Personal loans can prove to be helpful in meeting many types of financial needs. These include sudden money requirement, no big shopping, home renovation and even vacation. With the arrival of loan apps and digital lending platforms, taking personal loans has become easier than ever. Now you can apply digitally for personal loans and if everything is right, then money is transferred to your account in a few hours.
However, banks and non-banking financial companies (NBFCs) check many things before applying personal loans. Eligibility criteria may vary for personal loans depending on the conditions and rules of the lenders.
What is a personal loan?
Other financial institutions including the bank offer personal loans for different needs of the people. Through this, the amount received can be used for any kind of work like medical expenses as well as vacations or home repair. These loans are usually unsecured and there is no need to pledge something for them.
How to get a personal loan?
In the era of digital banking, it has become very easy to take personal loans. Some banks also offer pre-upward personal loans to customers. While some financial institutions can take up to 2-4 hours to process your personal loan. It depends on your loan amount and many other factors. If you have the necessary documents and your credit score is good, then you can easily get a personal loan. During this time, many lenders give you the facility to apply for personal loans through the official app and bank website.
You can easily apply for personal loans up to ₹ 50 lakh through digital platforms like Moneycontrol. The platform offers attractive loan offers in collaboration with its lending partners. You can apply for a loan with 100% paperless process. Here the interest rate for loan starts at 10.5% per year.
Personal Loan Eligibility Criteria
Income and repayment capacity: First of all, lenders check the income of the person. This shows them how capable the application is to repay the loan. The income of applicants working on salary should be at least 15,000 to 25,000 rupees per month, while this figure can be higher for a person doing his own work.
Credit Score: Lenders pay more attention to credit scores of 750 or more. However, he also considers the score of 700 or above as good.
Age : While applying for personal loans, a person working on salary should be 18 to 60 years, while the age of a businessman himself should be between 21 and 65 years.
Business and Job Stability: Most of the lenders pay attention to the job experience of at least one year. While this criterion is at least three years for businessmen.
Employer profile: Applicant’s employer or business background can also affect loan eligibility. Lenders can give preference to people working in large organs.
Documents required for personal loan
- PAN or Aadhaar card -like ID proof
- Address proof like Aadhar card, electricity or water bill
- Income statement that shows your payment capacity
- Some lenders may also demand bank statement from the last 3 to 6 months.
How to improve personal loan eligibility
Credit Score: You can improve your credit score by paying credit card bills and loan EMIS on time.
Add coal-applicant: If the lender allows joint applications, adding co-applicants such as a husband or wife or parents can improve the eligibility. With co-applicant, the lender takes into account the credit scores and income of both.
Job Stability: Repeated job changes raises questions on stability. It causes doubts in the mind of the lender. Therefore, while applying for a loan, a stable job history can play an important role.
Do not apply for a loan quickly: With each loan application, your credit report has to face hard engine, which can cause a temporary decline in your credit score. So avoid applying for a loan quickly.
Manage existing loans responsibly: Lenders also check your date-to-incomplete ratio. You can manage your existing loans properly by doing timely repayments and avoiding borrowing without reason.
conclusion
It is important to understand your financial needs before applying for personal loans. This will help in choosing your correct option. During this time, using a personal loan calculator may give you the idea of monthly payment and total cost, which will help you to make a better plan of repayment. Before choosing an offer, check all the existing options well.
If you want to take an instant personal loan, you can explore a loan offer of up to 50 lakhs on Moneycontrol, where there is a minimal documentation and instant disorder.
Summary
Personal loans provide immediate money without any collateral. However, reviewing the eligibility criterion properly can help you shortlist the best personal loan options.
Top banks/ NBFCs
50 lakhs
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Disclaimer
This fraction/article is written by an external partner and does not reflect the work of the editorial team of Moneycontrol. This may include references to products and services offered by Moneycontrol.