Banks and NBFC provide a personal loan after ensuring different eligibility criteria of the customer. It is beneficial for everyone needing funds to fulfill their requirements. Often, one cannot manage a lump sum amount at a time when he has some urgent. To manage the cash, you can apply for a personal loan anytime. There are some eligibility criteria for a personal loan if you are a salaried person. It is also available for the self-employed. We discuss some specific criteria; these are as follows.
Based on income
A personal loan is generally approved for a salaried person because the lenders want to ensure the repayment. They can get the details of the income of a borrower. The minimum salary for a personal loan is fifteen thousand; for metro cities, it is up to twenty thousand. The lenders use multiplier methods which means they approve the loan amount by multiplying the salary by the number of months. So, the loan amount can vary based on salary. Different lenders have different terms and conditions. Your eligibility criteria may be different according to their rules.
Work experience
A salaried person must have work experience of one year or at least six months with a current employer. These criteria are there to ensure the customer’s experience and stability, who will be able to pay the loan amount with his regular income. It can also be different according to the lenders.
Credit score
The CIBIL score of a customer is calculated according to his transactional history. A good salary is not enough; you must maintain your credit score with a fair transaction. If you are borrowing a loan, you must repay it on time. Always try to pay the EMI without any delay. A good credit score is necessary for getting a personal loan.
Transactional history
It is required for a good credit score and an excellent financial reputation. Your transactional history is based on your previous borrowed amount and its repayments on time. If you are using a credit card and getting late in its repayment, you may have to face some difficulties in the approval of the loan. You can get a personal loan with a reasonable interest rate if you maintain an excellent transactional history.
A personal loan is also available for the self-employed, but their eligibility is slightly different from a salaried person. The self-employed must have a good turnover and income tax return report for at least two years. They can also apply for a personal loan with a good credit score. The personal loan for self-employed is mainly considered based on their existing business.
There are different kinds of personal loans according to their utilization, where one can get them for personal usage. It can be borrowed for the arrangements of weddings, traveling, consolidation of the debt, etc. It may not be easy to arrange an immense amount at a time. So, you can apply for the loan and repay it with a different EMI.
There are other types of loans based on their repayment tenure: short-term loans. It is also considered for the salaried person, and the amount is based on salary. In a short-term loan, the loan amount is thirty to forty percent of the paycheck. You can borrow the amount according to your income. Its repayment tenure is of thirty days. It is generally borrowed when one has a shortage of funds at the month’s end and has to wait for his salary. A short-term loan is to manage the fund’s need for that particular time. It would help if you never forgot that an instant cash loan repayment must be made with the salary. It may create trouble for you if you are late in repayment. It may cause some difficulties for your eligibility for next time.
Conclusion
Borrowing a personal loan is easy for a salaried person having these eligibilities. You must have an appropriate salary, a good credit score, an income tax return report, work experience, etc. A personal loan is unsecured because of the absence of collateral. The landers verify all the eligibility criteria and then approve the loan.
