Vikas (21) had been working with an IT company in Hyderabad and earning Rs 15,000 a month when he approached a private bank for a personal loan to fund his sister’s wedding. Rahul (25) had just shifted base to a new city and had approached a public sector bank for a personal loan to buy furniture for his new home. Digvijay (20) thought he would take a loan from the bank where his father maintained an account for him to do something special for his girlfriend this Valentine’s Day. The fates of these three individuals were intertwined as their personal loan plea would be rejected by the banks and for the same reason i.e eligibility.
It is important to know your personal loan eligibility before approaching the bank. A personal loan is an unsecured loan offered by most banking and non-banking financial institutions. Knowing the eligibility criteria for the personal loan helps speed up the application process. Different banks have different eligibility criteria such as income, age, credit score, employment status. Apart from this, they also require proper documentation before sanctioning the loan. Here are some quick picks on how to check personal loan eligibility:
- The minimum age limit for applying for a loan is 21 years and 60 years is the upper limit. This is the standard age bracket, but it can slightly vary from bank to bank.
- The age bracket also depends on the individual’s occupation. Salaried individuals have to be between 21 and 58 years. For self-employed individuals and businessmen the age eligibility is 25 and 65 years
- Both salaried and self-employed individuals are eligible to apply for a personal loan
- Doctors, CAs, employees of private limited companies and public sector undertakings, including state, central and local bodies are eligible for the loan
- The individual must have a job for at least 2 years or have completed a minimum of 1 year with the current employer
- One must earn a minimum of Rs15,000 net income per month. The minimum income is sometimes as low as Rs 4,000 as well, depending upon where you stay
- If you a resident of a metro city such as Mumbai, Delhi, Hyderabad, Bengaluru, Chennai, Pune or Kolkata, your minimum income is expected to be at least Rs 20,000 per month
- Your CIBIL score is a huge factor when applying for a personal loan. You CIBIL score will be assessed to evaluate your eligibility. Any score between 350 and 900 points is considered good enough to be given a loan. But it is preferred to have a score of above 750 to get the best interest rates.
Your minimum and maximum lending amount is fixed by the bank depending on your income levels and capacity to pay back the loan and any existing EMIs. The loan amount disbursed depends from one bank to another. The maximum loan amount can go up to Rs 50 lakhs. The loan tenure is usually for 12- 48 months. The tenure can be extended to 72 months.
There are certain documents that are required to be submitted to procure a personal loan. Some of the other documents that you should keep ready before applying are:
- Identity proof
- Address proof
- Bank statement of previous 3 months or passbook of previous 6 months
- Salary slip or the current dated salary certificate
It is better to judge your personal loan eligibility criteria before approaching the bank with an application. If Vikas, Rahul and Digvijay referred to in the beginning had done the same then there would not have been any impediment to fulfilling their dreams.