Eligibility Criteria and Documents Required To Apply For A Personal Loan
Published on : April 18, 2023

In today’s world, a personal loan can be an incredibly useful financial tool for individuals who need funds to meet their expenses. However, before applying for a personal loan, it’s crucial to understand the eligibility criteria and the required documents for the application process. Meeting the eligibility criteria and providing the necessary documents can increase the chances of loan approval and ensure a smooth loan application process. In this article, we will tell you everything about the eligibility criteria and documents required to apply for a personal loan.

What is a personal loan?

A personal loan allows individuals to borrow a sum of money for various purposes, including debt consolidation, home improvements, or financing a wedding. Personal loans are commonly provided by banks, credit unions, or online lenders and must be repaid with interest over time. It’s important to note that some lenders may also levy fees for personal loans.

The Impact of Incomplete Document Submission on Personal Loan Approval

Failing to meet the eligibility criteria or provide the necessary documents can lead to loan rejection or delays in the loan application process. It can also affect the interest rates and loan amount the lender offers. Therefore, it is essential to carefully review the eligibility criteria and document requirements before applying for a personal loan and ensure that all necessary documents are in order. By adhering to these guidelines, applicants can improve their likelihood of obtaining approval for a personal loan and securing the necessary funds to meet their financial obligations.

Eligibility Criteria

To be eligible for a personal loan, specific criteria must be met. These include:

Applicant age

At the time of loan application, the applicant’s age must be between 22 and 58 years, which is the maximum age allowed at the time of loan maturity.

Work experience

The applicant must have a minimum work experience of one year with at least two months of stability with the current employer.

Income

The applicant must have a minimum net monthly salary of Rs. 20,000.

Employer category

The applicant should be a full-time employee with a company, private or public limited corporation, or LLP.

Citizenship

Personal loans are only available to Indian citizens.

Credit score

Most lenders require a minimum credit score of 650 or above to be approved for a personal loan. To improve their credit score, individuals should make timely repayments on existing loans, maintain a low credit utilisation ratio, and avoid defaulting on payments.

Meeting these eligibility criteria can increase the likelihood of loan approval and ensure a successful personal loan application.

Documents Required

Having all the necessary documents is crucial to ensure a smooth application process when applying for a personal loan. This is a list of documents that are typically required to apply for a personal loan:

Documents Required for Salaried Employees

Photo Identity ProofPassportVoter’s ID PAN CardDriving Licence Aadhar Card
Residence Proof PassportAadhar CardUtility BillRation CardDriving Licence 
Proof Of Ownership Of Residence  Property DocumentsElectricity BillMaintenance bill
Income Proof Salary Slips for last 3 months along with Form 16Bank Statement for previous 6 months where the salary has been credited
Proof of Job Continuity Employee certificate from current employerCertificate of experience Appointment letter from current employer (if the employment period exceeds two years)
Proof of Investment Fixed deposits, shares, fixed assets, mutual funds, etc
Photograph 1 Passport size photograph

Documents Required for Self-Employed Individuals

Photo Identity ProofPassportVoter’s ID PAN CardDriving Licence Aadhar Card
Residence Proof PassportAadhar CardUtility BillRation CardDriving Licence 
Proof Of Ownership Of Residence  Property DocumentsElectricity BillMaintenance bill
Income Proof Salary Slips for last 3 months along with Form 16Bank Statement for previous 6 months where the salary has been credited
Proof of Job Continuity Employee certificate from current employerCertificate of experience Appointment letter from current employer (if the employment period exceeds two years)
Proof of Investment Fixed deposits, shares, fixed assets, mutual funds, etc
Photograph 1 Passport size photograph

List Of Documents For NRI Applicants

Identity Proof Copy of your passportCopy of your visa
Employment Proof Appointment Letter Job Contract Identity/Labour Card (if Applicable)Official email ID or HR email ID 
Income Proof Bank statement of last 6 months Salary slips/Salary certificate 
Photograph Recent passport size photograph

List of Documents Required for Pensioners

Proof of Identity/Age (Any One)Ration Card PAN cardVoter ID PassportDriving LicenceSchool Leaving CertificateBirth Certificate
Proof of Address (Any one)Aadhar CardPassportRation CardUtility BillsDriving Licence
Income ProofBank Pass-bookBank Statement of Last 6 MonthsForm 16Income tax ReturnsCopy of pension payment order 
PhotographRecent passport size photograph

Conclusion

Applying for a personal loan can be a great financial option for those who need funds to cover personal expenses, consolidate debt, or address a liquidity crunch. However, meeting the eligibility criteria and providing the necessary documents is vital to ensure a smooth loan application process and increase the chances of loan approval. It is crucial to carefully review the eligibility criteria and required documents before applying for a loan. By preparing the documents correctly individuals can increase their chances of securing a personal loan that meets their financial needs.