic eligibility requirements that you need to meet to avail of a personal loan –
- You need to be an Indian citizen.
- Your age must fall in the range of 21-65 years. Even few lenders offer loans at the age of 23 years.
- You must have a total work experience of 1 year while some lenders expect more work experience.
- Your credit score should be more than 750 to avail of a loan. Not having a good credit score can reject your loan application. In this case, you can add a co-applicant to increase the chances of loan approval.
With minimum and easy-to-meet eligibility criteria, you can apply for a personal loan in just a few clicks through Buddy Loan.
Documents Required for Personal Loan
Submit the required documents for verification and instant approval of your personal loan. Here are the basic documents that the majority of the lenders want you to submit:
- PAN Card/Voter Id/Aadhar Card for identity proof
- Address Proof
- Last 3 months’ salary slip
- Last 6 months’ bank statement
Once you submit the online application along with the documents, it will go for verification. After the approval process, the loan amount will go straight to your account within 48 working hours.
Personal Loan Eligibility Criteria From Top Banks in India
State Bank of India (SBI) Personal Loans Eligibility
| Interest rate | Starting from 10.90% per annum |
| Loan Amount | Up to Rs. 20 Lakhs |
| Income Eligibility | Rs. 15,000 per month |
| Age Eligibility | Minimum of 21 years, and up to 58 years at the time of loan maturity |
| Repayment Tenure | Up to 72 months |
ICICI Bank Personal Loans Eligibility
| Loan Amount | Rs. 50,000 – Rs. 25 Lakhs |
| Interest Rate | 11.50% to 17.25% p.a. |
| Repayment Tenure | 12 months – 60 months |
| Loan Processing Charges | From Rs. 999/- Up to 2.0% of the loan amount and applicable Service Tax |
| Prepayment Charges | 5% on principal outstanding + GST |
HDFC Bank Personal Loans Eligibility
| Interest rate | Starting from 10.50% to 21.00% p.a |
| Loan Amount | Up to Rs. 40 Lakhs |
| Income Eligibility | Rs. 25,000 per month for HDFC Bank Salary Account Holders
Rs. 50,000 per month for non-HDFC Bank Salary Account holders |
| Age Eligibility | Minimum of 21 years and up to 60 years |
| Repayment Tenure | Up to 60 months |
| Credit Score | Minimum 650 |
| Employment Type |
|
| Employment Continuity | At least 2 years, minimum 1 year with the current employer |
Axis Bank Personal Loans Eligibility
| Interest rate | Starting from 12% – 21% p.a |
| Loan Amount | Up to Rs. 15 Lakhs |
| Income Eligibility | Rs. 15,000 per month |
| Age Eligibility | Minimum of 21 years and up to 60 years |
| Repayment Tenure | Up to 60 months |
Note: The interest rates of banks are subject to change, so do visit their official website to get their updated rates.
Personal Loan Eligibility From Top NBFCs and Other Banks
| Lenders | Eligible Loan Amount | Minimum Eligible Income | Eligible Age | |
| PaySense | Up to ₹5 lakh | ₹18,000 per month | 21 to 60 years | Apply Now |
| Bajaj Finserv | Up to Rs. 25 Lakh | Rs. 25,000 per month | 23 to 55 Years | Apply Now |
| Aditya Birla Capital | Up to ₹15 lakh | ₹15,000 per month | 23 to 60 years | Apply Now |
| Fullerton India | Up to Rs. 40 Lakh | Rs. 20,000 per month | 21 – 60 Years | Apply Now |
| Tata Capital | Rs. 75,000 to Rs. 25 Lakh | Rs. 15,000 per month | 22 to 58 Years | Apply Now |
| Money View | Rs. 10,000 to Rs. 5 Lakh | Rs. 13,500 per month | Above 18 Years | Apply Now |
| IIFL | Up to Rs. 25 Lakh | Rs. 35,000 per month | 25 to 60 Years | Apply Now |
| Bank of Maharashtra | Up to Rs. 10 Lakhs | Rs. 3 lakh per annum | 21 to 60 Years | Apply Now |
| Canara Bank | Up to Rs. 5 Lakh | On a case by case basis | Above 18 Years | Apply Now |
| IDFC First Bank | Rs 1 Lakh to Rs 25 Lakh | Rs. 20,000 per month | 23 to 58 Years | Apply Now |
| IDBI Bank | Rs. 50,000 – Rs. 10 Lakhs | Rs. 25,000 per month | 21 to 60 Years | Apply Now |
| Indiabulls | Rs. 1,000 to Rs. 15 Lakh | Rs. 25,000 per month | Above 18 Years | Apply Now |
| Indian Overseas Bank | Up to Rs. 5 Lakh | Over Rs. 5,000 per month | Up to 60 Years | Apply Now |
| IndusInd Bank | Rs. 50,000 to Rs. 15 Lakh | Rs. 25,000 per month (net) | 21 to 60 Years | Apply Now |
| Kotak Mahindra Bank | Rs. 50,000 to Rs. 15 Lakh | Rs. 20,000 per month (net) | 21 to 58 Years | Apply Now |
| Punjab National Bank | Rs. 50,000 to Rs. 10 Lakh | Rs. 10,000 per month | Above 18 Years | Apply Now |
| RBL Bank | Rs.1 Lakh to Rs. 20 Lakh | Rs. 20,000 per month | 25 to 60 Years | Apply Now |
| Standard Chartered Bank | Rs.1 Lakh to Rs. 30 Lakh | Over Rs. 22,000 per month | 21 to 60 Years | Apply Now |
| Union Bank of India | Up to 10 Lakh | Rs. 15,000 per month | Above 18 Years | Apply Now |
| YES Bank | Rs 1 Lakh to Rs 40 Lakh | On a case by case basis | 22 to 58 Years | Apply Now |
Note: The interest rates of banks are subject to change, so do visit their official website to get their updated rates.
From the above table, if you meet the required eligibility criteria, you can apply for a personal loan based on your needs.
Lenders Evaluate the Personal Loan Amount You Are Eligible for
Lenders usually determine your eligible personal loan amount by your ability to repay the loan. Here are two methods that lenders use to evaluate the maximum amount of personal loan that you are eligible for:
Fixed Income to Obligation Ratio (FOIR) Method:
In this approach, the lenders will consider your cumulative monthly payments required to repay current debt. If your FOUR reaches 50% of your take-home pay, the personal loan application will not be approved, or the loan amount sanctioned may be less than what you require.
Net Monthly Income Method:
Here lenders use a multiplier based on your net monthly income (NMI) to evaluate the maximum loan amount. The loan amount that is available can be up to 30 times your Net Monthly Income (NMI). If the loan amount requested reaches this limit, your loan application will not be eligible for a personal loan.
Factors Affecting Personal Loan Eligibility
Credit score: Borrowers with a credit score of 750 and above are considered to be more financially responsible and hence, are less likely to default. Hence, banks and NBFCs prefer to offer personal loans to such applicants. Many lenders also offer comparatively lower interest rates for applicants having high credit scores. However, if you have low credit scores, lenders will charge you high-interest rates. Therefore, you must check your credit scores at regular intervals and take steps to maintain above 750.
If you are new to the credit market and want to increase your credit score, you can do so by availing a personal loan using Buddy Loan. To know how you can build a credit score using a personal loan, click here.
Note that the eligible credit score required for a personal loan may differ from one lender to another. Some lenders offer personal loans to those who are new to credit (applicants having no credit score).
Employment Type and Employer Reputation
Lenders usually prefer to offer personal loans for salaried individuals as they have a stable income compared to self-employed. Moreover, if you are working in a government or reputed corporates/MNCs. you are more likely to get a loan at lower interest rates. For many lenders, salaried individuals must have at least 1 year of work experience to be eligible for a personal loan. In the case of self-employed individuals, their business should be in existence for at least 2 years.
Age
The majority of banks and NBFCs offer personal loans to individuals in the age group of 18 years to 65 years.
Minimum Income
Having a high income indicates that you have a higher capacity to repay your loan on time, which further implies that you are a low-risk borrower. For salaried individuals, the minimum salary required is Rs. 15,000 or above. In the case of self-employed individuals, your gross annual income must be above Rs. 2 lakh.
Repayment Capacity
Banks and NBFCs usually approve your personal loans when the EMI/NMI ratio is not more than 50% to 55%, which may vary across lenders. This means that your total credit card, existing loan EMI obligations, and proposed loan, must not exceed 50% of your total income.
Now that you know the factors that affect your personal loan eligibility, let us now have a look at how you can improve the parameters of loan eligibility to increase the chances of getting a loan approved.
Also Read: How to Get a Personal Loan: A Complete Guide on Eligibility and Documents
Improve Personal Loan Eligibility Parameters
Meeting all the required eligibility criteria is essential to have a smooth process when availing of a personal loan. And if you fail to meet any criteria, your loan application may get rejected which will further affect your credibility. Here are a few tips to enhance your eligibility for a personal loan:
Credit Score
Your credit score plays a vital role in approving your loan application. A healthy score ensures quick approval while a poor score can lead your application toward rejection. The score is generated based on your previous loan journey, transaction details, and other credit factors. It is a 3-digit number and a score above 750 assures speedy approval. This score enables the lender to decide the loan amount and interest rate. So, make sure you maintain this score throughout the year by paying your bills on time. Remember, a good credit score determines your creditworthiness. Also, don’t forget to check your credit report before applying. A single error can reject your application. If you find any information that is wrong as knowledge, then fix it quickly.
Also Read 7 Myths About Credit Score Report That Need To Be Cleared
Make Sure You Have a Proper source of Income
Before applying for a personal loan, make sure you have a steady job and an income to avail of the loan with ease. Higher the income, the greater the borrowing capacity. Having a good income lets you negotiate the interest rate and repayment tenure. This is an important factor to consider, so be careful with your job and work experience.
Do Not Go For Multiple Loans/Lenders
You should apply for only one personal loan at a time. When you apply to too many lenders and apply, each inquiry is mentioned in the credit report and it affects your credit score negatively. Also, this will express your financial instability and lenders may reject your loan application. Before you approach a lender, do your research and compare loan offers, interest, tenure, etc. You must select a lender who will cater to all your financial requirements in a convenient way.
Keep All Your Documents Ready
Make sure all your documents are ready and in place. Before final submission, cross-check your application form, and credit score, and make sure all the criteria are matching with lenders’ requirements. You can add a co-applicant to enhance the approval chance.
A personal loan gives you financial freedom and keeps away all the stresses. Just follow the above tips and work on improving your personal loan eligibility factors to increase the chances of loan approval. The eligibility may vary depending on the personal loan types, so check with the lenders once before proceeding!
Get a Co-Applicant
You can improve your personal loan eligibility by getting a co-applicant. They can be your family member, such as spouses, parents, children, etc. And when you apply for a personal loan with a co-applicant, the lenders will check the credit scores and repayment capacity of both applicants. Hence, get a co-applicant who has a high credit score to increase your chances of getting your loan approved.
Avoid Frequent Job Changes
Lenders will also consider your employment history and stability when evaluating your personal loan eligibility. They may hesitate to offer you personal loans if you change your jobs frequently. The reason is that it reflects career instability, which further increases the credit risk for the lenders. Therefore, try to avoid job hopping, especially when you are planning to avail of a personal loan in the near future.
Avoid Multiple Loan Applications
When you apply for a personal loan, lenders check your credit report to evaluate your creditworthiness. Such requests are recorded as hard inquiries in your credit report reducing your credit score. Moreover, making multiple hard inquiries within a short span of time will show you as a ‘credit-hungry’ borrower. As a result, lenders will reject your loan. Therefore, instead of submitting loan applications to multiple lenders directly, visit online loan aggregators like Buddy Loan to get personal loans from multiple loan options. Moreover, inquiries through online financial marketplaces are considered soft inquiries and will not affect your credit score.
Documentation Needed For Personal Loan
The following are the most common documents required for personal loan online approval for salaried and self-employed individuals:
List of Documents Required for Salaried Employees
| Proof of photo identity (Any one) | Passport, Voter’s ID, PAN Card, Driving License, Aadhar Card |
| Proof of Residence (Any one) | Passport, Aadhar Card, Utility Bill, Ration Card, Driving License |
| Proof of Ownership of Residence (Any one) | Property documents, Electricity bill, Maintenance bill |
| Proof of Income |
|
| Job Continuity (Any one) |
|
| Proof of Investment (if any) | Fixed assets, shares, fixed deposit, etc. |
| Photograph | One passport size Color photograph |
List of Documents Required for Self-Employed Individuals
| Proof of photo identity (Any one) | Passport, Voter’s ID, PAN Card, Driving License |
| Proof of Residence (Any one) | Passport, Aadhaar Card, Utility Bill, Ration Card |
| Proof of Residence Ownership (Any one) | Property documents, Electricity bill, Maintenance bill |
| Proof of Office Address (Any one) | Maintenance bill, Property documents, Utility bill |
| Proof of Office Ownership (Any one) | Maintenance bill, Property documents, Electricity bill |
| Proof of Business Existence (Any one) | Tax registration copy, Company registration license, Shop establishment proof |
| Proof of Income | Income tax returns for the previous two years inclusive of Computation of Income, audit report, balance sheet, profit, and loss account, etc. |
| Bank statement | Savings and current bank statement for the past one year |
| Proof of Investment (if any) | Investments such as fixed assets, fixed deposits, and shares |
| Photograph | One passport size color photograph |
List of Documents Required for NRI Applicants
| Proof of Identity | Copy of your passport, Copy of your visa |
| Proof of Employment | Appointment letter, Job contract, Identity/Labour card (if applicable), Official email ID or the HR’s email ID |
| Proof of Income | Bank statements of the last 6 months, Salary slips or salary certificate |
| Photographs | Recent passport-size photographs |
List of Documents Required for Pensioners
| Proof of Identity/Age (Any one) | Ration card, PAN card, Voter ID card, Passport, Driving license, School leaving certificate, Birth certificate |
| Proof of Address (Any one) | Aadhaar card, Passport, Ration card, Utility bills, Driving license. |
| Proof of Income (Any one) | Bank passbook, Bank statements of the last 6 months, Form 16, Income tax returns, Copy of pension payment order |
| Photographs | Recent passport-size photographs |
Tips To Apply For a Personal Loan Successfully
Here are a few essential things you have to keep in mind when planning to apply for a personal loan:
- Find the requirement for your loan
- Do complete research to get the best offer on interest rates.
- Check your credit history and your credit score and maintain above 750.
- Make sure all your documents are error-free.
- Choose a loan repayment tenure after you evaluate your repayment ability.
- Choose the loan amount only for what you need.
- Check your EMIs before applying for a loan.
- Be aware of the processing fee before applying for the loan.
- Decide if you want a fixed or variable interest rate based on your preference.
Also Read: 10 Best Tips for Successful Personal Loans
Final Take Away
Hope the article gave you clarity on the importance of checking your personal loan eligibility. Following the above-mentioned steps will help you leverage your chances to get instant approval on your personal loan.
Download Personal Loan App
Get a loan instantly! Best Personal Loan App for your needs!!
Looking for an instant loan? Buddy Loan helps you get an instant loan from the best verified lenders. Download the Buddy Loan App from the Play Store or App Store and apply for a loan now!
Apply for Loan on BUDDYLOAN App
Interest rates starts @11.99% p.a. onwards
Having any queries? Do reach us at info@buddyloan.com
Frequently Asked Questions
Q. What is Personal Loan Eligibility?
A. If you are someone who is looking for a personal loan, you must start learning about the money you can borrow and interest to make the overall loan journey experience hassle-free and seamless. Hence, it is essential to check your eligibility before applying for one. And if you meet all the criteria, you can enjoy the benefits of a personal loan to the fullest.
Q. How to check Personal Loan Eligibility?
A. You can check your eligibility using personal loan eligibility calculators. To check your eligibility, first enter the details such as Your Name, Monthly Net Income, Total years of work experience, age, Your existing EMIs, and Required repayment tenure. Based on the details you enter, the calculator will evaluate your eligible personal loan amount.
Q. How is Personal loan Eligibility Calculated?
A. Enter the required details such as your name, income, and work experience. Based on the details you enter, the calculator will evaluate your eligible personal loan amount. This tool will also help you to calculate personal loan eligibility to determine your eligibility beforehand so that you will have a clear picture of your expenses and you can set a budget.
