Personal loans are the most versatile loans ever! They can help you through all major financial needs as and when they come to you. This financing option is collateral free which means lending institutions are not obligated to ask for collateral or security against the loan money. This is the reason why these loans have a relatively high rate of interest compared to other forms of loans.
Personal loans can be conveniently used under all tight situations with the assurance to provide a quick transfer of money. This ‘go to’ option helps to meet the unpredictability of life & money. The versatility talks for itself by using personal loans for different categories like higher education, wedding expenses, medical conditions, etc.
As per Reserve Bank of India, total personal loans have significantly increased in the last few years. The figures have touched a whopping 19.33 lakh crores as compare to 5.89 lakh crores in the year 2018. This is mainly based on the collateral free aspect of personal loans which make it so desirable.
How much Personal Loans are you eligible for?
When you’re thinking of taking a personal loan, the first question which pops up is how much loan amount can you get? Apart from the maximum limit for personal loans offered by the lending company, there are other factors which are significant for use.
Typically, the eligibility criteria for salaried and self-employed individuals are quite alike.
Here is the eligibility criteria for Instant Personal Loan commonly used by lenders:
- The potential borrower must provide his/her proof of identity like PAN Card, Passport, etc
- He/she must have active net-banking for existing bank account
- The borrower must be an Indian citizen, residing in India aged between 18-45 years age.
- The minimum income should be at least Rs.10,000-Rs. 15,000 every month.
- The interested borrower must have a valid residence proof to furnish along with the loan application.
Obviously your income cannot get you a higher personal loan amount, greater than your salary. So, keep check of a good mix of factors to qualify for a loan.
Here are other significant points to remember besides your monthly income:
- Go directly to the lender, bypassing a middleman
- Maintain a good credit score, preferably above 700
Ofcourse, the amount of sanctioned personal loan depends on the lenders terms & conditions. However, a Home Credit loan can get you upto Rs.2,00,000. Your chosen lender will look into your income source and its estimated growth in the years to come. Usually, your lender will enable you to pay loan EMIs upto 50-60% of your monthly income minus all deductions. This is an effort to reduce payment defaults.
These criteria are set out by the lenders before giving out loans.
However, as a tip keep your credit score under check & better it as and when you can. Go back in time & think about your past defaults which may have impacted your eligibility for future borrowings, its tenure & interest rate.
How can you check your eligibility for a Personal Loan?
The eligibility criteria changes from one lender to another. But the general criteria has already been discussed. Based on all the factors, the maximum loan limit is determined.
You can also take an EMI estimate using an online EMI calculator to find out how much loan can you actually get & the available options in the financial sector.