Eligibility Criteria and Documents Required To Apply For A Personal Loan
In today’s world, a personal loan can be an incredibly useful financial tool for individuals who need funds to meet their expenses. However, before …
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Personal Loan
Published on : April 18, 2023
In today’s world, a personal loan can be an incredibly useful financial tool for individuals who need funds to meet their expenses. However, before applying for a personal loan, it’s crucial to understand the eligibility criteria and the required documents for the application process. Meeting the eligibility criteria and providing the necessary documents can increase the chances of loan approval and ensure a smooth loan application process. In this article, we will tell you everything about the eligibility criteria and documents required to apply for a personal loan.
What is a personal loan?
A personal loan allows individuals to borrow a sum of money for various purposes, including debt consolidation, home improvements, or financing a wedding. Personal loans are commonly provided by banks, credit unions, or online lenders and must be repaid with interest over time. It’s important to note that some lenders may also levy fees for personal loans.
The Impact of Incomplete Document Submission on Personal Loan Approval
Failing to meet the eligibility criteria or provide the necessary documents can lead to loan rejection or delays in the loan application process. It can also affect the interest rates and loan amount the lender offers. Therefore, it is essential to carefully review the eligibility criteria and document requirements before applying for a personal loan and ensure that all necessary documents are in order. By adhering to these guidelines, applicants can improve their likelihood of obtaining approval for a personal loan and securing the necessary funds to meet their financial obligations.
Eligibility Criteria
To be eligible for a personal loan, specific criteria must be met. These include:
Applicant age
At the time of loan application, the applicant’s age must be between 22 and 58 years, which is the maximum age allowed at the time of loan maturity.
Work experience
The applicant must have a minimum work experience of one year with at least two months of stability with the current employer.
Income
The applicant must have a minimum net monthly salary of Rs. 20,000.
Employer category
The applicant should be a full-time employee with a company, private or public limited corporation, or LLP.
Citizenship
Personal loans are only available to Indian citizens.
Credit score
Most lenders require a minimum credit score of 650 or above to be approved for a personal loan. To improve their credit score, individuals should make timely repayments on existing loans, maintain a low credit utilisation ratio, and avoid defaulting on payments.
Meeting these eligibility criteria can increase the likelihood of loan approval and ensure a successful personal loan application.
Documents Required
Having all the necessary documents is crucial to ensure a smooth application process when applying for a personal loan. This is a list of documents that are typically required to apply for a personal loan:
Documents Required for Salaried Employees
| Photo Identity Proof | PassportVoter’s ID PAN CardDriving Licence Aadhar Card |
| Residence Proof | PassportAadhar CardUtility BillRation CardDriving Licence |
| Proof Of Ownership Of Residence  | Property DocumentsElectricity BillMaintenance bill |
| Income Proof | Salary Slips for last 3 months along with Form 16Bank Statement for previous 6 months where the salary has been credited |
| Proof of Job Continuity | Employee certificate from current employerCertificate of experience Appointment letter from current employer (if the employment period exceeds two years) |
| Proof of Investment | Fixed deposits, shares, fixed assets, mutual funds, etc |
| Photograph | 1 Passport size photograph |
Documents Required for Self-Employed Individuals
| Photo Identity Proof | PassportVoter’s ID PAN CardDriving Licence Aadhar Card |
| Residence Proof | PassportAadhar CardUtility BillRation CardDriving Licence |
| Proof Of Ownership Of Residence  | Property DocumentsElectricity BillMaintenance bill |
| Income Proof | Salary Slips for last 3 months along with Form 16Bank Statement for previous 6 months where the salary has been credited |
| Proof of Job Continuity | Employee certificate from current employerCertificate of experience Appointment letter from current employer (if the employment period exceeds two years) |
| Proof of Investment | Fixed deposits, shares, fixed assets, mutual funds, etc |
| Photograph | 1 Passport size photograph |
List Of Documents For NRI Applicants
| Identity Proof | Copy of your passportCopy of your visa |
| Employment Proof | Appointment Letter Job Contract Identity/Labour Card (if Applicable)Official email ID or HR email ID |
| Income Proof | Bank statement of last 6 months Salary slips/Salary certificate |
| Photograph | Recent passport size photograph |
List of Documents Required for Pensioners
| Proof of Identity/Age (Any One) | Ration Card PAN cardVoter ID PassportDriving LicenceSchool Leaving CertificateBirth Certificate |
| Proof of Address (Any one) | Aadhar CardPassportRation CardUtility BillsDriving Licence |
| Income Proof | Bank Pass-bookBank Statement of Last 6 MonthsForm 16Income tax ReturnsCopy of pension payment order |
| Photograph | Recent passport size photograph |
Conclusion
Applying for a personal loan can be a great financial option for those who need funds to cover personal expenses, consolidate debt, or address a liquidity crunch. However, meeting the eligibility criteria and providing the necessary documents is vital to ensure a smooth loan application process and increase the chances of loan approval. It is crucial to carefully review the eligibility criteria and required documents before applying for a loan. By preparing the documents correctly individuals can increase their chances of securing a personal loan that meets their financial needs.