A sudden financial emergency can hit you at any moment. Be it a medical emergency or a big-budget purchase, unforeseen expenses are unavoidable. Running from one place to another to secure money in these circumstances can be stressful. This was the scenario a few decades ago, but today, with easy financing and instant personal loans, financing has become amazingly simple. With the personal loan app, you can apply for a personal loan and get the amount credited to your account within minutes.
Unlike other types of loans, a personal loan is an unsecured loan and does not ask you to submit any collateral. So, to check whether you are a worthy candidate or not, the bank has a list of eligibility criteria and asks for you to submit some mandatory documents. Individuals who are salaried and self-employed must meet different qualifying requirements and submit relevant documentation. For better understanding, we have provided all the necessary information on personal loan eligibility and documentation if you are applying from a new loan app.
What Are Personal Loan Eligibility Criteria?
Though every lending institute may offer different rates of interest their eligibility criteria are similar to one another. Here’s a list of eligibility criteria for salaried and self-employed individuals.
- Age: You must fall between the age range of 21 to 58.
- Citizenship: You must be a citizen of India.
- Occupation: Open to both salaried and self-employed individuals
- Work Experience: As a salaried employee, you need to have been working for at least six months. In case, you are a self-employed employee, you need to have been in your current industry for at least two years.
- Monthly Income: You must earn at least ₹15,000 every month.
- Maximum Loan Tenure: The repayment terms can be extended up to 60 months.
- Maximum Loan Amount: Usually you can apply for a loan of up to ₹ 5 lakh, but some lenders may offer you an amount than that depending on your profile.
What Are the Factors Affecting Your Eligibility Criteria?
Here’s a list of factors that affects your eligibility criteria for a personal loan:
- Credit History: Your ability to obtain a personal loan will depend on your credit score and credit history. This element will influence the interest rate, loan term, and loan amount you are eligible for.
- Age: Each lender has an age requirement that you must meet to continue the application process. The most common age criteria are between ages 21 to 58.
- Housing situation: Your chances of getting your application accepted are better if you live in your own residence. The cause of this is that renting reduces your discretionary income, which diminishes your capacity to repay.
- Your location: Your residence’s location is an important factor in establishing your eligibility for a personal loan.
- Organization: Your employer will also have an impact on your ability to obtain a personal loan. You come off as having steady employment if you work for a well-known corporation with a strong reputation.
- Existing Credit: Your possibilities of obtaining a new loan will be reduced if you have already taken out a personal loan, to improve your chances, you must pay it back on time.
- Salary: The amount of the loan for which you would be qualified will depend on your income level. Your ability to obtain a personal loan will also be influenced by your income. So, try to maintain a steady income.
What Documents Should You Keep Handy While Applying for a Personal Loan?
Here’s a list of documents you will need to apply for a personal loan as a salaried individual:
Mandatory Documents
- Application form
- Coloured passport-size photo
Identity Proof (any one)
- Aadhaar Card
- Passport
- License
- PAN Card
Residential Proof (any one)
- Passport
- Drivers License
- Ration Card
- Utility Bill
- Aadhaar Card
Income Proof
- Form 16
- A six-month salary slip
- Six-month bank account statement
Residence Ownership Proof
- Property paperwork
- Power bills
- Maintenance bills
Job Continuity Proof
- Current employer letter of employment
- Experience certificate from the previous employer
Now have a look at the list of documents necessary for a Self-employed Individual:
Mandatory Documents
- Application form
- Coloured passport-size photo
Identity Proof (any one)
- Aadhaar Card
- Passport
- License
- PAN Card
Residential Proof (any one)
- Passport
- Drivers License
- Ration Card
- Utility Bill
- Aadhaar Card
Income Proof
- Form 16
- A six-month salary slip
- Six-month bank account statement
Office Address Proof (any one)
- Property documents
- Rent agreement
- Maintenance bill
- Utility bill
Business Existence Proof
- Copy of tax registration
- Proof of shop establishment
- Certificate of company registration
Conclusion
Eligibility criteria and documentation are critical components of the personal loan application process. Your loan will be accepted only if you meet the qualifying requirements. Once you have met the qualifying requirements, you must submit your papers for verification. Once the verification is over, your decided loan amount will get deposited in your bank account and can fulfill all your financial needs.