Personal loans come in the form of short-term borrowings that are unsecured as they do not require any collateral or security at the time of disbursal. They are usually dispersed within 24 hours to 48 hours and require minimal documentation. One of the prime features of a personal loan is the flexibility to use. Online personal loans can be flexibly used to meet a range of expenses such as medical expenses, planning a wedding, revamping the house, and many more. You repay the loan amount back which also includes an interest in monthly EMIs.
As Online personal loans are not backed with any collateral or security, the risk associated with lenders is higher than that with a secured loan. There are multiple factors that a lender considers while deciding the eligibility for a personal loan of a borrower.
Key Features of Personal Loan
- No Collateral: Online Personal loans are collateral-free. You don’t have to provide any security to avail of these loans. They are approved based on your creditworthiness, CIBIL score, total income, and many more factors.
- The flexibility of Use: They are flexible to use, they can be used in meeting expenses such as medical emergencies, home decoration, debt clearance, and many other purposes.
- Flexible repayment tenure: They have a flexible repayment tenure, which ranges from 12 to 60 months.
- Paperless proces: The process to avail of personal loans is generally paperless. The documents that an applicant needs to provide include identity proof, address proof, and income proof.
- Quick Disbursal: The disbursal time of personal loans is generally quick and is disbursed within 24 hours of loan approval.
Factors That Affects Personal Loan Eligibility
Below mentioned points are some key factors that are taken into consideration by creditors before granting a personal loan to a borrower. The weightage of the different factors varies from lender to lender.
- Your monthly income – Monthly income is an important factor for almost every lender in all kinds of loans. Personal loans being unsecured, they are offered without any security. The lender would make sure that you have a sufficient flow of income, which will allow you to repay on time. For personal loans online, the minimum monthly criteria set by lenders in the majority for salaried professionals is Rs. 15,000.
- Credit score – A credit score is a three-digit number based on how you have handled the past repayments of your loans and credit cards. This score ranges between 300 to 900. Higher is the credit score, the better will be your chances of your loan being approved. For low-interest personal loans, lenders generally prefer a credit score above 750. In case your CIBIL is below 700, you should first work on your credit score to improve before applying for the loan.
- Employment status – Lenders generally offer loans to professionals working in private, government, or multinational companies, as well as self-employed individuals and professionals like architects, chartered accountants, doctors, etc. An individual working in renowned companies gives creditors security of their job stability and steady income flow.
- Your age – To ensure you have an adequate number of working years remaining, age helps the lender to secure that. Most creditors offer personal loans to applicants in the age group of 21 years to 60 years.
- Your current liabilities – The last important factor of the personal loan eligibility standards is your present liabilities. If you are repaying an existing loan, like a home loan, education loan, and some other loan. The lender would like to know about them in detail. This lender ensures that the borrower has an adequate source of income to repay the existing debt along with a new personal loan.
Documents Required To Check Eligibility for Personal Loan
Documents Used by Lenders to check eligibility are different for a salaried professional and a self-employed individual. Here is the list of documents:
Documents Required To Check Eligibility for Personal Loan
For salaried individuals:
- KYC Documents: Proof of Identity, Address, and Date of Birth such as Aadhar card
- Residence Proof: Rent Agreement or Utility Bill of the latest 3 months.
- PAN card
- Latest 3 Months Bank Statement
- Latest 3 Months Salary slips
For self-employed applicants:
- PAN Card
- KYC Documents: Proof of Identity and address
- Proof of Residence: Rent Agreement or Utility Bill of the latest 3 months.
- Income proof
- Latest 3 Months Bank statement
- Office address proof
Apply for Personal Loan Online
PayMe India offers a low-Interest Personal loan with complete transparency and simplicity. PayMe India provides loans instantly with minimal documentation and also includes a fully digital paperless process.
You can apply online with an easy online application. The loan gets instantly disbursed into your account shortly after the loan is approved. Personal loans from Rs. 500 to Rs. 2 lakhs can be availed to meet planned as well as sudden expenses.
