Are You Eligible to Apply for Instant Loan?
Before you apply for instant loan, you need to ensure that you are eligible for the loan and the best loan terms available. Specific fixed eligibility criteria could lead to your application getting rejected if you don't meet them. Other factors impact your eligibility and your loan terms. In this article, we'll explore it all.
Eligibility Criteria Before You Apply for Instant Loan
The applicant needs to be an Indian national and needs to fulfil specific other criteria:
Generally, the applicant needs to be between the ages of 21 and 65 when they apply for instant loan.
The applicant has to be a salaried or self-employed individual with a regular income stream.
Most lenders have a cut-off you need to meet to be eligible for a loan.
Most lenders have a bare minimum monthly salary requirement to be able to apply for instant loan.
Factors that Affect Your Instant Loan Eligibility
Let's now understand how the above criteria also affect the type of loan terms offered.
According to the lender, your loan repayment capacity is higher the younger you are. However, the older you are, the lower your repayment capacity is. Hence, you are more eligible for a loan if you're younger.
Lenders do a background check on your current and previous employment. Salaried employees of recognised companies are seen as having more secure and stable jobs. Employees of medium and small businesses, start-ups, etc., are seen as having riskier jobs. Those with employment in more prominent companies often get better loan terms.
Work history also plays a vital role in eligibility. Salaried employees must show at least two years of full-time employment in the current profession. Self-employed individuals need to show at least five years of earnings. Stable employment shows the applicant's repayment capacity, and hence, they're given better loan terms. If applicants have employment gaps and multiple job changes, they're seen as having less stable jobs and lower repayment capacity.
Your credit score becomes necessary in any loan application process. Since a personal loan is unsecured, your credit score directly affects your loan terms. Your CIBIL score shows your creditworthiness by considering repayment and borrowing history. A high CIBIL score makes it easier for the lender to approve your loan. Having a credit score of around 750 is considered very good. Having a good credit score implies you've taken various loans and repaid them back promptly. Hence, applicants with better credit scores are less likely to default on payments and are often given better loan terms.
The more you earn, the higher your repayment capacity is. After taking a loan, the repayment is done through EMIs every month. All your EMIs should be less than 35% of your monthly income to be able to pay for other expenses.
Now that you know loan eligibility details, you can confidently apply for instant loan!