What Are The Eligibility Criteria Of Taking A Personal Loan

A personal loan is a form of an unsecured loan provided by multiple financing companies in the country, which cannot be put against any collateral. Most banks avail personal loan based on criteria like credit history, income level, employment history, repayment capacity and other financial factors that can directly and indirectly affect the repayment of a loan. The rule and regulations of personal loans vary from one applicant to another based on their profession and other relevant factors.

Personal Loan can be used for anything according to the desire of the applicant. Many Banks have made multiple categories of Personal loan, which allows applicants to apply for education, vacation, wedding and other forms of short term loans.

Who can apply for Personal Loan?

  • Age

Salaried employees from the age of 21 till 60 are eligible for applying for a home loan.

Self-employed individuals above 28 years and doctors above 25 years of age can apply for personal loan till 65 years old.

  • Net Salary

Salaried employees with a monthly income of and more than INR 4000 – 17,500 can apply for the loan. (The net income vary depending on the area)

A nonsalaried individual with a minimum turnover of INR 40 lac is eligible to apply for the loan.

  • Proof of Business Stability and Job Security

The salaried employee needs to share their salary receipt of past few months to prove their job stability. The applicant should be working with his current company for a year while applying for the loan.

While non-salaried individual should be running their business for 5 years, with minimum profit worth of INR 2 Lac after tax.

  • Credit Score

CIBIL Score anything between 350 – 900

Note: These eligibility criteria might vary depending on the terms and conditions of different banks. So, ensure to confirm these details with your respected banks before applying for a loan. 

Documents required for applying for Personal Loan

  • Photo Identity Proof: Authorized by the Government of India
  • Residence Address Proof
  • Residence Ownership Proof
  • Income Proof: Salary slips or Business profit of last year
  • Job Continuity Proof or Business Continuation Certificate
  • Bank Statement: Last 6 months
  • Investment Proof
  • 1 passport size color photograph 

Are you Eligible?

Banks basically decide an applicant’s eligibility for getting a Personal Loan based on 4 modules.

  • Income

Applicants with higher income with a stable business or a job have a chance of getting loan approval, compared to people with lower income and unstable financial condition.

  • Repayment Ability

In order to assure that the borrowers repay the loans, financiers check the financial creditability of the applicant like their assets, expenses, and liabilities.

  • Existing EMIs

Existing loan obligations directly put a negative effect on your creditworthiness, unless you have a solid financial stability to handle an additional debt.

  • Credit Score

Financial history plays a significant role in ascertaining the creditworthiness of an applicant. Almost every band checks the credit score of the applicant before sanctioning him them the loan. A good credit score ranges from 300 – 900. And higher credit score represents higher creditability. You can get a better credit score by paying little extra fees instantly.


Important Things to Keep in Mind while applying for Personal Loan

  • EMI Rate

It’s always confusing to set a perfect EMI amount as higher EMI’s have shorter tenures which resulting in lower interest rate, whereas lower EMI rates can prompt in inducing higher interest because of the longer tenures. You can use Personal Loan EMI Calculator to select the appropriate EMI according to your current income online.

  • Disclose all Liabilities

Before applying for the loan make sure to share all your liabilities and details about your previous loans with the bank executives. We recommend you to be open about your financial situation with the bank officer as he/she might end up giving a better plan or idea to tackle the situation. So ensure to keep documents relating to any such liability or creditability together to share with your bank.


Thankfully Personal Loans don’t have a strict set of rules and regulations, so you don’t have to worry so much about getting your loan sanctioned. Just make sure to keep all your documents really as they are the verification that bank will use to validate your information.

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