Are You Eligible For A Personal Loan?
A personal loan is an unsecured loan offered by banks to eligible individuals or businesses. As a customer, it is important to be aware of eligibility details for a personal loan as the same can simplify the application process. The eligibility criteria can vary from bank to bank for availing personal loans. A few guidelines must be kept in mind to ensure one avails the loan in a swift manner.
Some of the basic criteria are explained below for better understanding:
Age: Most of the banks tend to follow certain guidelines when it comes to approving requests for a personal loan by individuals. For instance, most of the banks’ requirement from individuals is that they be a minimum of 21 years of age and a maximum of 60 years of age.
Current Financial Situation: The previous and current financial situation of the individual is also taken into account by banks while approving a personal loan. Many banks ask for a minimum income of INR 25,000 per month. The financial condition of borrowers tends to represent their capacity to repay the loan amount to the bank. Hence, banks take maximum cognizance of this criterion while approving an unsecured loan.
Professional Stability: Many banks also look at employment stability as an eligibility criterion while approving personal loan applications. For instance, banks may require a salaried professional to have completed a minimum of 2 years of employment with a minimum of 1 year in their current organization. Individuals meeting this criterion are eligible to apply for a personal loan.
Credit History: As a personal loan is an unsecured loan, the credit history of the applicant is also taken into account by the banks. For instance, any kind of delays and defaults in repaying the EMIs of any other loan from other banks or financial institution is also taken into consideration before approving a loan application. Delays or defaults are some of the issues that can lower the overall eligibility for applying for personal loans by individuals. On the other hand, a good credit history works in favour of the borrower.
Outstanding Dues: Any other pending dues by the borrowers is also taken into consideration by banks. More dues are more likely to lower the eligibility factor for an individual. The amount is calculated as per the EMI which the applicant can pay, contributions towards other dues, and loans can either increase the EMI or reduce the personal loan amount considerably.
Organization: Banks also consider the kind of organization the applicant is working with since personal loans are unsecured loans – meaning the applicant does not have to arrange for a guarantee. The main idea behind this criteria is to look for stability and reputation of the employer in the market.
Despite limitations to the eligibility criteria for individuals, banks can also use their discretion to approve loan applications for those in need and capable of paying the loan back.
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