The personal loan has become one of the most widely used loan kinds available today. When unexpected or budgeted expenses exceed your financial capacity, such as those associated with weddings, medical situations, or holidays, personal loans might be helpful.
People need money for far too many reasons, particularly in light of the fact that COVID-19 has nearly stopped the economy and severely impacted the lives of countless. This clarifies the reason why 77% of working people in India depend upon personal loans to get by. If you have the ability to easily make the loan repayments over the course of the loan, taking out a personal loan is regarded as an excellent alternative.
This means that, to be eligible for a personal loan, you must meet the requirements set forth by the lender. We’ll cover all there is to know about qualifying for a personal loan in this post, along with strategies to increase your chances of approval.
Why Are Personal Loans the Best Kind of Loan?
Let’s explore why personal loans have grown so popular and why many people choose them before we look at eligibility requirements and the standards you must fulfill to get your loan request accepted.
Because personal loans are unsecured, this is one of the main reasons people choose them. When compared to home or auto loans, the customer does not have to give the creditor any collateral in order to receive the loan. When compared to other loan types, applying for a personal loan requires a lot less documentation because no collateral is needed.
Finally, unlike credit card interest rates, personal loan interest rates remain fixed and never fluctuate. In the same way, you’ll be able to conveniently track your payments in addition to paying a certain amount each month.
The Indian working class has heavy responsibilities and, for the most part, struggles to make ends meet with their little monthly pay.
They struggle to fulfill their necessities and are unable to save more money, which makes it tough for them to deal with unforeseen expenses. They have no alternative but to seek money lenders in these situations if they are incapable of getting a personal loan from a banking institution.
Personal Loan Highlights 2024
| Loan Provider | R.O.I | Processing Fees | Loan Amount | Cibil Score |
| Paysense Personal Loan | 18% – 22% (Reducing Per Annum) | 2% – 5% | 50.00 k – 10.00 Lacs | 700 |
| Werize Personal Loan | 15% – 22% (Flat Per Annum) | 3% – 5% | 30.00 k – 5.00 Lacs | 650 |
| Money View Personal Loan | 17% – 36% (Reducing Per Annum) | 1% – 5% | 5.00 k – 5.00 Lacs | 650 |
| IDFC Bank Personal Loan | 10.49% – 22% (Reducing Per Annum) | 1% – 4% | 1.00 Lacs – 40.00 Lacs | 700 |
| Incred Personal Loan | 16% – 33% (Reducing Per Annum) | 1% – 5% | 50.00 k – 10.00 Lacs | 650 |
| Aditya Birla Personal Loan | 12% – 28% (Reducing Per Annum) | 1% – 4% | 1.00 Lacs – 50.00 Lacs | 650 |
| Finnable Personal Loan | 16.95% – 30% (Reducing Per Annum) | 1% – 5% | 50.00 k – 10.00 Lacs | 700 |
| Hero Fincorp Personal Loan | 9.5% – 16% (Flat Per Annum) | 1% – 5% | 50.00 k – 10.00 Lacs | 700 |
| Muthoot Finance Personal Loan | 14% – 22% (Reducing Per Annum) | 1% – 3% | 1.00 Lacs – 7.50 Lacs | 685 |
| Upward Fintech Personal Loan | 18% – 32% (Reducing Per Annum) | 2% – 5% | 25.00 k – 5.00 Lacs | 650 |
| Cashe Personal Loan | 1.5% – 3% (Fixed Monthly) | 1.5% – 2% | 10.00 k – 4.00 Lacs | 550 |
| Finzy Personal Loan | 10.99% – 18.99% (Reducing Per Annum) | 1% – 3% | 1.00 Lacs – 10.00 Lacs | N/A |
| Fibe Personal Loan | 15% – 30% (Reducing Per Annum) | 1% – 2% | 8.00 k – 2.00 Lacs | 550 |
| Faircent Personal Loan | 25% – 30% (Reducing Per Annum) | 7% – 9% | 50.00 k – 10.00 Lacs | 700 |
| Stashfin Personal Loan | 2.45% – 4% (Fixed Monthly) | 2% – 2% | 5.00 k – 5.00 Lacs | 725 |
| Tata Capital Personal Loan | 10.5% – 14.25% (Reducing Per Annum) | 0.75% – 2% | 75.00 k – 25.00 Lacs | 720 |
| Standard Chartered Bank Loan | 11.49% – 20% (Reducing Per Annum) | 1% – 3% | 1.00 Lacs – 1.00 cr | 740 |
| Bajaj Finserve Personal Loan | 13.5% – 15% (Reducing Per Annum) | 0.5% – 1.5% | 1.00 Lacs – 35.00 Lacs | N/A |
| Axis Bank Personal Loan | 11.15% – 16.25% (Reducing Per Annum) | 1% – 4% | 1.00 Lacs – 40.00 Lacs | 690 |
| ICICI Bank Personal Loan | 10.5% – 15% (Reducing Per Annum) | 0.5% – 1.5% | 1.00 Lacs – 1.00 cr | 700 |
| Fullerton Personal Loan | 14% – 32% (Reducing Per Annum) | 1% – 3% | 1.00 Lacs – 25.00 Lacs | 705 |
| HDFC Bank Personal Loan | 10.25% – 16% (Reducing Per Annum) | 0.5% – 1.5% | 1.00 Lacs – 1.00 cr | 700 |
| Shubh Life Personal Loan | 28% – 44% (Reducing Per Annum) | 1% – 3% | 5.00 k – 2.00 Lacs | 650 |
| Loan Tap Personal Loan | 11% – 24% (Reducing Per Annum) | 1% – 2% | 50.00 k – 7.00 Lacs | N/A |
| KreditBee Personal Loan | 1.5% – 3% (Fixed Monthly) | 5% – 6% | 1.00 k – 3.00 Lacs | 550 |
| FlexSalary Personal Loan | 1.5% – 3% (Fixed Monthly) | 300% – 750% | 4.00 k – 2.00 Lacs | 550 |
| Mpokket Instant Loan | 2% – 4% (Fixed Monthly) | 50% – 200% | 500 – 30.00 k | 550 |
| MoneyWide Personal Loan | 17% – 24% (Reducing Per Annum) | 1% – 3% | 10.00 k – 3.00 Lacs | 650 |
| Insta Money Personal Loan | 13% – 36% (Reducing Per Annum) | 1% – 4% | 5.00 k – 25.00 k | 650 |
| Kotak Bank Personal Loan | 10.75% – 22% (Reducing Per Annum) | 0.75% – 2.5% | 1.00 Lacs – 50.00 Lacs | N/A |
| Cholamandalam Personal Loan | 14% – 22% (Reducing Per Annum) | 1% – 3% | 1.00 Lacs – 35.00 Lacs | 675 |
| SBM Personal Loan | 14% – 20% (Reducing Per Annum) | 1% – 4% | 50.00 k – 25.00 Lacs | 700 |
| Axis Finance Personal Loan | 14% – 16% (Reducing Per Annum) | 1% – 3% | 1.00 Lacs – 50.00 Lacs | 650 |
| Shri Ram Finance Personal Loan | 13% – 16% (Reducing Per Annum) | 1% – 3% | 1.00 Lacs – 25.00 Lacs | 680 |
| One Tap Loan Personal Loan | 24% – 36% (Reducing Per Annum) | 2% – 5% | 50.00 k – 5.00 Lacs | 650 |
| Credset Personal Loan | 18% – 30% (Reducing Per Annum) | 3% – 5% | 50.00 k – 5.00 Lacs | N/A |
An Explanation of Personal Loan Eligibility
If you don’t have enough money or you need a certain amount, you might go to a bank and request a personal loan. Even though applying for personal loans online is simple, there are requirements you must fulfill in order for the loan sum to be approved. The requirements for personal loans vary from lender to lender and are contingent upon specific limitations and basic standards.
The Following are Some Fundamental Requirements that You Must Fulfill:
- You must be between the ages of 18 and 60.
- You must be a citizen of India.
- You are required to have at least twelve months of work experience.
- Your current employer must remain your employer for a minimum of six months.
- Your compensation should be at least INR 15,000 per month.
Furthermore, in addition to a properly completed application form, you must be able to provide the lender with the following documents:
- A current passport-sized photo.
- Pay slips and documentation of income.
- Such as a passport, voter ID, Aadhar card, or driver’s license as evidence of address.
Identity documentation such as a government ID card, PAN card, or Aadhar card for individuals in government employment.
It’s also crucial to regularly monitor your credit score—a three-digit figure that ranges from 300 to 900 and represents your creditworthiness—to make sure you qualify for a personal loan.
Ways to Increase Your Possibility of Receiving a Personal Loan
Financial organizations such as banks assess the borrower’s creditworthiness based on a number of factors.
These 10 Suggestions will increase your likelihood of being approved for a personal loan.
- Verify the lender’s Qualifying Requirements
Be sure to review all of the requirements of the lenders before choosing one. By doing this, you can lessen the chance that you will be turned down for unimportant reasons, such as your age or salary.
- Monitor Your Ratio of Fixed Obligations to Income (FOIR)
Repaying debts with a large portion of your income lowers your creditworthiness, which makes it harder for you to get new loans. This may make it less likely that your loan application will be approved, or worse, the lenders may decide to penalize you with a high interest rate to make up for the increased risk.
Make sure you are consistently keeping your FOIR between 40% and 50%. You may want to think about paying off your debts, including credit card debt, to improve your prospects.
- Request the Required Loan Amount
You must apply for the appropriate amount of credit in order for your application to be accepted. Utilize a personal loan eligibility calculator to determine how much you qualify for based on your earnings, current debts, and other criteria before applying for a loan.
- Refrain from Submitting Multiple Loan Applications at Once
Someone seeking financial assistance can actually end up asking for loans from several lenders when they are in need of immediate funds in order to improve their chances of having their loan accepted.
This is definitely not the greatest approach, even though it may give them optimism that at least some of the lenders may approve them. Your credit score will gradually drop as a result of the hard inquiry that every loan application causes to appear on your credit record.
- Raise Your Credit Rating
This takes us to the following tip for raising your credit score: When reviewing your loan application, lenders take your credit score very seriously. As was previously said, having a high credit score is a requirement for being eligible for a personal loan. A good score is defined as one that is 750 or higher.
Your odds of receiving a favorable response to your loan application are negatively correlated with your credit score. Reducing your debt-to-income ratio and credit utilization ratio, broadening your credit portfolio, and making on-time payments on credit card bills and EMIs constitute a few of the best strategies to raise and preserve your credit score.
- Designate Your Parents or Spouse as Co-borrowers
You can usually choose to include your parent or spouse as a co-applicant. This is particularly advantageous if your credit profile isn’t satisfactory. Including a co-applicant who has a strong credit score and income will increase your chances of acquiring a loan because it will demonstrate your ability to repay the loan, which will result in a personal loan at a low interest rate.
- Pick Your Lender Wisely
It is advisable to thoroughly investigate every alternative on the market before choosing a loan. It’s best not to choose the first lender you come across, even if money is desperately needed.
Many different financial companies have just entered the market and are offering attractive financing terms. Make sure you thoroughly examine everything to make sure you don’t miss out on any offers.
- Make Sure to List All of Your Possible Sources of Income
You must provide proof of your ability to repay the loan amount when you ask for a personal loan. Therefore, be sure to include information about whatever extra income you are making, such as rent, in addition to your basic income details. This will increase your eligibility for a larger loan amount in addition to increasing your chances of having your loan approved.
This will increase your eligibility for a larger loan amount in addition to increasing your chances of having your loan approved.
- Choose a Longer Loan Term
Your EMIs will be divided into smaller installments, and your financial strain of making on-time repayments will be lessened if you select a longer loan term. By doing this, you’ll not only lower your FOIR but also improve your chances of receiving lender approval.
- Ask About Early Loan Repayment
Borrowers are typically permitted to pay back their debts early. Even though you could choose a longer loan term, it’s a good idea to constantly look into the possibility of paying off your loan early. Prepaying a loan early can spare you from paying a hefty interest rate that you would otherwise have to pay. However, there are certain fees associated with this option.
Bottom Line
By strengthening your eligibility, these pointers will increase the likelihood that your personal loan application will be approved. Picking the correct lender is essential if you want your loan application process to be stress-free and easy, from getting the loan accepted to getting the money.