A personal loan is a sensible way to finance emergency expenses, such as an urgent healthcare need. People also take personal loans to pay for marriages and holidays. Whatever your purpose for taking a personal loan, you should be sure of your personal loan eligibility so that your loan application gets approval and doesn’t meet with rejection.
What is a Personal Loan?
Personal loans are taken to fund any individual expense, be it an urgent need for cash to supplement health insurance or fees for a student course. A personal loan is a breather in times of monetary need. Here are some features/benefits of a personal loan:
- You get loan amounts of a maximum of Rs. 25 lakhs.
- You get flexible repayment options, ranging from 1-5 years.
- You do not have to show collateral as this is an unsecured loan.
What is the Eligibility Criteria for a Personal Loan?
After you have decided on a personal loan, but before you make a personal loan application, you should know you must fulfil criteria to make you eligible to apply. Here are the key criteria you must meet:
- You should have an income of at least Rs. 15,000 per month
- You should have a strong credit profile with a CIBIL score of 600 and above
- You should have at least 2-3 years work experience
You can check your personal loan eligibility with an electronic calculator at Finserv MARKETS and be sure that you meet criteria.
Possible Reasons for Personal Loan Rejection
When you make a personal loan application, lenders want to be sure that you, the borrower, has the willingness and ability to repay the loan within a stipulated period. Your creditworthiness is a main indicator of this, and your CIBIL score shows this. Typically, the reasons for personal loan rejection are the following:
- Lack of an Appropriate Credit Score – A credit score is a summary of your credit profile, which includes your financial history. If you have a low score, this means that you have previously been in less than optimal financial health, or currently have outstanding debt. In such cases, your personal loan application will not be approved. A score of 600 and above ensures that you are in sound financial health and the higher the score, the higher loan amounts will be.
- Inadequate Personal Income – If you do not have the appropriate monthly income that is required for personal loan eligibility, your loan application will be rejected.
- High FOIR Ratio – The FOIR ratio stands for the Fixed Obligations to Income Ratio. In case you have any pre-set financial obligations like EMIs, house rent and other expenses to pay for at the time of taking your personal loan, lenders may view this as a reason for rejection if the ratio is high. Lenders want to guarantee that any obligatory payments do not impede your loan repayments.
A Personal Loan at Your Fingertips
Meeting eligibility criteria is a good way to ensure that you get a personal loan instantly, especially if you apply for one at Finserv MARKETS. Doing your research beforehand is key, and you get all the information on personal loans here.
