These days it is very common to see your mailbox flooded with emails which offer you the best kind of personal loan. These banks and companies offering loans make sure that the offers and deals are customized especially according to your needs and requirements. Personal loans are the easiest to avail. This ease to get the loans makes them a popular choice among the people in India. Another thing that makes personal loans most sought after is that you do not need to give any collateral or guarantee. Also, the usage of the loan amount isn’t monitored by the lender.
If you too are looking forward to avail personal loans, then it becomes imperative that you know all the eligibility criterion that is essential for any individual who wishes to take loans. Knowing the eligibility details will also make it easier and simplified for you to avail the loan and go through the entire application process.
Before we tell you the common eligibility, let us tell you that each bank and financial institution has its own benchmarks and requirements. But there are some common pointers which we’ll list out here.
- There is a minimum and maximum age limit. Minimum generally being 21 years and the maximum is 60 years. There might be some variations depending on the type of loan and the financial institution you choose. But broadly it remains this.
- Your employment type and employment status are also taken into consideration while you apply for personal loans. It can vary from self-employed to professionally employed. You can also be a salaried professional. Time since which you have been working is also taken into consideration.
- Also, it is imperative that you have a fixed income. The minimum limit for which varies, but generally, it is around 4k-21k per month. Based on this income your ability to repay the loan and the EMIs are calculated and thus you need to essentially furnish these details.
- Then comes your CIBIL score. The range for this varies between 350-900. Having a respectable Credit score will increase your credibility to repay the loans.
It is suggested that before you apply online for personal loans, you do not get lured by just low-interest rates. Do not fall into the trap of low-interest rates. You should rather look if the rates being offered are flat interest rate basis, or reducing interest rate basis. Low-interest rates always don’t mean that you’ll be paying less amount as interest. Therefore, be cautious of the interest rates being charged before you apply for the loan. If you think that you will have to pay just the interest charges when you take any loan, then you are wrong.
There are a plethora of other costs and hidden charges involved in the loan and you should be aware of them. Banks might charge you the processing fee. It can be up to 1-2% of the total loan amount, or some banks and institutions even charge a flat processing fee. This processing fee then adds up to the total cost of the loan and can prove to be costly to you if you do not pay attention to it while you are applying for the loan. Apart from the processing fee, there may be prepayment or late payment fee applicable depending on when you choose to pay back your loan amount.
Bank officials may try to convince you to take a loan of the higher amount, but you should focus on your needs, else you can be trapped and will eventually have to repay more. Borrow only that much amount which you need.
Based on these points your eligibility to avail a loan can be decided upon.