Personal Loan Eligibility, Documents and Application Process You Should Know

Individuals seeking lump sum funding to meet their big-ticket expenses can easily resort to availing a personal loan from any of the reputed lenders providing financing. These are usually unsecured advances and lending institutions require an individual to meet the minimum personal loan eligibility criteria to qualify for financing. It is necessary to meet these requirements as the increased risk of lending in the absence of asset collateral is matched with the stability and creditworthiness of a borrower profile.

Financial institutions thus make it compulsory for individuals to meet minimum income and credit score eligibility to apply for a personal loan. One must thus check his/her eligibility for the advance before applying. Similarly, it is also essential to know other aspects related to a personal loan to be aware of the whole borrowing picture for a wise financial decision. Below are detailed the essential aspects related to a personal loan.

Minimum Personal Loan Eligibility Criteria

You must meet a handful of requirements before applying for the advance to quality personal loan eligibility. These requirements can vary depending on the lending institution selected. However, some standard requirements still apply based on which you can determine whether your profile approximates the necessary eligibility fulfilment. Find Below are some of them listed here.

• Must be in the desired age range of say 23 to 55 years of age
• Should be either a salaried or a self-employed individual
• Employed individuals must have job stability of not less than 6 months in the current employment and a total work experience of 1 year.
• For self-employed applicants, a business stability of at least 1 year qualifies for advance
• Depending on the city of residence, an applicant must also hold a minimum monthly or annual income
• He/she must be a residing Indian citizen with not less than 1 year of stability

Once you have met these personal loan eligibility requirements, you can proceed to apply for the advance.

You can also improve your personal loan eligibility by following a few tips – 

• Apply with a credit score of not less than 750 as it indicates a high creditworthiness for the concerned borrower profile, reducing the risk involved in lending.
• Avoid sending multiple loan applications in a short span as it invites hard enquiries from the lender, impacting your credit history negatively.
• Repay existing dues in a lump sum as it clears your monthly income by the proportionate repayment liability charge. And improves your repayment capacity.
• Maintain credit repayment within due date and in full as it represents disciplined financial habits.
• Document all income sources, whereby doing so shall automatically push your repayment capacity up, making you eligible for a higher loan amount. Additional income apart from the standard sources includes rental income, investment profits, etc.
• Apply for a smaller amount than your actual loan eligibility as thus also represents you as a borrower with a higher repayment capacity than you initially estimated. Confirm your loan suitability based on your profile with the help of a personal loan EMI calculator. A dedicated financial tool that allows you to estimate your repayment liability, EMIs payable. And interest payable throughout the loan tenure.
• You can also apply with a co-borrower who qualifies for the advance. And holds a high credit score as it would push up the total personal loan eligibility.

Documents Required for Personal Loan Application

During your loan application, you would also be required to provide a handful of necessary documents that should help establish your personal loan eligibility fulfilment. Make sure to keep these documents handy before applying to ensure a smooth, hiccup-free loan application. And fast-tracked processing with your lending institution.

Some of the essential documents you would be ask to submit during your loan application include the following. Note that the list of documents is only indicative and the lender may ask for additional documents based or not based on their personal loan eligibility criteria to confirm applicant profile qualification for the advance.

• Proof of identity: Lenders accept multiple photo documents carrying an individual’s name as proof of identity, which are issued to them from an authorised body. They can include a PAN card, Aadhaar card, Voter ID card, Passport, Driving License, and the likes. 

• Proof of address: Any of the above documents that also carry the individual’s address can also serve as proofs of address. Further, any other address-carrying document issued by an authorised body can also serve as a proof of address. And can include the likes of ration, card, rental agreement, utility bills, etc.

• Occupation proof: You also need to establish your occupation and its stability with the necessary documents to ensure personal loan eligibility fulfilment. In the case of salaried individuals, employee ID issued by the employer, experience certificate. And such other documents certify his/he employment. For self-employed applicants, documents like company registration certificate, partnership agreement, GST certificate, and the likes qualify as occupational stability proof.

• Income proof: You must also provide necessary documents to prove a stable and regular flow of income, both monthly and annually. The common proofs of income for individuals in both occupations include bank account statements and Income Tax Return filed. Further, a salaried individual can also provide their salary slips as income proof. For self-employed applicants, the additional paperwork for income eligibility includes. Their financial statements like balance sheet, profit and loss statement, and the likes.

Along with these, you need to provide a duly filled up application form along with your passport-sized photograph/s. As required by your selected lending institutions. Provide all or any additional document asked for to go through a hassle-free loan application processing. And improve your chances of quick loan approval. This is all about the documents. Read below about the process to apply.

The Process to Apply for the Advance

Once you have met the personal loan eligibility requirements and arranged for all the necessary documents to complete the paperwork, you can proceed to initiate the loan application process. You can either apply for the advance with your selected lender offline at your nearest branch or do so online.

In the offline personal loan application process, you would need to visit your lender branch. And fill up the application form. Follow it with document and photograph submission. Once applied, you can wait for lender verification and further processing.

Online loan application is, however, more convenient and less time-consuming as it eliminates any lengthy processing and streamlines your application. Complete the following steps to apply for your personal loan online.

1. Visit the official website of your selected financial institution.
2. On the website, navigate to the application form.
3. Proceed to fill in the necessary personal, employment, and financial details as asked for. Make sure to enter accurate details to avoid any hassles during loan processing.
4. Submit the application form on the portal.
5. Next, a lender representative would visit your given address for profile verification and document collection.
6. Once the paperwork is complete, eligible individuals can expect approval within the next 24 hours.

When selecting your personal loan provider to apply with, make sure to check the features provided along with the loan to maximise your benefits. If you hold high personal loan eligibility than required, utilise it to negotiate with your selected lender for favourable rates and other terms as well.