Personal Loan Eligibility & Documents Required
Published on : February 28, 2024

Personal loans are unsecured loans for specific purposes such as debt reduction, home upgrades, weddings, vacations, education, and medical bills. It’s important to realize that a personal loan’s flexibility lets borrowers allocate their funds according to their individual financial objectives.

This flexible financial tool offers a practical and affordable solution for a variety of individual needs. To get a personal loan online, you must meet the eligibility criteria set by lenders. You must also have the required documentation to apply for a personal loan.

Here we will understand the eligibility criteria and documents required for a personal loan so that you can apply online hassle-free.

Personal Loan Eligibility

If you are in need of urgent funds, a personal loan can be a helpful tool. To apply for a personal loan, you will have to fulfill the following eligibility criteria.

  • Nationality – Borrower should be an Indian citizen
  • Age – The minimum age of the applicant must be 21 years
  • Employment – Applicant should be employed with any public, private or LLP
  • Work Experience – Candidate must have in their current role for a year least
  • Income – The minimum income of the applicant must be ₹30000
  • Credit Score – A credit score of 700 or higher is typically required by lenders in order to be approved for a personal loan.

Personal Loan Documents

Below is the list of personal loan documents that applicants will require to apply for a personal loan.

Identity Proof

  • PAN card
  • Aadhaar card
  • Driving License

Address Proof

  • Electricity bill, rent agreement or Indian passport

Income proof

  • Latest salary slip from the current employer

Bank account statement

  • Original bank statement for the last three months in PDF format

Employment proof

  • Offer letter
  • Monthly salary slip
  • Copy of the employment contract

Factors that determine Personal Loan Eligibility


Applicants over 21 years of age are eligible to apply. However, borrowers who are over 55 years old should have a co-applicant.

Monthly Income

A consistent monthly income is a prerequisite for being eligible for a personal loan. To make sure the borrower has the resources to repay the loan, lenders check the borrower’s income. Higher salaries could make borrowers more qualified and possibly enable higher loan amounts.

Credit History

A person’s credit history indicates their creditworthiness and ability to handle finances. In order to evaluate the borrower’s repayment history, lenders carefully review credit ratings. While a low credit score might lead to rejections or higher personal loan interest rates, a good credit history increases eligibility.

Work Experience

An applicant’s profile usually gains credibility when they have a stable employment history. A consistent source of income is indicated by stable employment, which lowers the perceived risk for lenders. A minimum amount of work experience may be required by some institutions in order to approve a loan.

Existing Debts

The borrower’s current financial obligations, including any outstanding loans or credit card debt, are assessed by the lender. High amounts of current debt may prevent a borrower from becoming eligible since it raises questions about their capacity to handle further debt.

How to Improve Personal Loan Eligibility?

Maintain a High Credit Score

An excellent credit score greatly increases one’s eligibility for a personal loan. Paying off current debts on time, including credit card payments and EMIs, has a beneficial impact on your credit score., Monitor your credit report and take quick action to resolve any inconsistencies.

Increase Your Income

Your salary is a deciding factor for lenders. Consider ways to earn more money, such as asking for a pay rise, accepting additional work, or looking into extra revenue streams. Your ability to repay debt is enhanced by a steady stream of income.

Reduce Debt-to-Income Ratio

Your eligibility for a personal loan is improved if you have a lower debt-to-income ratio. Prior to applying for a new loan, try to pay off your current debts, especially any high-interest ones. This shows sound financial judgement and improves your capacity to handle further debt.

Avoid Multiple Loan Applications

If you apply for several loans in a short period of time, lenders may view it negatively, as it makes you appear credit-hungry to them and also affects your credit score. Rather, do thorough research and select the best loan alternative before applying to ensure a focused and informed approach.

Track Your FOIR (Fixed-Obligation-to-Income Ratio)

The percentage of your income that is allocated to fixed costs, such as rent, loan EMIs and other monthly commitments, is known as FOIR. Lenders assess eligibility by looking at what portion of your income goes into monthly obligations. Manage your current responsibilities well to keep your FOIR within acceptable limits.


A smooth borrowing experience depends on understanding the nuances of personal loan eligibility and the necessary paperwork. By managing factors such as earnings, credit history, employment history, and outstanding debts, candidates can strengthen their financial position.

Meanwhile, being aware of the required documents can ensure a faster application procedure. Borrowers can improve their eligibility by optimizing income, monitoring credit ratings proactively, and handling existing debts prudently.

Remember that a knowledgeable strategy not only guarantees loan approval but also creates opportunities for favourable conditions, enabling borrowers to fulfil their financial goals.


What information do I need to use the personal loan EMI calculator?

Ans: The loan amount, interest rate, and tenure must be entered into the personal loan EMI calculator. In order to generate a more precise estimate, some calculators may also need a processing charge.

How does my credit score impact my personal loan eligibility?

Ans: A better credit score enhances eligibility. Aim for a high credit score through appropriate credit management and on-time payments.

Can self-employed individuals apply for personal loans?

Ans: Yes, a lot of lenders serve professionals who work for themselves. Additional documentation, such as income tax returns and firm financials, may be needed.

What documents are generally required for personal loan applications?

Ans. Documents proving identity, address, income, and bank account balances are usually required. Employment proof may require additional documents.

Does a higher income guarantee personal loan approval?

Ans. Although having a higher salary increases one’s eligibility, lenders also take credit history and current debts into account.