It is not often easy to understand the eligibility criteria before applying for a personal loan. Various factors play a crucial role in measuring your creditworthiness. This is especially prominent among first-time loan applicants. Approaching a lending institution without knowing your personal loan eligibility might result in a rejection.
Let’s take a quick look at why you should know your eligibility criteria before you apply for a personal loan.
- It improves your chances of availing credit – A financial institution measures your creditworthiness after considering your eligibility criteria. Chances of your loan application getting approved will increase significantly if you meet all the requirements and standards set by the lender.
Not only will this save time during the application process, but it will also have a positive impact on your CIBIL rating. Multiple enquiries and denials can have affect your credit report negatively, which will reduce your borrowing capacity, i.e. the loan amount. If you know your eligibility criteria and apply accordingly, you will eliminate any chance of facing such issues.
- It helps in determining the loan amount and EMIs – Knowing your eligibility criteria will help you determine a suitable loan capital and EMIs. Your repayment capability depends on your income and fixed obligations. You might face difficulties if you take a loan with EMIs which strain your monthly budget.
If you know your personal loan eligibility, you can determine that yourself using an online personal loan EMI calculator. That will help you approach the lender with your preferred terms.
- You can negotiate attractive interest rates – You will be considered creditworthy if you have a high CIBIL score. Not only it will help you get favourable terms, but you can also negotiate your interest rates on personal loans during the time of application. A lower interest rate can help you pay your EMIs on time throughout the repayment tenor.
Meeting all the eligibility criteria not only helps you negotiate a lower interest rate, but it can also give you exciting offers and benefits.
Personal loan eligibility criteria
Most financial institutions offer simple eligibility criteria and minimum documentation for application. Although these requirements vary between lenders, there are some common criteria that you should meet to apply for such advances.
- Nationality – You have to be a resident citizen of India.
- Age – You should between 23 and 55 years of age.
- Mode of income – To avail a personal loan you have to work at an MNC, public or private sector company.
It is essential to ensure the eligibility and terms and conditions before applying for a loan. You can also use an online personal loan eligibility calculator to find out whether you qualify for the financing or not.
Other than that, you will also need to submit requisite documentation to apply for a loan. Let’s take a look at some of the most important documents you will have to provide.
- KYC documents.
- Proof of employment. For example, your employee ID card.
- Proof of income. For example, your salary slips for the previous 2 months, and bank account statement for the previous 3 months.
Once you meet the personal loan eligibility criteria, you can enjoy various features and benefits. In case of personal loans, the better an applicant is able to meet up to the eligibility pointers, the better loan terms they will get. Easier EMIs, flexible repayment tenors along with numerous other lucrative offers go hand-in-hand with well-met eligibility criteria.Tags: personal loan eligibility criteria