Finance

Tips to Improve your Eligibility for a Personal Loan

Improve your Eligibility for a Personal Loan

A personal loan is an unsecured kind of credit that you get to finance a personal expense. You may take a personal loan to fund a marriage, for instance. While this is the most common loan that people opt for, applying for one requires that you meet certain eligibility criteria. The best personal loans may offer you low rates of interest, but you need to assure lenders that you are eligible to pay back the loan on time. 

Personal Loans Explained

Personal loans let you borrow funds from a lender and you must pay the loan amount back, with interest, in EMIs. Personal loans of up to Rs. 25 lakhs are sanctioned if you meet eligibility criteria of lenders. Moreover, you should be sure that you can pay back the loan amount with the stipulated interest in a specific tenure. An easy online way exists, to know about your individual personal loan eligibility. Check on any lender’s website and you will find an eligibility calculator. By entering your details, you get to know if you are eligible to take a personal loan from a particular lender. 

Eligibility Criteria for a Personal Loan

Everyone wants to take the best personal loans, but you should know what the eligibility criteria are first. They are listed below: 

  • Age – You should be above 21 years of age.
  • Income – To avail a personal loan, you should have a monthly income of Rs. 15,000 from any source (salary, fixed deposits, etc.).
  • Work Experience – You must display work experience of at least 2-3 years in total.
  • Credit Score – Lenders need to be convinced that you have the ability to pay back the loan you take in a timely manner. In order for lenders to be assured of this, lenders insist you have a good credit score of at least 600. This is a summary of your credit profile showing whether you are in sound financial health or not. 

Tips to Improve your Eligibility

When you know about personal loan eligibility check whether you fulfil criteria first. In case you do not, here are some tips to improve your eligibility for a personal loan: 

  • Maintain a High Credit Score – This should be your goal even if you have no need for a personal loan. You can’t foretell future events and in case you require loans, maintaining sound finances helps you while getting any loans.
  • Select a Long Tenure – Long tenures of loan repayment mean you have to pay lower EMIs every month, and these may be easily achievable.
  • Settle Existing Debt – Before you take a personal loan, any existing debt (other loans, credit card balances,etc.) should be paid off as this reflects badly on your credit score, and consequently, eligibility.
  • Avoid Multiple Loans – It is not advisable to apply for several loans at once. This portrays an image of desperation to take loans on your part and doesn’t sit well with lenders. 

Concluding Comments

It is fairly easy to take a personal loan today, and you can get the best personal loans with low interest rates and high loan amounts. This is all provided you show a good credit score and optimal financial health overall.

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