- Looking to apply for a personal loan? Beware of the factors that affect the approval process
- Read this post to know those factors and apply smartly to get an approval
Personal loans are unsecured loans that you can access without any collateral. And to get instant approval from the bank or financial institution, your income should be high enough to pay the proposed equated monthly installment. There is no fixed income criterion for a personal loan, it may vary based on the lender you choose. Plus, there are several other factors that lenders consider before approving a personal loan. So, if you are seeking a personal loan, you can read this post that talks about everything that could influence the loan approval. Let’s get started.
Age & Income
Across most of the banks in India, the minimum age to apply for a personal loan is 21 years. And the maximum age is 60 years to pay the borrowed amount. However, it is the basic criteria you need to meet to get your personal loan approved. After that, the income criterion needs to be met. To get a personal loan, you need to have a minimum monthly salary as required by the lender. You can find a lender offering you a personal loan to individuals with a modest monthly salary of INR 10,000. On the contrary, some lenders will like to see your monthly salary is in the range of INR 15,000-25,000 at least. So before applying for a personal loan, do check the income that lenders seek. This will help you apply at the right lender based on your income.
See the table below to know the income required to get personal loan approval from different lenders.
|Bank||Minimum Monthly Income|
|State Bank of India (SBI)||INR 15,000|
|ICICI Bank||INR 17,500|
|HDFC Bank||INR 25,000|
|Kotak Mahindra Bank||INR 20,000|
|RBL Bank||INR 20,000|
|Standard Chartered Bank||INR 25,000|
|Axis Bank||INR 15,000|
|IndusInd Bank||INR 25,000|
|IDFC First Bank||INR 20,000|
|YES BANK||INR 25,000|
A Good Credit Score
You may find it hard to get the personal loan approval if your credit score is low. A credit score is a representation of the user’s creditworthiness. The score ranges from 300 to 900 and if your CIBIL score is 750, you have higher chances of getting your loan approved. But if you have a lower credit score, you can take a few months and improve your score and then apply to get personal loan approval.
If you are salaried and need a personal loan, the lender will approve your loan based on the work experience. It takes your work history and finds the stability you have in your job. A minimum of 2-year work experience required to borrow a personal loan. Because it gives the lender a surety that you’ll have a regular source of income and pay the loan on time.
Every salaried individual working in corporate, private or public sector companies, local bodies, etc. can apply for a personal loan. But is that enough to get a personal loan approval? No, it’s not! The bank or NBFC checks the status of your employer to know how much stability it provides to the employees.
Choose the Loan Amount That You Can Pay
The lender will reject your loan request if you apply for a loan above your repayment capacity. Because banks and NBFCs provide you a personal loan depending on your income, monthly expenses and expected savings. Normally, the loan amount is decided in a way that the proposed personal loan EMI and other obligations remain within 50% of your net monthly income. However, this can change based on the amount you earn.
Don’t Apply for Multiple Loans
If you are thinking that applying for a personal loan from one or more banks will increase your chances of personal loan approval, you are wrong! Instead, it may lead to multiple rejections and harm your credit score. You must consider only one lender at a time to apply for a personal loan.