When you apply for a Personal Loan, lenders check various factors related to your financial history before approving your request. Since Personal Loans are unsecured, lenders do not have anything to recover their money in case of default. Hence, your creditworthiness plays an important role in getting loan approval.
Personal Loans (PL) can be availed of at attractive interest rates. Apart from being collateral-free, these loans come with no end-use restrictions. Before applying for the loan, you can also use a PL eligibility calculator to calculate the approximate loan amount that you will be able to receive.
How to use an online EMI calculator
PL eligibility calculators are widely available online. With the help of this tool, you can determine your monthly payments based on your loan amount, loan tenure, and the interest rate offered to you. Online EMI calculators are easy to use and find. Many lenders also have EMI calculators on their websites to help borrowers plan a repayment strategy beforehand.
To calculate your EMI, you must enter basic details such as your desired loan amount and tenure, and the interest rates offered to you. The tool will give out an estimated EMI value, which is your monthly payment against the loan amount. However, keep in mind that these results approximate your monthly payments. Your actual payment amount will differ based on the lender’s terms and conditions.
Determining your creditworthiness for Personal Loan application
Your bureau score is calculated based on your financial track record. Various credit bureaus evaluate your creditworthiness such as TransUnion Credit Information Bureau India Limited (CIBIL), Equifax, Experian, and CRIF High Mark.
Your bureau score is a three-digit number that ranges between 300 and 900. As mentioned above, this score is calculated based on your repayment history, credit mix, existing loan instruments, and other factors related to your financial health.
Lenders consider your bureau score as the first parameter for Personal Loan eligibility. Having a healthy credit score generates more confidence among lenders, allowing them to approve your Personal Loan application. You can easily get a Personal Loan with a CIBIL score above 700.
The table below shows different credit scores and their acceptance rate. Please note that this classification is just indicative, not sacrosanct.
|Not up to the mark
Personal Loan eligibility criteria
- Age: The minimum age for Personal Loan eligibility is 24 years and the maximum age is 58 years at the time of maturity
- Citizenship: The applicant is required to be a citizen of India
- Employment: Employees who are full-time employed with the state or central government, PSU, MNC, Listed, Unlisted Public Ltd., Private Ltd., LLP, colleges and schools, or companies that are listed internally are eligible for a Personal Loan
- Work experience: The applicant should have job experience of at least 2 years, with 6 months of stable employment with the current employer.
- Monthly income: The applicant is required to have a net monthly take-home salary of a minimum ₹40,000
Documents required for Personal Loan
- KYC documents: You need to submit your Aadhaar card or PAN card as your KYC documents.
- Address proof: You are required to procure soft copies of your Passport, utility bills, or your rental agreement.
- Income documents: You will be required to submit your latest salary slip.
- Financial documents: You will have to procure your salary credit statement for the past 3 months.
- Employment proof: Official email ID confirmation or Employee ID card in case email id is not available.
If you wish to avail of a Personal Loan, you can check the different interest rates that lenders are offering and choose a lender that is offering the lowest interest rates. As the application procedure is fully digital, you can apply for the loan with just a click of a button from the comfort of your home or office.
Further, if you have a bureau score (credit score) above 700, you can get approved for a Personal Loan. Before applying for the loan, do remember to check the eligibility criteria and the required documents. In addition to this, you can use an online PL eligibility calculator to calculate your monthly payments to plan your repayment strategy.