In the modern age, the wants and needs of people are
increasing tremendously. All of us wish to buy the latest products and keep up
with the trends. But following a trend can be rather expensive and may cost a
lot of money. However, banks and NBFCs offer personal loans, which enable you
to purchase almost anything. That said, lenders typically consider several
factors before approving your loan. They check your personal loan
eligibility based on several factors, which are as under.
You age during the loan application time
Lenders need to ensure that you can repay the loan and your
age helps them determine your eligibility for personal loan. It is rather
obvious, that older (retired) person, with limited income sources, may find it
challenging to repay the loan, thus increasing the lender’s liability. As such,
lenders prefer providing loans to younger people, with several years of
employment ahead of them. Generally, the minimum and maximum age for availing
and repaying loans is 21 years and 70 years respectively (at the time of final
EMI repayment).
Your net monthly income and additional income sources
Your income is another factor that helps lenders understand
if you can indeed repay the loan. Every lender sets certain basic minimum
monthly income criteria to determine if you are eligible for the loan. You can
show both your monthly income and your additional income sources (if any) to
increase your eligibility
for personal loan.
Your employment status
Your employment status is perhaps the most crucial factor
that lenders consider while determining whether or not to approve your personal
loan application. If you have been steadily employed, for more than two to
three years, your loan approval chances can increase to a great extent. Also,
the lender considers if you are salaried individuals or self-employed
professionals. The chances of the former’s loans getting approved are higher
than the latter.
The reputation of the organisation you are employed with
In the loan application form, the lender asks you to fill
the details of the company or organisation with which you are employed. Your
employers’ reputation plays a significant role in getting your loan approved.
If you are employed with a reputable company, your personal loan eligibility
can increase, and your loan may be sanctioned within minutes.
The way you handle your finances
Apart from the above mentioned personal factors, lenders
also check how you manage your finances. They check if you have existing loans
and whether they are repaid on time. They monitor your credit card bills and
your credit utilisation ratios. If these figures are up to the mark, (and if
your credit score is over 750), your loan may be approved quickly.
Before applying for a loan, you must check if
you are eligible. Remember to use a personal loan eligibility calculator found
on all lender websites. This simple tool, along with the EMI calculator, can
help you prepare for the loan before you even apply.