Whether you are taking a Personal Loan for a dream vacation or funding your higher education, understanding it thoroughly is crucial. Various banks allow people to file Personal Loan applications; however, there are crucial aspects to consider regarding loan eligibility and planning EMI.
Understanding your Personal Loan eligibility helps determine whether you are eligible to take a loan or not. In this blog, we will discuss Personal Loan eligibility in detail and plan EMIs before submitting a loan application.
What is Personal Loan eligibility?
A Personal Loan eligibility is a criterion decided by the financial institution before granting the loan. If an individual meets that criteria, then they are eligible for a Personal Loan. Here is the general Personal Loan eligibility criteria.
- Applicants must be at least 21 years of age to apply for the loan, and the maximum age for a Personal Loan is 60 years at the time of maturity.
- There is a minimum monthly income requirement that applicants must fulfil to qualify for the Personal Loan.
- Applicants also need to show their work experience to ensure their employability and repayment status.
Key factors that determine your eligibility
Personal Loan eligibility depends on several factors, including credit score, current liabilities, and other relevant factors. Here are some key factors that determine Personal Loan eligibility.
Credit history
One of the key factors in determining Personal Loan eligibility is a borrower’s credit score and history. Applicants with high credit scores generally indicate lower credit risk. A good credit score can help improve your chances of loan approval.
Current liabilities
Another crucial factor to consider for Personal Loan eligibility is current financial liabilities. Any existing debts or financial commitments can impact the Personal Loan repayment.
Repayment capacity
While granting a loan, banks also analyse the applicant’s repayment capacity by going over their monthly income and work history. A stable income with fewer financial implications helps banks in approving loans.
How to calculate your eligibility using the eligibility calculator?
Calculating the eligibility for Personal Loans is easy using the calculator. Here is how you can calculate the eligible loan amount based on your status.
- Step 1: Go to the official website of the bank and open the “Personal Loan Eligibility Calculator”.
- Step 2: Fill in the required information, including your date of birth, income, and expenses. Ensure to enter all the information correctly.
- Step 3: Once the details are entered, the tool will display the eligible loan amount for applicants.
How to plan your EMIs using calculators?
Planning a Personal Loan EMI is crucial for applicants for timely payments. Here is how an EMI calculator for a Personal Loan helps in giving ideas about EMI based on the loan amount, before taking out a loan.
- Step 1: Open the EMI calculator for a Personal Loan on the official bank webpage.
- Step 2: Enter the loan amount, interest rate, and tenure.
- Step 3: The calculator will display the estimated EMI.
Key Takeaways
Knowing all about the Personal Loan eligibility is important for financial institutions. The financial institution uses these eligibility criteria to determine whether they have to grant the loan to applicants or not. Applicants can use the Personal Loan eligibility calculator to know the eligible loan amount based on their income. Similarly, an EMI calculator can be used to determine the expected EMI for the desired loan amount.
