Home / Brand Post / Check your eligibility before you apply for a personal loan

When compared to secured loans, personal loans are much easier to get. There is no need for you to pledge collateral to secure funding, and you can get approved for a loan without hassles.

In fact, lenders today have greatly expedited the lending process, so much so that you can get a 100% online personal loan from your preferred lender, right from the comfort of your home. Nevertheless, when you apply for a personal loan, even if it is an instant personal loan, approval is not guaranteed. Rather, your application is subject to an approval and verification process, and you will get funding only if you meet your lender’s eligibility criteria.

These criteria are put in place to safeguard repayment and relate to aspects such as your credit score, repayment history, and current income. To learn more about meeting the eligibility criteria for a personal loan, read on.

Maintain a high credit score

Your credit score plays a key role in the instant personal loan approval process as it serves as a numerical estimate of your creditworthiness. Since a personal loan is an unsecured offering, there is no security for your lender to lean back on in case of a default. Hence, your financial profile becomes immensely important.

Credit scores are offered by agencies like CIBIL and range between 300 and 900 points. A score of 750 or above is considered ideal. Most personal loans are approved for applicants having such a score.

Your credit score is based on factors such as your previous performance with debt, current loans, exposure to credit, and credit utilisation ratio. Strive to get your credit score into the ideal range, that is, 750 and above. You can do so by:

• Paying current EMIs on time

• Keeping your credit utilisation ratio below 30%

• Avoiding multiple loan applications all at once

• Applying for a mix of secured and unsecured loans

• Avoiding excessive borrowing

A credit score of less than 750 may not make you ineligible for funding, but as your score drops, the interest rate offered to you may increase as the lending risk increases.

Keep your debt-to-income ratio low

Alongside your credit score, another factor checked by lenders is your debt-to-income ratio when approving your application for an online personal loan. This is the proportion of your current income that goes into servicing your total debt.

Considering that you may require about 60% of your income to manage your household expenses and fixed obligations, you should try to keep your debt-to-income ratio to less than 40% of your current income. Your debt-to-income ratio is a factor that is as important as your credit score, as it is of little worth if you have a high credit score but do not have surplus money each month to pay your EMIs.

Lenders like Bajaj Finserv even help you pick the loan amount based on your monthly income and expenses. You can use the personal loan eligibility calculator to see how much funding you can qualify for. Similarly, you can use the personal loan calculator to pick the right tenure and compute EMIs that will not only suit your finances, but also keep your net interest payment in check.

Meet the lender-specific eligibility criteria

Besides these two factors, you should also scan through the personal loan eligibility criteria listed out by your lender. Each lender has their own terms and checking to see that you meet them ensures that your application is not flagged later. Lenders may, for instance, set age limits so as to restrict funding to those possessing a certain amount of working years in their career.

NBFCs like Bajaj Finserv offer finance on simple personal loan eligibility terms. Here, for instance, are the criteria you must meet to get a Bajaj Finserv Personal Loan.

• You must be a residing citizen of India

• You must be aged between 23 and 55 years

• You must be a salaried individual working with an MNC, public, or private company

• You must have a CIBIL Score of 750 or above

• You must possess the city-specific minimum monthly income

Once you meet these terms, simply gather the few required documents to verify your eligibility and proceed to apply for the instant personal loan.

It is important to check that you have a high credit score, possess a low debt-to-income ratio, and meet your lender’s eligibility criteria before you apply for a personal loan. This ensures that your application is not turned down.

When you apply for a personal loan from Bajaj Finserv, you can get approved for up to Rs.25 lakh. Further, you stand to have the entire sanction disbursed to your account in just 24 hours* post -approval. Bajaj Finserv offers funding at an attractive interest rate and for flexible tenures that stretch up to 60 months. All you need to do to get funding expeditiously is fill out the online personal loan application form today!

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