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Personal loans are unsecured loans, and customers need not pledge collateral while applying for them, unlike home loans and education loans. However, they have eligibility criteria which change depending on the loan-issuing bank. The personal loan eligibility criteria laid down by most banks are simple.
IDFC FIRST Bank, for instance, requires a salaried individual to be at least 23 and a self-employed individual to be at least 25 years old while applying. You can check the other eligibility criteria by visiting the bank’s site. This article enlists a stepwise procedure to qualify for a personal loan in India and apply for one.
1. Define your financial goal and decide on a loan amount
Before applying for an online instant personal loan, you must know everything about your financial goal. Your goal could be organising an upcoming wedding, bearing the medical expenses arising from hospitalisation in the family, or planning a vacation. Defining your financial goal entails knowing all the loan details, namely the total loan cost and the loan amount you should apply for. You must prefer higher loan amounts that help you meet any financial goal.
2. Research the market for suitable interest rate options
Customers must also research the market for suitable options to select the right personal loan. Certain personal loans offer a low-interest rate but offer a lower loan amount to customers. On the other hand, banks like IDFC FIRST Bank provide loan amounts of up to ₹ 1 Crore at a competitive interest rate. You must choose personal loans offering a Balance Transfer facility. A Balance Transfer option helps you to transfer the outstanding balance from your other personal loans to your latest lender.
3. Use a personal loan EMI calculator to know your repayment cycle
You must know all the details of your personal loan’s repayment cycle before applying for a personal loan. You can use a personal loan EMI calculator like the one on IDFC FIRST Bank’s site to know the value of your future EMIs (Equated Monthly Instalments). Customers must be aware of their repayment cycle since doing so can help them plan for their future expenses.
4. Project an ability to repay your loan
If the bank rejects your personal loan application for a low credit score or offers you a lower loan amount, you can show proof of a higher earning capacity to avail of a higher loan amount. Doing so inspires confidence in the bank regarding your loan repayment capacity.
5. Submit the required documents
Banks generally do not require customers to pledge collateral while applying for personal loans. You must submit identity-proof-related and age-proof-related documents to proceed with your loan application.
The steps mentioned in this article are the ones you must follow to qualify for a bank loan without any hassle. Since the eligibility criteria of banks differ, you should visit the bank’s website and check its eligibility criteria before applying. You can also use online tools like a personal loan eligibility calculator to estimate the loan amount you are eligible for.