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The eligibility criteria for personal loans usually differs from lender to lender but basic eligibility parameters like credit score, income and debt that determine your repayment capacity remain similar. Your personal loan eligibility would also determine the loan amount you can avail from the respective lenders.
Key factors that determine Personal Loan Eligibility
Knowing your eligibility before applying for a personal loan allows you to make informed credit decisions. Here are the main eligibility criteria set by most of the lending institutions:
- Age:18 years to 60 years
- Employment: Salaried or self-employed individuals
- Minimum Net Monthly Income: 15,000 or above (depending upon location)
- Credit Score*: Preferably 750+
- Work Experience:
For Salaried: Minimum 1 year in present job
For Self-employed: Minimum 3 year in the same business and location - Debt-to-Income Ratio:Ideally should not be higher 50-55%, including EMI of the new personal loan you are applying for
*Applicants with lower credit scores or no credit history may still qualify with higher interest rates.
Tips to Improve your Eligibility for Personal Loan
If you are planning to avail personal loans, you can improve the chances of loan approval by following the following tips.
- Maintain a healthy credit score: Improve and maintain your credit score of 700 or above by paying EMIs and credit card dues in time
- Meet the basic eligibility criteria: By maintaining a regular source of income, along with same residence for longer tenure
- Reduce Debt-to-Income (DTI) Ratio: Payoff your existing debts and lower your Debt-to-Income Ratio below 40%
- Avoid multiple credit applications in short duration: Do not apply for personal loan with multiple lenders simultaneously, as every time the lender fetches your credit report, the credit bureau considers it as a hard enquiry and lowers your credit score
- Maintain stable employment: Do not switch jobs too often, as it reduces your minimum job tenure and eventually hampers job stability.
Adhere to these recommendations to avoid loan application rejection and ensure a hassle-free loan application process.
Also Read: Planning to Get a Personal Loan? Improve Your Eligibility With These Smart Tips
Personal Loan Eligibility Criteria of Top Banks & NBFCs
| Lenders | Eligible Loan Amount | Minimum Eligible Income | Eligible Age |
| Axis Bank | Rs 50,000 – Rs 40 Lakh | Rs. 15,000 per month | 21-60 years |
| SMFG India Credit Company Limited (formerly known as Fullerton India Credit Company Limited) | Up to Rs 30 Lakh | Rs. 20,000 per month | – |
| HDFC Bank | Up to Rs 40 Lakh | Rs. 25,000 per month | 21-60 years |
| ICICI Bank | Up to Rs 50 Lakh | Rs. 30,000 per month | 23-65 years |
| IDFC First Bank | Up to Rs 10 Lakh | Rs. 25,000 per month | 23-60 years |
| IndusInd Bank | Up to Rs 50 Lakh | Rs. 25,000 per month | 21-65 years |
| Kotak Mahindra Bank | Up to Rs 40 Lakh | Rs. 25,000 per month | 21-60 years |
| Moneyview | Rs 5,000 – Rs 10 Lakh | Rs. 13,500 per month | 21-57 years |
| PaySense | Rs 5,000 to Rs 5 Lakh | Rs. 12,000 per month | 21-60 years |
| Punjab National Bank | Up to Rs 20 Lakh | – | Above 18 years |
| State Bank of India | Up to Rs. 30 Lakh | Rs. 15,000 per month | 21-76 years |
| Tata Capital | Up to Rs. 50 Lakh | Rs. 15,000 per month | 16-65 years |
| YES Bank | Rs 1 Lakh – Rs 40 Lakh | Rs. 25,000 per month | 21-60 years |
How to avail Personal Loan Online
Follow the below mentioned steps to avail personal loan online:
Step 1: At the home page of the website, check out for ‘All Loans’ at the top and click on ‘Personal Loan’ tab.
Step 2: Enter your mobile number and click on ‘Apply Now’ to further enter the OTP to verify your mobile number.
Step 3: Verify the basic details, such as employment type, current company, residence city, salary bank, gross annual income, desired loan amount, existing EMIs and click on ‘Proceed’.
Step 4: Choose from all the available options and click on ‘Apply’.
Step 5: Enter your personal details, such as your full name, PAN card, date of birth, marital status, employment type, company name, net monthly income, purpose of loan and click on ‘Proceed’
Step 6: Now, you shall be able to proceed with the loan formalities from your desired lender.
How can New to Credit Customers avail personal loans?
New-to-Credit borrowers (individuals with no credit history) can also avail personal loans, though at higher interest rates. They should check with their Bank where they have a salary/savings account or fixed deposit for a personal loan. They can also choose secured options like Gold Loan or Secured Credit Card, to begin their credit journey and become eligible for personal loan in the future, through good credit behaviour.
Documents required
Check out the basic documents required by the lenders at time of loan application submission:
- KYC documents: Applicant’s Voters ID, Aadhaar card, driving license
- Age and address proofs: Aadhaar card, PAN card, Voters ID, passport, driving license, utility bills, etc.
- Proof of employment: Employee ID card, Offer/Appointment letter
- Income Proof: ITR, Last 3 months’ salary slips and last 6 months’ bank statement
FAQs on Personal Loan Eligibility
What are the eligibility criteria for availing a personal loan?
Lenders assess their applicants’ personal loan eligibility, primarily on the basis of their age, location, credit score, income, job or business stability, etc. before sanctioning personal loan.
What is the minimum salary required for a personal loan?
Currently, the minimum salary to be eligible for a personal loan is Rs. 15,000, as defined by most of the lenders. However, meeting the minimum salary criteria does not guarantee that your loan application will be approved, as lenders consider various other factors before loan sanctioning.
What are the eligibility requirements for availing Rs. 10 lakh personal loan?
The eligibility requirement for availing a Rs 10 lakh personal loan would be the same as that for any other loan amount, such as the applicant’s age, credit score, income, loan repayment capacity, occupation/employment, employer’s profile, etc. However, these requirements may vary from one lender to another lender.
What is the FOIR limit for personal loans?
The preferred Fixed Obligation to Income Ratio (FOIR) for most of the lenders is ranges from 40% to 50%, which balances the loan repayment and debt obligations efficiently.
Are self-employed individuals eligible for a personal loan?
Yes, along with salaried individuals, self-employed professionals are also eligible to apply for a personal loan. The self-employed professionals need to submit the required documents from the lender at the time of loan application submission. Some of the basic documents for self-employed applicants include last years’ ITR, P&L statement, last 6 months’ bank statement, business address proof, proof of business incorporation, etc.
I am 22 years of age; can I apply for a personal loan to get the phone of my choice?
Yes, you are in the valid age to apply for a personal loan and purchase the products of your likings, as banks allow applicants of 21 years or above to apply for a personal loan. However, you should maintain a decent credit score to avail personal loan or else you can apply for personal loan against credit card or fixed deposit.
Can I apply for a personal loan online with a low salary?
Yes, even if you have a salary of Rs. 15,000, still you can apply for a personal loan. However, the loan amount sanctioned will be proportionate to the salary and shall be charged at a high rate of interest.
How do I know if I am eligible for a personal loan?
The best way is to visit Paisabazaar. It would show you what loans you are eligible for, basis your chances of approval, enabling you to apply only for the best-suited offer. In case you are not eligible for any personal loan, consider secured loans like gold loans, loan against security to meet immediate money needs.
What is the minimum salary required for personal loan?
Usually, Banks need a minimum in-hand salary of Rs 15,000 as basic eligibility. Though if you need personal loan of higher amounts, higher in-hand salary may be required to be eligible. Along with salary, your job stability and employer (whether established or not) are also taken into account