Offers
Rates
V-KYC
Debit Card Related
Credit Card Related
SA Welcome Kit 
Manage Mandate(s)
Get Mini Statement
categories
Bloggers
Blog collection
Press Release
Who is Eligible to Apply for a Personal Loan?
Posted on Monday, June 26th, 2023 | By IndusInd Bank
Personal loans have become a popular financial tool for individuals seeking funds to fulfill their immediate needs or manage unexpected expenses. Whether it’s funding home improvements or covering medical bills, an instant personal loan is a flexible borrowing option to suffice your needs. However, it’s crucial to understand the eligibility criteria and factors that influence loan approval before applying for a personal loan. In this blog, we’ll outline the key criteria lenders typically consider, helping you assess your eligibility and increase your chances of securing the loan.
Credit Score
One of the primary factors that lenders assess when evaluating personal loan applications is your credit score. A credit score reflects an individual’s creditworthiness and history of repayment. A higher credit score means a lower risk for lenders and more chances of loan approval. While credit score requirements vary from lender to lender, a score of 700 or above is often widely accepted, while a score below 600 may pose challenges. Maintaining a good credit score by making timely payments of your existing loans/credit cards and managing debts responsibly can significantly improve your eligibility for an instant personal loan.
Income and Employment History
Lenders closely evaluate your income and employment history to determine your ability to repay the loan. A stable and consistent income source assures lenders that you can meet your financial obligations. Employment history, including job stability and duration, also plays a crucial role. Typically, lenders prefer borrowers with a steady employment track record, indicating reliability and a reduced risk of default.
Debt-to-Income Ratio
The debt-to-income DTI ratio is another essential factor that lenders consider. It is basically the percentage of your monthly income that goes into debt payment. A lower DTI ratio indicates better ability to manage additional debt obligations. While specific requirements may vary, a DTI ratio below 40% is generally considered favorable. To improve your eligibility, consider reducing existing debts or increasing your income. Lowering your DTI ratio not only boosts your chances of loan approval but also enhances your financial stability.
Age and Citizenship
Age and citizenship are basic eligibility criteria for personal loan applications in India. You must be above 21 years old and a citizen or permanent resident of India to be considered eligible for an instant personal loan. Lenders also require AADHAAR and PAN verification along with other documents listed in the loan requirement. However, some prominent lenders like IndusInd Bank offer 100% paperless application process for personal loan and you can get instant approval without the need of in-person bank visits and physical documentation.
Conclusion
Getting a personal loan can provide the financial assistance you need. Understanding the eligibility criteria is crucial before applying, as it helps you assess your chances of approval. Factors such as credit score, income, employment history, and debt-to-income ratio play a significant role in determining your eligibility and chances of approval. By maintaining good financial habits and meeting the above-mentioned criteria, you can maximize your chances of securing a personal loan.
If you’re looking for an instant personal loan at best-in-class rates, then do check out IndusInd Bank Personal Loan that is mindfully designed to fit into the varied needs of individuals as per their lifestyles. With IndusInd Bank Personal loan, you get to enjoy instant approval, quick disbursal, and flexible repayment tenure options. That’s not all, its application process is 100% paperless with minimal or low processing fee*.
Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.
