It is a three-digit number that summarises how you have treated credit card and personal loan repayments in the past. Credit bureaus calculate this score, which ranges from 300 to 900. Your chances of being accepted for a new personal loan increase as your credit score approaches 900.
Banks typically provide personal loans to salaried professionals working in private, government, or multinational corporations and self-employed individuals and professionals such as businessmen, CAs (chartered accountants), physicians, architects, and other professionals. Because of their job security and employer prestige, lenders choose salaried workers working in respectable companies or government employees for a personal loan.
Individuals between the ages of 21 and 60 are eligible for personal loans from most banks. Although older people may be eligible for a personal loan such as a pension loan, there are certain limits on the amount of money that can be lent.
Minimum monthly salary: Most banks like Syndicate Bank Personal Loan set a minimum monthly income of Rs for salaried professionals. 15,000 as a requirement. Individuals with a minimum monthly or yearly income of Rs. 25,000, however, are favored by banks. A gross annual income or credit score of at least Rs. 5 lakh is typically required for self-employed individuals to qualify for a personal loan.
Job/business experience: Many banks need salaried employees to have a cumulative work experience of two years, including at least six months in the current position. To qualify for any loan, you must first establish a business. To be eligible for an unsecured personal loan, self-employed individuals and professionals must have been in their current company for at least two years.
Eligibility Requirements for Salaried Applicants for Personal Loans: Salaried candidates, such as physicians, attorneys, and chartered accountants, are eligible for a personal loan. While the exact eligibility requirements for a personal loan may vary depending on the lender, the following are some of the most common eligibility criteria for salaried individuals:
| Age Group Eligible: | 21 to 60 years old |
| Minimum Net Monthly Income | Rs. 15,000 |
| Minimum Total Work Experience | One year | Minimum Work Exp. with the current organization | Six months |
| Minimum Prior Relationship with a lender | Six months |
The personal loan eligibility requirements mentioned above are merely guidelines. Lenders may loosen or tighten the eligibility conditions for a personal loan from one borrower to the next at their discretion.
How is the Amount of a Personal Loan That Is Eligible Calculated?
The maximum Personal Loan Eligibility is mainly determined by their ability to repay the loan. The following are the two essential methods that banks use to assess the maximum amount of personal loan that is eligible:
FOIR (Fixed Income to Commitment Ratio) Approach: The method focuses on the cumulative monthly contributions that the borrower would make to pay off current debt. If an applicant's FOIR is greater than 50% of his or her take-home pay, the personal loan application will be denied, or the loan sum sanctioned may be less.
Net Monthly Income Method: Some lenders determine the maximum loan amount by multiplying the applicant's net monthly income (NMI). In such situations, the amount of a personal loan available can be up to 30 times the applicant's NMI. If the loan sum sought reaches this cap, the application will not be considered eligible for an unsecured personal loan.
Conclusion: You can boost your loan eligibility by having a near family member, such as your spouse, parents, or other relatives, co-sign your loan application. In the case of personal loans, not all banks and NBFCs currently allow co-borrowers. However, if possible, having a co-borrower will significantly increase the chances of getting a personal loan.