If you are looking to secure a loan to meet any pressing financial obligations, the best option for you is an instant personal loan. To avail of a personal loan, all you have to do is apply online or via the company’s website or mobile application.
However, before applying for a personal loan, make sure that you meet the essential personal loan eligibility criteria which are set by the lender. If you fail to meet some or all of the personal loan eligibility criteria, securing an instant personal loan to meet your financial requirements can prove to be very difficult.
Listed below are the five basic factors that, if met, will help you secure an instant personal loan with agreeable terms:
● Your CIBIL Score: Your CIBIL Score tells about your financial history – and contains all details pertaining to money borrowed in the past, your repayment history, and your creditworthiness. On the basis of your CIBIL Score, lenders determine the loan amount you are eligible for and the interest rate to be levied. In general terms, if you possess a CIBIL Score that is at least 750 or higher, you can find it easy to meet the personal loan eligibility criteria and secure an instant personal loan. If your CIBIL Score is lower than the threshold of 750, your loan application may either be rejected or you will have to incur a steeper rate of interest. A high credit score indicates to lenders that you have a good repayment history and will most likely not default on your loan repayment. If you currently have a CIBIL Score that is less than 750, you can take several steps to improve it – such as ensuring consistent repayment of all existing loans and clearing any bad debt in your name.
●Your Income: Another major factor that determines your eligibility for a loan is your monthly income. This is because the lenders view those individuals positively who have a higher income as it ensures timely repayment of instalments. For salaried individuals, this amount translates to an income of a minimum of ₹3 Lakhs per annum. However, for those individuals who are self-employed, the minimum income requirement to be eligible for a loan is much more than just ₹3 Lakhs per annum. It is assumed that if an individual is earning well, they will naturally have more money to meet basic requirements pertaining to living (such as rent, utilities, food, clothing, transportation and so on), and will have a sizeable sum left over to repay the loan amount, every month. As per an industry rule, the rate of your total monthly EMIs should not be more than 35% of your monthly income. For those individuals with a higher monthly income, the EMI portion should exceed 60% of their monthly income.
● Your Employer: Most lenders in the market also make sure to check the details pertaining to your employer before sanctioning a loan. This is because an organization with a high monthly turnover is considered to be more secure and holds better goodwill in the market. Thus, lenders prefer offering loans to those employed with MNCs, rather than those working in start-ups, small and medium-sized companies, and proprietorships. Thus, most lenders also offer employees of MNCs loans at much lower rates of interest.
● Your Age: Lenders prefer offering loans to those who are younger, as it is believed that a younger individual has a greater propensity to repay a loan. This is also backed by the fact that a younger individual has many more years to earn, and will thus be less likely to default on loan repayment.
● Your Job Stability: A major factor that most lenders consider before offering a loan is an individual’s job stability. If you are looking to secure an easy personal loan, you, as a salaried individual, must possess full-time work experience of at least two years in your current organisation. If in case you are self-employed, you must showcase an income turnover of at least five years. If you are staying on for a long time in an organisation, the lender assumes that you are stable enough to be offered a loan. Thus, those with employment gaps, or even those who have changed jobs frequently, are generally not offered loans by lenders. If by chance the latter are offered loans, they will have to incur much steeper rates of interest.
Tips and Tricks to Enhance Your Chances of Getting A Personal Loan Sanctioned
In addition to the key factors mentioned above, if you wish to ensure that your application for an instant personal loan is approved, you should:
● Repay all existing loans and debts before applying for a personal loan.
● If you are using a credit card, make sure that you repay the due amount timely, and, if possible, in full.
● Always maintain a positive debt-repayment ratio, as well as a credit history.
● Ensure your CIBIL Score never falls below 750.
● To further enhance your eligibility, showcase all additional income sources such as variable pay, incentives, and even passive income (from hobbies, if any).
To summarise, before applying for an instant personal loan, make sure you conduct adequate research and go through the lender’s terms and conditions of eligibility. By adhering to the eligibility criteria, not only can you ensure the chance of approval, but you can also avail of a lower rate of interest and easier terms. Before applying for a personal loan, you can also make use of the personal loan calculator, to make a better informed financial decision.