A personal loan is an unsecured and flexible loan that can be used for a variety of personal expenses. A personal loan doesn’t require any collateral and heavy documentation. There isn’t any limitation on the usage of the loan amount, and it is almost instant. Whether it’s for a wedding, a dream vacation, or any kind of emergency, you can quickly get a personal loan. Its easy availability is the reason why it is so popular these days. However, since a personal loan is unsecured, and there is no collateral involved, the risk for lenders is greater than any other loan. That is why lenders consider multiple factors while deciding personal loan eligibility criteria. Who can apply? What is the eligibility for applying for a personal loan? Let’s find out!
Personal Loan Criteria
There are some factors that lenders take into consideration while offering a personal loan, which you need to keep in mind. Consider the following factors if you’re thinking about applying for a personal loan. You can even use a personal loan eligibility checker online to analyze if you are eligible to get a personal loan in India or not.
- Age – An employed person (salaried) should be aged between 21 years to 58 years, and the age of a self-employed person applying for the loan should be minimum of 25 years and a maximum of 65 years.
- Job or Business Experience – For a salaried person applying for a loan, the minimum experience required is 1 year, and for a self-employed person, the minimum experience requirement is 3 years.
- Income or Profit – The minimum income of a salaried person should be INR 17500 monthly, and a professional self-employed person should have a profitable income of INR 2 lakh (after-tax). A non-professional self-employed person must have a profit-earning of INR 1 lakh (after tax)
Documents Required for a Personal Loan
The document requirements to apply for a personal loan are different for a salaried professional and a self-employed individual. The following are the documents that are required to avail the loan
A.) Salaried Professional
- KYC Documents – The four mandatory KYC documents to avail a personal loan are Pan Card, Aadhar Card, a utility bill, and Voter ID.
- Financial Documents – Last 3 month’s salary slip, 6 months bank statement, Form 16 of the last two years, and a Job continuity proof (which can be either one of the following):
- An appointment letter of the current job
- Current employment certificate
- An experience letter of previous job (including appointment letter and relieving letter)B.) Self-Employed
1. KYC Documents – The four mandatory KYC documents to avail a personal loan are Pan Card, Aadhar Card, a utility bill, and Voter ID.
2.Financial Documents – The following Financial Documents are mandatory
- ITR of the last 2 years along with computation of income
- Business & Residence ownership proof (any registration proof)
- Current Account statement (last 1 year) or Savings Account statement (last 6 months)
Since loan eligibility criteria are somewhat different for different lenders, therefore, before applying for a personal loan, you need to check with the loan provider about the eligibility requirements to get a personal loan in India. If you have all the mandatory documents, you can use the personal loan eligibility checker of the said lender to check if you can apply for the loan or not.
A personal loan has its own perks, but in order to avail a personal loan, you must have all the mandatory documents to be eligible to apply for it. Consider the aforementioned parameters of eligibility and make sure to have the right set of documentation while applying!