Personal Loan Eligibility: 6 Amazing Ways to Improve | 2022


29 Mar 2021 | 5 min read

Musing to avail of a Personal Loan? Do you know whether you’re eligible for it or not? Moneylenders have their set eligibility requirements, and your Personal Loan application will only be approved if they find you eligible for the loan as per those requirements. 

Regardless of the need, be it a medical contingency in your family, wedding, vacation, education of children, or something as simple as acquiring an electronic appliance or gadget, a Personal Loan is a great option facilitating to manage a number of emergencies and non-emergency expenses. 

But a bit like all the opposite types of loans, a Personal Loan also needs you to qualify the eligibility requirements of the lender. While the eligibility criteria can differ between moneylenders, there are a few requirements that every lender would ask you to meet to approve your loan application. Here are the top 6 amazing ways to improve your personal loan eligibility that you can apply in 2022 and ahead! 

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1. Maintain a positive repayment history and high credit score 

One of the several Personal Loan eligibility criteria is the repayment history of the loan applicant. The repayment history of the borrowers is recorded by means of their credit reports. Thus, if you're musing about availing of a Personal Loan, confirm that you simply possess a positive repayment history. 

By making EMI payments on time, you will be able to build a positive repayment history successfully. If you miss on paying even a single EMI, it might put an impact on your credit report, thus hurting your credit score. 

The credit score plays a vital role in choosing whether your loan will get approval or not. A credit score is a number that determines your repayment capability. Typically, a credit score of 700 or over that is typically considered good. A good credit score will not only improve your chances for approval but also facilitate you in attaining a relatively higher loan amount at a reduced interest rate. 

2. Pick longer tenure for repayment 

Choosing a personal loan with extended tenure helps you to pay off it seamlessly across a period of your time. This enhances the odds of repayment of the Personal Loan on time, consequently, mitigating the danger for the moneylender. 

At Afinoz too, we offer personal loans with longer tenure that ranges up to 6 years. Furthermore, with the assistance of our Personal Loan EMI calculator online, you will be able to compute your monthly installments beforehand. This assists you to manage your finances wisely, as a consequence, you can pay off the loan amount within the stipulated period of time. 

3. Pay off all the existing loans 

Before you apply for a Personal Loan, try to make sure that you do not hold other loan repayments. If you already possess loans, then the moneylenders may consider you as a risky applicant. This will hamper the odds of your approval. Thus, it is always recommended to repay all your existing loans prior to applying for a fresh Personal Loan. 

4. Alternative Income Source 

Moneylenders always check your income prior to approving your application. Furthermore, having another income source can enhance your Personal Loan eligibility. This alternative income can from various ways. E.g., if you own any property and getting rent from it, you can show it as an extra income. 

If you've got a working spouse, you can consider applying for a Personal Loan with a co-applicant so as to power up your Personal Loan eligibility. Taking out a Personal Loan with a co-applicant also reduces the liabilities of repaying the loan. 

Additionally, you are required to render an updated record of your variable pay while applying for a Personal Loan. Variable pay is an advantage offered by most employers within the sort of bonuses, incentives, or commissions. Some moneylenders take this record into consideration account while deciding your Personal Loan eligibility. 

5. Pay timely credit card bills 

If you hold multiple credit cards, confirm that you simply pay your bills timely. This may not only facilitate you get rid of a debt trap but also reflect that you are financially disciplined. Therefore, financial institutions may take you into consideration as an applicant with low-risk while assessing your Personal Loan application, which can improve the approval odds of your application. 

6. Don’t apply for multiple loans simultaneously 

When you apply for a Personal Loan, moneylenders raise an inquiry with a credit agency to evaluate your default risk. Such inquiries stand out to be hard inquiries and are taken into the records of your credit report. 

This causes you to a high-risk applicant and lenders may consider rejecting your application. Thereby, it is recommended to check on various loan offers’ eligibility criteria of different financial institutions before applying for a Personal Loan. You can also make use of a personal loan eligibility calculator to see loan eligibility online and apply for a loan that matches your requirements. 

Furthermore, you can also take into account applying for a Personal Loan with a moneylender that has minimum Personal Loan eligibility criteria. This may subsequently boost your odds of getting approval on your application. 

Factors affecting personal loan eligibility  

A personal loan is a type of unsecured loan that can be used to cover a wide range of expenses. This loan carries a higher risk for lenders than a secured loan because no collateral is required. When determining a prospective borrower's eligibility for a personal loan, a lender takes into account a number of variables. 

  • Credit score: This is a three-digit number that summarises how you have managed credit card and personal loan repayments in the past. Credit bureaus calculate this score, which varies from 300 to 900. Your chances of being approved for a new personal loan increase when your credit score approaches 900. 
  • Employer type and employer reputation: Banks typically give personal loans to salaried professionals working in private, government, or international enterprises, as well as self-employed persons and professionals such as businessmen, CAs (chartered accountants), doctors, architects, and other professions.  
  • Age: Individuals between the ages of 21 and 60 are eligible for personal loans from most institutions. While older people may be eligible for a personal loan such as a pension loan, there are some restrictions on the amount of money that can be borrowed. 
  • Minimum monthly income: For salaried professionals, most banks require a minimum monthly income of Rs. 15,000 as a criterion. Individuals must have a minimum monthly income of Rs. 25,000, however, are favored by banks. A gross yearly income of a minimum of Rs. 5 lakh is normally required for self-employed individuals to qualify for a personal loan. 
  • Work/business experience: To qualify for a personal loan, many banks need paid workers to have a cumulative work experience of two years, with at least six months in the present organization. In order to be eligible for an unsecured personal loan, self-employed persons and professionals must have been in their current business for at least two years. 

The Bottom Line 

Personal Loan eligibility is the foremost thing that you should consider as it is all that decides and affects your credit profile. The aforementioned tips are the top 6 ones among many ways to improve your chances of meeting the eligibility criteria of personal loans of different lenders. 

Moreover, you can avail of a personal loan from Afinoz at the lowest rate of interest. You don’t just get the assured lowest interest rate but also you get the feature of comparing multiple personal loan offers of different lenders. 

The personal loans offer that we render meant to supply a simple solution for all of your financial requirements. We offer you to apply from the comfort of your range in a hassle-free manner. 

Additionally, if your CIBIL score is low and you are willing to enhance it, read out our certain blog on amazing ways to improve your credit score.  

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