If you have been thinking about getting a personal loan for some time now, then one question that has definitely pondered your mind is the eligibility criteria for getting a personal loan. And we understand that getting offers from multiple lenders can be confusing as each of them have slightly different eligibility criterias, albeit there being some similarities.
Thus, in today’s article, we will share with you everything you need to know about eligibility criterias for getting a personal loan in India, whether you are a salaried professional or you are self-employed.
What Is a Personal Loan?
One of the first and most important aspects we need to understand, before learning about the eligibility criteria for personal loans is the meaning of one.
In simple terms, a personal loan is a financial instrument through which you can borrow a certain amount of money, usually in the range of ₹10,000 to ₹25,00,000 and repay it back via a flexible repayment plan while enjoying the benefits of a competitively low rate of interest.
The introduction of personal loans in India in the past couple of years has completely redefined the lending system in India as it develops on the shortcomings of traditional loans, we are all used to. Right from having a flexible repayment system all the way to instant Disbursal.
Eligibility Criteria for Personal Loans in India
Now that you know all about personal loans let us take a look at the eligibility criteria. Eligibility criteria for personal loans generally vary between lenders and also the type of employment you are engaged in. Albeit there are some common eligibility criterias, you should be aware of, and these are as follows.
Salaried Individuals:
If you are a salaried employee in India, getting a personal loan is as easy as uploading a couple of documents and meeting the eligibility criterias mentioned below.
- Must be a citizen of India
- Must be an active resident of India at least for the past 1 year
- Must be above the age of 21 years and below 59 years
- Must have a PAN Card and Aadhar Card
- Must have salary slip, bank statement and ITR return available with them
- Must have an in-hand monthly income of ₹13,500
- Having a credit score of 600 & 750 on a scale of 900 across both CIBIL & Experian will help the application.
Self Employed Professionals:
If you are a self-employed professional, getting a personal loan can be a little tough, but fulfilling the below-mentioned eligibility criteria will definitely make the process much easier.
- Must be a citizen of India
- Must be an active resident of India at least for the past 1 year
- Must be above the age of 21 years and below 59 years
- Must have a PAN Card and Aadhar Card
- Must have income certificate, bank statement and ITR return available with them
- Must have an in-hand monthly income of ₹15,000
- Having a credit score of 600 & 750 on a scale of 900 across both CIBIL & Experian will help the application.
There are a lot of verticals which differentiate traditional loans from personal loans.
They are as mentioned below.
- Rate of Interest
One of the first and most important differentiators between a traditional loan and a personal loan is the rate of interest. Most traditional loans in India arrive with a rate of interest starting at a minimum of 5% which is quite hefty.
On the other hand, most personal loans start at an interest rate of 1.13%, which is one of the lowest in the market.
Not only does a low rate of interest help you save money in the long run, but it also makes sure that you do not come under a lot of financial stress by taking a loan.
- Online Application
When it comes to traditional loans offered by banks and NBFCs, in most cases, you as the borrower need to visit the physical location of the bank to apply for this loan. Not only does a physical application process demand a lot of time and investment of resources, but it is also tenuous given the fact that you need to travel regularly, both to file your application and also check on its status.
On the other hand, most personal loans in India have completely online processes, meaning that you can complete the application and get the money in your bank account right from the comfort of your home.
This not only saves you a lot of time but also makes sure that you get the money in your account as soon as possible.
- Flexible Repayment Plans
The third difference between a traditional loan and a personal loan is the repayment plans each of them offers.
In most traditional loans, the lender fixes a schedule beforehand and determines both the EMI amount you need to pay every month along with the date at which you need to make the payment. While this might seem logical from the standpoint of the lender, in the long run, this might pose a financial burden for the borrower.
On the other hand, most lenders offering personal loans have a feature wherein you can customise the amount of EMI you pay every month along with the date of the payment. This ensures that you can pay back your loan at your own schedule, thus further reducing the financial burden of taking a loan.
- Instant Disbursal
Last but not least, traditional loans are infamous for the long wait times they arrive with for disbursing the loan amount to your bank account. And since in most cases, borrowers need the money instantly, like in case of a medical emergency, every minute counts and even a delay of a few days might cause serious harm.
On the other hand, most personal loans come with instant disbursal, meaning that post-approval of your application, you will have the money in your bank account within 24 to 48 hours. Instant Disbursal not only saves you a lot of time but also makes sure that you get the money in your account when you need it the most.
As mentioned, eligibility criteria for personal loans can change depending upon the lender of your choice, and thus, we suggest that you check with your lender before applying.
Ending Lines:
Getting a personal loan, especially in times when you need it the most, can help get out of otherwise stressful situations. So keep in mind the eligibility criterias as well as other details we shared in this article and use them to your advantage to get the personal loan you deserve.
