While choosing a personal loan provider from the plethora of options available in the market is comparatively easy, convincing them that you are competent to repay it is always the tricky part. Since a personal loan is a type of unsecured loan, a lot of thought goes into an applicant’s personal loan eligibility. Normally, apart from the basic eligibility requirements, such as nationality, age, and the nature of employment, the personal loan providers in India also take into account factors such as the applicant’s assets and liabilities, past credit history and potential repayment capacity before granting a personal loan. Most leading personal loan providers also offer ‘Online Eligibility Calculators’, with the help of which you can check your eligibility for availing a personal loan.
Personal loan eligibility is extremely crucial in determining the total loan amount that you can borrow with the bank or the Non-banking Financial Company (NBFC). If you feel that you fall short of any of the eligibility parameters laid down by these personal loan providers, fret not! There are certain ways to improve your personal loan eligibility.
- Pay Off Any Existing Loan
- Maintain Healthy CIBIL Score
- Clear Your Credit Card Bills On Time
- Find Alternative Source of Income
- Keep a Tab On Your Variable Pay
- Choose a Long-Term Tenure
- Pay Off Any Existing Loan
The first thing any loan provider is going to check is to see whether you already have an existing debt of any previous loan looming over your finances. This is because sometimes it becomes difficult to manage the EMI (Equated Monthly Installments) of a new loan when you already have a debt to repay. An existing loan may put a doubt in the personal loan provider’s mind about your additional loan repayment capability. Therefore, before you approach any personal loan provider, make sure you clear the balance of any outstanding loan or any other financial debt. Not only will this help make a good impression on the personal loan provider, but it will also help you better budget your new EMIs.
In order to avail any kind of personal loan in India, it is important that you have a good CIBIL score. A CIBIL score is a three-digit number whose value is reflected based on a person’s past financial credit history. Ideally, a CIBIL score of 700 and above is considered as a good CIBIL score. A lot of personal loan providers in India take into account your CIBIL score in order to determine the total amount of loan you are eligible for. Therefore, make sure that you maintain a healthy CIBIL score before approaching any bank or NBFC for a personal loan.
How punctual you are in paying your credit card bills significantly affects your credit score. In case, you default on any of your credit card bill payments, it could marginally bring don your CIBIL score value, ultimately affecting your chances of being eligible for a sizable personal loan. Therefore, make sure that you clear all your credit card payments on time. Another advantage of being punctual with your credit card payments is the fact that it gives a positive message to the creditors, that you will not default on any of your monthly installments. This could help build trust between you and your personal loan provider, further boosting your personal loan eligibility.
Your monthly source of income is an importanteligibility criteria for availing a personal loan. For instance, the Bajaj Finserv Personal Loan eligibility requires that the minimum monthly take-home salary to be INR 37,000 (for applicants residing in Tier I cities) and INR 27,000 (for applicants residing in Tier II cities). In case you fall short of this requirement, try to find an alternate source of income. This alternate income can be generated through various ways. For instance, if you have any commercial or residential property, you can rent it out and use that money as an alternative source of income. In case, you do not hold any such assets but have a working spouse, you can even apply for a joint personal loan in order to increase your personal loan eligibility. Taking a joint personal loan also decreases the liabilities of repaying the loan. This helps avoid any financial strain on yours, as well as your spouse’s monthly budget.
Variable pay is a benefit offered by most employers in the form of bonuses, incentives, or commissions. At the time of applying for a loan, ensure that you have an updated record of your variable pay. Some personal loan providers take this record into consideration while determining your personal loan eligibility.
At the time of applying for a personal loan, you can either choose a short-term or long-term personal loan tenure. A short term tenure lasts between 1-5 years, whereas a long-term personal loan can be tenured for 5 years and above. A major advantage of long-term tenure over a short-term personal loan tenure is that the EMI amount gets significantly reduced. This is because, as the tenure extends, the outstanding loan balance gets divided over a longer period. Also, as the EMI amount gets reduced, it decreases the chances of a borrower defaulting on his/her loan. As a result, the personal loan provider can also get a relief that the borrower will be able to repay the loan over the long tenure. Thus, opting for a long-term tenure could significantly boost your personal loan eligibility.
In order to ensure, that you do not end up wasting your time, it is important to check your eligibility before you approach any personal loan provider. To explore your personal loan options with Finserv Markets, visit now!
Finserv Markets, from the house of Bajaj Finserv is an exclusive online supermarket for all your personal and financial needs. Loans, Insurance, Investment and exclusive EMI store, all under one roof- anytime, anywhere!