With the rising user aspirations and an increasing income-expenditure gap, growth under the personal loan segment has been remarkable, obtaining a 24% share of total credit in March 2020.
· Further, as per a forecast for the 5-year period between 2020 and 2025, personal loans are expected to maintain a consistent growth rate of 10%.
· As of January 2020, personal loans also saw a Y-O-Y increase of 134% in their origination volume.
A significant contribution to such growth can also be attributed to the increasing availability of these advances, marked typically through minimum personal loan eligibility requirements. Now, while eligibility for an advance defines an individual’s qualification, such qualification can be of two types, i.e., based on the criteria specified and loan amount availability. Below is a detailed look at how you can check your eligibility for the advance for easy credit approval.
How to check your eligibility for a personal loan?
As personal loan eligibility can be identified based on two specifications, the following are the ways you can check your eligibility for the credit.
– Through lender confirmation
To check the specified qualification criteria for the advance, an individual need to get in touch with the concerned lender either in person or through their website. Such eligibility requirements can vary from one lender to another, with some of the standard criteria are given below –
a. Age must be between 23 and 55 years.
b. Applicant must be a salaried individual employed with a public/private company or an MNC.
c. He/she must hold a CIBIL score of at least 750.
d. Applicants must also be a residing Indian citizen with a minimum monthly salary based on his/her city of residence.
To provide for these eligibility criteria, one must also attach the important documents required while applying for a personal loan.
Personal loan eligibility is also defined by the maximum amount an individual can avail based on the contributing factors such as income, expenses, etc.
– Through personal loan calculator
Individuals can also use a personal loan calculator dedicatedly, which is provided for such computation to determine their eligibility for the maximum loan amount available. Note that such eligibility is capped and cannot exceed the maximum loan value a lender provides.
When assessing the maximum personal loan amount, the following details need to be entered into the calculator –
i. Your city of residence.
ii. Date of birth.
iii. Monthly income.
iv. Monthly expenses.
Once entered, the loan calculator instantly reflects the maximum credit value you can avail based on your repayment capacity, age and city of residence.
While it is a way to check your current eligibility for the advance, it does not limit your financial capabilities which can be improved by adopting a few simple ways.
Tips to improve personal loan eligibility
Following are the best tips to take out a personal loan with improved eligibility.
1. Maintain a high credit score
A high credit score depicts an individual as a responsible borrower, thus improving his/her chances of easy approval. As the credit score is computed based on essential factors like debt to income ratio and credit utilisation ratio, a high score also indicates an improved repayment capacity with low ratio maintenance.
2. Apply for a loan amount lesser than your maximum eligibility
You can also choose to apply for a loan amount that remains under your maximum personal loan eligibility to ensure a high repayment capacity.
3. Document all income sources
As income is a critical parameter that defines the maximum loan amount an individual can avail, documenting all income sources also denotes a high repayment capacity and reduced risk of default.
To further enable easy borrowing of personal loans, NBFCs like Bajaj Finserv keep document requirements to a minimum.
They also ensure hassle-free and quick loan processing with their pre-approved offers, available on personal loans, business loans, credit cards, and other financial products. Provide only your name and contact details to check your pre-approved offer.
While personal loan eligibility improvement is possible, individuals must inculcate the habit of practicing financial discipline in their everyday lives. Doing so shall help avail various other credit options with ease along with personal financing.