Personal Loan Eligibility

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      Personal Loan Eligibility

      Personal Loan Eligibility

      A personal loan is the most selling product by banks nowadays. Besides that, there is some other non-banking financial organization too that provides you with a personal loan. You can use this amount of loan for your personal purposes. One more thing to note is that there is no need for collateral in a personal loan. There is no need to pledge anything to the bank. This loan is totally based on your source of income and your credit history.

      Personal Loan Eligibility for Top Banks in 2021

      Bank

      Age Limit

      Minimum Work Experience

      Minimum Income (Per Month)

      SBI

      Up to 76 years

      NA**

      Rs.15,000

      HDFC

      21 to 60 years

      2 years

      Rs. 20,000

      ICICI

      23 to 58 years

      2 to 5 years

      Rs.17,500

      Axis Bank

      21 to 60 years

      NA**

      Rs.15,000

      Kotak Mahindra

      22 to 55 years

      1 year

      Rs.25,000

      Tata Capital

      21 to 58 years

      1 year

      Rs.15,000

      IndusInd

      21 to 60 years

      2 to 5 years

      Rs.25,000

      Ujjivan Small Finance

      22 to 58 years

      NA**

      Above the minimum wage limit

      India Infoline Finance Limited

      25 to 60 years

      6 months to 2 years

      Rs.35,000

      HDBFS

      21 to 65 years

      1 year to 3 years

      Rs.15,000 for salaried

      Rs.1 lakh p.a. for self-employed

      Indian Overseas Bank

      Up to 58 years

      NA*

      Rs.5,000

      IDFC First Bank

      23 to 68 years

      3 years

      NA*

      Federal Bank

      21 – 55 Years

      3 years

      Rs.25,000

      Punjab National Bank

      21 – 58 years

      2 years for doctors

      Rs.15,000

      Andhra Bank

      21 – 55 years

      NA**

      NA*

      Canara Bank

      NA**

      NA**

      Salaried: Rs.6,000 & above

      Self-employed – Rs. 1.5 lakh

      IDBI Bank

      Up to 75 years for Pensioners

      NA**

      Rs.1.5 lakh p.a.

      Fullerton India

      21 to 55 years

      1 to 2 years

      Rs.15,000

      RBL Bank

      25 to 60 years

      1 to 3 years

      Rs.25,000

      Bank of Baroda

      21 to 60 years

      1 year to 2 years

      60% of gross monthly income

      Deutsche Bank

      25 to 60 years

      NA**

      Rs.25,000

      Karnataka Bank

      NA**

      3 years

      NA*

      United Bank of India

      up to 75 Years

      2 years

      NA*

      UCO Bank

      21 to 65 years

      1 year to 5 years

      Rs.20,000

      Factors that affect Personal Loan Eligibility

      • Geographic location: The geographic area in which the borrower resides plays a vital role in determining whether or not a person will qualify for a personal loan.
      • Income: The Personal Loan Eligibility of a borrower will depend on their income. The higher one’s income, the higher the loan amount one will be eligible for.
      • Existing credit: In case the borrower has another ongoing personal loan, the chances of getting a new personal loan will be lower if one has other credit to repay.
      • Company: The company at which one works also determines if they get a personal loan. Working for a famous company which has a good brand name makes a person with a stable job.
      • Credit history: Credit score and credit history have the biggest impact on a borrower’s personal loan eligibility. The rate of interest, tenure, and the loan amount one borrows will also depend on this factor.
      • Age: If the age of the borrower is in the late ’50s, then the tenure for which one gets a personal loan will be lower. Also, one must make sure that sufficient working years are left to repay the loan amount.
      • Work experience: A person who has more work experience their creditworthiness increases in the eyes of the bank/ financial institution because one is then considered financially stable.

      Features of Personal Loan

      A personal loan comes under unsecured loans that applicants can use for various reasons, including vacation or travel, higher education, wedding, medical treatment, credit card payment, and so on. Some fundamental characteristics are as follows:

      • No Security Needed: Because a personal loan is unsecured, you are not required to provide any security in the form of shares, cash, or any other asset.
      • Loan Term: Customers can obtain a personal loan for a period ranging from one month to 72 months.
      • Personal Loan Interest Rates: They begin at 10.25 per cent. Besides interest rates, borrowers must also pay processing fees, prepayment and foreclosure penalties, and other costs when taking out a personal loan.
      • Loan Amount: Depending on your income, Personal Loan Eligibility and credit score, you may be eligible for a personal loan ranging from 5,000 to 75 Lakh.
      • Special Plans: Banks also provide customised personal loan interest rates and schemes for pensioners, salaried borrowers working in government, defence, private, or multinational corporations, and self-employed professionals such as doctors, CAs, CSs, and architects.

      Personal Loan Eligibility Criteria

      Every bank has its own personal loan eligibility criteria to give a personal loan to the applicant. But in general, there are some Personal Loan Eligibility criteria in every bank and non-banking financial company. Let us discuss Personal Loan Eligibility in detail.

      1. Age
        Age is the basic criterion for Personal Loan Eligibility. None of the banking or non-banking organization companies gives a loan to any minor. You will only get a personal loan only if your age is more than 21 years. After that, the bank wants to be assured that the applicant is capable of returning the loan or not. So it is obvious that if your age is less, you would not have enough money to return the loan.
      2. Income
        To get a personal loan, you need to have some rigid source of income. You need to be salaried or self-employed with proof. Obviously, if you have some source of income, only then you would be able to return the personal loan. For this reason, the bank needs some income proof. If you are salaried, you need to have a salary slip for the last three months as proof of income. On the other hand, if you are self-employed, you need to have ITR (Income Tax Report) for three years. But it should be at least Rs. 2.5 Lakhs per year. Furthermore, the bank needs a bank statement for the last six months.
      3. CIBIL Score
        CIBIL score is also one important factor that plays an important role in personal loan eligibility. Your Personal Loan Eligibility criteria are fulfilled only if your CIBIL score is good. If your CIBIL score is less than 620 will have a problem getting a personal loan. The thing is that your CIBIL score tells a lot of things about your credit history. If your banking is good, then your credit score would be good. After checking the credit score, the purpose of the bank is to check how punctual you are towards your banking.

      These are the basic personal loan eligibility criteria that bank checks while giving you a personal loan.

      Eligibility of Personal Loan in June 2021

      Personal Loan Eligibility

      The COVID-19 pandemic has adversely affected all the sectors, including the loan disbursal process. The lockdown has been imposed and has hence made it difficult for banks to carry out customer visits. Visits are a part of the bank’s KYC process for the loans, including personal loans. But, Lenders like HDFC Bank are providing personal loans to individuals who maintain the basic Personal Loan Eligibility criteria like a salary or their savings account with them. For now, the relationship the borrower has with the lender can also influence the Personal Loan Eligibility criteria.

      Personal Loan Eligibility Criteria for Salaried Borrowers

      Salaried borrowers will include salaried professionals like lawyers, doctors and chartered accountants who are eligible to apply for the personal loan. The exact eligibility criteria for a personal loan may be different from one bank to another. Following are some of the eligibility criteria that are applicable to personal loans for salaried individuals:

      Eligible Age Group

      21 years to 60 years

      Minimum Net Monthly Income

      Rs. 15,000

      Minimum Total Work Experience

      1 year

      Minimum Work Exp. with the current organisation

      6 months

      Minimum Prior Relationship with a lender

      6 months

      Personal Loan Eligibility Criteria for Self-Employed

      Most banks/financial institutions allow self-employed applicants that include business owners and self-employed professionals such as doctors, architects, etc. can get a personal loan after meeting the applicable eligibility criteria. Following are the personal loan eligibility criteria for self-employed applicants:

      Eligible Age Group

      25 years to 65 years

      Minimum Annual Turnover

      Rs. 15 lakh

      Minimum Profit After Tax (Previous FY)

      Rs. 2 lakh

      Minimum Business Experience

      3 years in the current business

      Minimum Prior Relationship with a lender

      1 year

      Documents required to Check Eligibility for Personal LoanPersonal Loan Eligibility

      The documents that are required and the Personal Loan Eligibility criteria are two different aspects of a loan, and to get a personal loan are different for a salaried professional and for a self-employed individual. Below is the list of documents that are required to apply for a personal loan:

      Salaried applicants:

      • Proof of Residence: Rent Agreement  or Utility Bill (should not be more than 3 months old) / Passport 
      • Proof of Identity: Passport / Driving License / Voters ID (any)
      • PAN Card
      • Recent 3 months Bank Statement
      • Salary slips of the borrower for the last 3 months
      • 2 passport size photographs

      Self-employed applicants:

      • PAN Card
      • KYC Documents: Aadhaar Card or equivalent 
      • Proof of Residence: Leave and License Agreement / Utility Bill (should not be more than 3 months old) / Passport.
      • Income proof (audited financials for recent two years)
      • Last 6 months Bank statement
      • Office address proof
      • Proof of residence or office ownership
      • Proof of continuity of business

      Parameters required for getting Higher Personal Loan Eligibility from the Top Banks in India

      Bank Name

      Loan Amount

      The minimum income per month

      Repayment Period

      Age

      Total years in job/profession

      Years in current residence

      HDFC Bank

      Min. 50k, Max. As per Eligibility

      Be earning at least Rs. 12,000/- per month net income (Rs. 15,000/- in Mumbai, Delhi, Bangalore, Chennai, Calcutta, Ahmedabad, Cochin)

      1 Year- 5 Years

      21-60 years

      2 years

      6 months

      SBI

      Up to Rs. 10 Lacs

      Rs.24,000/- in metro and urban centres Rs.10,000/- in rural/semi-urban centres

      1 year – 4 Years

      21-60 years

      2 years

      1 Year

      ICICI Bank

      Up to Rs.40 lacs

      Salaried individuals with minimum monthly income Rs.17,500 (Rs.25,000 for applicants residing in Mumbai & Delhi; Rs.20,000 for applicants residing in Chennai, Hyderabad, Bangalore, Pune & Kolkata)

      1 Year- 5 Years

      23-60 years

      2 Years (In current business for at least 5 years and minimum 3 years for doctors)

      1 Year

      Bajaj Finserv

      Up to Rs. 25 lacs

      Rs. 40,000 or more for Delhi/NCR, Mumbai, Hyderabad, Bangalore, Chennai, Thane and Rs. 35,000 for other cities.

      1 Year- 5 Years

      21-60 years

      2 Years

      1 Year

      Fullerton India

      Up to Rs. 30 Lakhs

      Minimum Rs.12500/- in hand, Mostly depends on the City or Location of borrowers.

      1 year – 4 Years

      21-60 years

      2 Years

      1 Year

      Kotak

      Up to Rs. 15 Lakhs

      Net monthly salary of Rs. 25,000/-

      1 year – 5 Years

      21-58 years

      2 Years

      1 Year

      Indusind Bank

      Up to Rs. 20 Lakhs

      Net monthly salary of Rs. 25,000/-

      1 year – 5 Years

      23 – 60 years

      2 Years

      6 Months

      Axis Bank

      Up to Rs. 15 Lakhs

      Net monthly salary of Rs. 15,000/-

      1 year – 5 Years

      21 – 60 years

       

       

      Citibank

      Up to Rs. 30 Lakhs

       

      1 year – 5 Years

       

       

       

      Standard Chartered

      Up to Rs. 30 Lakhs

      Net monthly salary of Rs.50,000 (in metro cities) – Rs.30,000 (in Chandigarh & Jaipur)

      1 year – 5 Years

      ETB Customer- 22 to 60 years NTB Customer- 25 to 60 years

      ETB Customer- No minimum 0 years NTB Customer- 2 years

      NIL

      Personal Loan Snapshot

      Minimum and Maximum Age

      • 21 Years – 65 Years
      • Some banks require a minimum age of 23 years

      Loan Amount

      • Upto Rs. 50 Lakhs 
      • Eligibility is based on the net monthly income. 
      • The amount is generally fixed at 10-27 times the net monthly income. 
      • Most banks offer only a maximum loan amount of up to Rs. 25 Lakhs

      Net Monthly Income

      • Min. of Rs. 10,000 (For Semi-Urban & Rural areas) and Rs. 15,000 (For Metro city areas)
      • For salaried individuals, income proof is necessary to establish stable and timely income.

      Employment Type

      • Both salaried and self-employed individuals are eligible
      • Salaried individuals of well-known organizations have an advantage because of their job security and income stability
      • Self-employed professionals like doctors and chartered accounts can get a higher loan amount due to their higher-income inflow

      Existing debts and liabilities

      • Existing debts and liabilities also affect the loan amount and interest rate one can get.
      • Existing EMIs(if any) will decrease the income to debt ratio, which in turn results in a  negative effect on the eligibility for your personal loan.

      Minimum Work Experience

      • Salaried individuals should have been employed for at least 2 years in past, out of which the last 1 year should be with the present organization
      • Self-employed individuals, the firm should have been working for at least 3 years out of which the last 2 consecutive years should have been profit-making years

      Credit Score for Personal Loan

      • A minimum of 650 & above
      • 750+ is considered optimal

      My Credit Score is less than 750. Will I be able to obtain a Personal Loan?

      There is no guarantee that any given credit score will be approved for a personal loan. However, if you have a score above 750, your chances of acceptance increase significantly. A score of slightly less than 750 does not necessarily imply that the lender will deny your request. The following are some possible outcomes of your loan application:

      If your credit score ranges between 300 and 599, you will not fulfil Personal Loan Eligibility. A low credit score indicates to lenders in this area that you do not have a track record of good credit behaviour. The vast majority of lenders will immediately reject your request.

      Special Note: An individual must examine the whole EMI amount payable to the lender with the Personal loan EMI calculator.

      Amount of Personal Loan Can I Get on My Salary?

      Personal loan eligibility mostly depends on the monthly income of the borrower. While calculating the eligibility, banks generally follow a thumb rule. They try to make sure that any borrower has sufficient cash in hand to repay their loan through equated monthly instalments (EMIs). Banks also consider monthly expenses, savings and financial liabilities of the borrower before giving them a personal loan.

      How can one Improve their Eligibility for a Personal Loan?

      There are multiple factors that one needs to take into consideration while determining their Personal Loan Eligibility. Below are some ways to improve the chances of getting approved for a loan. 

      • Pay full credit card dues and outstanding EMIs on time: One must ensure that all their credit card dues and loan EMIs that are to be paid are paid within the due date and are paid in full. Making regular payments within a specified time can help one to improve their credit score, including the CIBIL score. This will also improve the chances of getting approved for a new loan or credit card.
      • Reduce existing debt: By reducing the outstanding debt, one can decrease the burden of loan payment. This will help the borrower to free a larger portion of their income for paying for new debt and will improve their chances of getting approved for a new loan or credit card.
      • Apply with a co-borrower: One can improve their Personal Loan Eligibility by getting a loan with a co-borrower. This can include spouse, parents, etc., to co-sign the loan application form. Currently, all banks and NBFCs are not allowed co-borrowers in case of personal loans. But, having a co-borrower can definitely improve one’s Personal Loan Eligibility.

      What is a Personal Loan Eligibility Calculator?

      A personal loan eligibility calculator is a tool that can help in determining whether one is applicable for a personal loan or not. The Personal Loan Eligibility can be calculated based upon their monthly income, current EMIs payment, the type of firm one is currently working for, and years of working experience one has. It helps in calculating the maximum loan amount that one is eligible for based upon the maximum EMI one can afford to pay. The eligibility calculator is user friendly and gives a glimpse of offers from various personal loan banks that one is eligible for.

      What are the Benefits of Opting for a Personal Loan?

      Fast processing and disbursal – Personal Loans can be processed and sanctioned within a few hours. Nowadays, the loan application can be easily submitted with a single click on the respective bank’s website. Then banks/ financial institutions process the loan within 24 hours, and the amount is then sanctioned into the borrower’s account instantly. 

      No end-use restrictions –  This is one of the best advantages of getting a personal loan. Unlike other loans where the end-users of the loan are predetermined, personal loans give the borrower the freedom to utilize the loan amount in any legal way. This also allows the borrowers to consume personal loans for any personal needs, including weddings, vacations or education.

      Less documentation – Personal loans are processed based on the borrower’s income. Therefore, banks/financial institutions indulge in a lot of documentation for processing the loan. If you already are an existing customer of the bank, then you can get a personal loan with nil documentation.

      No collateral – personal loans are unsecured loans, and hence one doesn’t have to submit any collateral or security to get the loan.

      Transparent loan process – Personal loan process is transparent. All fees and other charges are clearly mentioned. Many banks/financial institutions provide online account access to the personal loan account so that one can keep track of their loan account anytime and from anywhere.

      Personal Loan Customer Care

      In case of any queries regarding a Personal Loan Eligibility, including the application process, eligibility criteria, loan approval or loan sanctioning. All the information can be availed through Personal Loan Customer Care number – 9878981166.

      FAQs about Personal Loan Eligibility

       What purpose does a credit report serve in the approval of a personal loan?

      Because you do not provide any collateral for a personal loan to a bank/NBFC, the lender is in danger of losing money if you do not make your payments on time. Lenders may review your credit information report (CIR) or credit report to determine your credit history and monitor your loan repayment actions over time. This helps them understand your credit discipline and decide whether you are a high-risk or low-risk customer. A credit report that displays a clear record of timely repayments and overall responsible credit behaviour is essential for lenders when authorising a personal loan application.

       What is the minimum credit score required to be approved for a personal loan?

      Before deciding whether to continue with the processing of your application, lenders typically look for a minimum credit score of 750. Because personal loans do not require collateral, lenders examine your credit history to determine whether they can rely on you to meet your debt obligations. A credit score of 750 indicates that the client has a strong track record of making timely repayments over a long period.

       What are the benefits of a personal loan?

      Personal loan benefits are that you are reasonably easy (because you don’t need as much paperwork as your house or your car loan), you can spend your money without a limit; personal loans are not guaranteed. So, if you don’t have any assets to put up as collateral, such as a house, stocks, or gold, and are in desperate need of funds, this may be the most convenient option.