Personal loan is an unsecured loan with the facility of getting high loan amount at attractive interest rates and flexible tenure. If a borrower is stuck in some unavoidable financial need, a personal loan is the best option. The debtor can use the money to meet any personal need of money or a professional one. A personal loan can be availed by a salaried as well as a self-employed individual.
A personal loan eligibility is an eligibility of the maximum loan amount that a person can get from the bank if he/she is applying for a personal loan. However, to get a personal loan, a borrower must match certain eligibility criteria which in variable depending upon the lender.
A personal loan eligibility criteria lets the borrower know the options available in the market depending on the age, income and profession. However, eligibility criteria vary from lender to lender. The general criteria for a personal loan is outlined below:
|Minimum Age||21 Years|
|Maximum Age||58 Years|
|Minimum Income||₹ 4,000 – ₹ 20,000|
|Employment Type||Salaried/Self-employed Professionals Non-Professionals|
|Work Experience||At least 2 Years of work experience with a minimum of 1 Year in present organization|
|Maximum Loan Amount||Up to ₹ 50 lakhs|
Here are some of the main factors that affect the personal loan eligibility of the borrower:
Monthly Income : A regular and good source of income if one of the most important factors in the loan amount that a borrower can get from the banks or NBFCs. Hence, a good in-hand monthly income is most likely to get higher loan amount.
Age: Just like any other loan, a personal loan borrower must fulfill the age criteria which is variable depending upon the banks. Majorly, the age criteria for a loan borrower is between the age of 21-58 years. However, some lenders have the upper limit of 65 years as well.
Monthly Expenses: To get a personal loan, monthly expenses like investments and other responsibilities of the borrower are considered by the banks. If the monthly expenses are higher, getting high loan amount can be hard.
Any Other Loan: Banks often find it easier to lend money to the borrower's who have no other running loan. As the repayment capacity of the borrower if higher if he/she is free from any other loan.
Credit History: The credit history of the applicant is most importantly taken care of as CIBIL score play a very important role in getting a personal loan. As a result, maintaining a higher CIBIL score is very helpful to get more fund.
Job Stability: A good job stability is another important factor when it comes to a personal loan. A person who has good working experience with a minimum of 2-3 years can get a hassle-free loan.
Relationship with the Bank: Maintaining a healthy relationship with the banks/NBFCs is very important to get a personal loan smoothly. Since there are chances that the borrower can get the higher loan amount at low-interest rates.
Category of Your Employer: If the borrower is working in an MNC or the employer comes under fortune 100 companies, the loan eligibility increases as the loan repayment capacity also increases.
The general documentation required to apply for a personal loan is as follows:
For Salaried Individuals
For Self-employed Individuals and Professionals
In general, any individual who is having a good income source, good credit history and is between the age of 21 years and 65 years can take a personal loan. Banks or other financial institutions prefer applicants who have a good credit history and have a good relationship with the employer.
For eg., If a salaried person wants to take a personal loan, his/her loan eligibility will be calculated on the basis of his/her monthly in-hand income, age and work experience. On the other hand, if a self-employed personal wants to take a personal, annual income, age and the type of work along with the work experience will be counted. Some lenders offer a personal loan to self-employed without documents and to salaried individuals with salary less than ₹ 15,000. The age limit set for the personal loan is in general between 21 years to 65 years.
Almost all private and public sector banks provide a personal loan at attractive rates and flexible tenure. A borrower can choose the best-suited bank or NBFCs as per their own choice and requirement provided they are eligible for it. Here are the top banks in India that provide higher loan amount at attractive interest rates and flexible tenure.
SBI offers a personal loan to salaried as well as self-employed individuals under three schemes namely Xpress Credit Personal Loan, SBI Saral Personal Loan and Loan to Pensioners. The bank offers loan for a minimum of ₹ 24,000/- under the Term Loan and of a minimum of Rs. 10 lakhs under Overdraft facility. The SBI personal loan interest rate 2016 is 11.90% per annum onwards.
The personal loan eligibility for SBI is as follows:
Be it any financial need, HDFC personal loan is calculated on the basis of the age, income and professional experience of the loan applicant. If a borrower comes under the eligibility criteria set by the bank, getting a personal loan gets smoother.
The eligibility criteria for personal loan from HDFC is as follows:
ICICI personal loan is a multi-purpose loan available for salaried as well self-employed professionals. The bank offers personal loan from 11.59% p.a. onwards with the flexible repayment facility up to 5 years. A salaried individual can get the loan amount up to ₹ 20 lakhs whereas the loan amount limit is up to Rs. 30 lakhs for a self-employed professional.
The eligibility criteria for taking a personal loan from ICICI Bank is different for salaried and self-employed individuals.
For Salaried Individual
For Self-employed Individuals and Professionals
Axis Bank personal loan can be taken by salaried residents as well as NRIs. The banks give the flexibility to take the loan amount up to ₹ 15 lakhs with minimal documentation and loan tenure up to 5 years. The personal loan eligibility calculator Axis Bank considers the age, income and profession of the applicant.
For a personal loan, an individual must meet up the below-given eligibility criteria:
To avail the instant personal loan in India, Kotak Mahindra Bank personal loan is one of the best options. The bank has the facility to provide the maximum loan amount to ₹ 15 lakhs with repayment option up to 5 years and interest rates ranging from 11.29% to 14.29% per annum.
The eligibility criteria to take a personal loan from Kotak Bank is:
There is a certain loan amount limit decided on the basis of the factors set by the banks/NBFCs. On the basis of those factors, an individual can get a personal loan smoothly. To get a clear idea about a general loan amount that a person can get, let us take an example.
Let us assume that a man is working in a reputed organization and earns a net monthly income of ₹ 60,000/-. Now, after meeting all his financial liabilities, he can easily save 40%-50% (₹ 24,000- ₹ 30,000/-) of his monthly salary. The borrower would think how much personal loan can I get on my salary?
Now, here the bank will assume that he is saving 50% of his monthly income i.e. ₹ 30,000. So, this saving can be used to repay the loan amount in the form of monthly EMIs. So, the personal loan eligibility can be calculated as follows:
Required Loan Amount- Rs 1 lakh
Loan Tenure- 5 years
Rate of Interest -14.5%
Monthly EMI- ₹ 2,353
Now let's make a reverse calculation on his monthly saving of ₹ 30,000, considering ₹ 2,353 to pay a loan of ₹ 1 lakh. So, the calculation of personal loan will be:
₹ 1 lakh x 30,000/2353 = ₹ 12 lakhs
Personal loan eligibility amount - ₹ 12 lakhs