How Much Income Do You Need to Qualify for a Personal Loan?

Nowadays, people have multiple choices if they want money instantly to tide over immediate financial requirements. Instant personal loans are arguably the most popular choice for most Indians today. A Saral Credit report has already illustrated how 67% of Indians have taken these loans at least once to meet varying financial needs. These loans are easy to get and do not require much paperwork while being processed and disbursed instantly through the official websites or apps of lenders. However, as with every loan, there are some eligibility criteria that you have to meet, including your minimum monthly income. Let us find out more about it in this article.

What is the Minimum Income Requirement for Personal Loans?

You should meet the lender’s eligibility criteria before you apply for instant personal loans. Every lender stipulates a minimum monthly income for borrowers to be eligible to take loans. This varies from one bank to another although it is usually around Rs. 20,000 per month or Rs. 2,40,000 annually. Many banks mandate higher amounts, ranging from Rs. 25-30,000, particularly for residents of metro or Tier-1 cities. You should check this aspect carefully before applying.

Other Eligibility Guidelines at Banks

There are some other eligibility criteria that you should also fulfill to obtain an instant personal loan. They usually include:

• Age Limit- It is usually between 23-55 years of age, although some banks have lower (18 years onwards) and higher (up to 60 or 65 years) limits.
• CIBIL Score- You will need a minimum CIBIL score of 675 or higher to qualify for a personal loan, while some banks may require anything above 700 or even 750. Since personal loans are unsecured loans, i.e. they do not require any collateral, the credit score and overall credit history of the borrower are doubly important for lenders.
• Employment Nature/Employer- Some financial institutions like small finance banks may also look at the nature of employment, i.e. whether you are salaried or self-employed and the organization you work for. In some cases, working for a reputable corporate or Government entity may help you get a personal loan more easily.

Now that you know about the income requirement and other eligibility criteria, it is time to keep a few essential tips in mind before applying for an instant personal loan.

Vital Tips While Applying for Instant Personal Loans

Here are a few things to remember while applying for these loans.

• Compare interest rates across multiple lenders for your desired amount and choose the one that is the lowest. This will help you save more money throughout the loan tenure.
• The duration of the loan should be chosen carefully. Most lenders and online loan apps offer loans up to 24-36 months, while some have loan tenures up to 60 months. In an ideal scenario, opt for a convenient tenure that allows you to comfortably repay the monthly EMIs. Remember that the longer your loan tenure, the higher your total interest costs.
• Check processing fees and other statutory loan charges since they add to your total expenditure on the loan.
• Only apply for the amount that you need. Resist the temptation to borrow a higher amount just because you are eligible for the same.
• Ensure you have a high CIBIL score and sufficient monthly income before applying. Check your eligibility online and also work out the monthly EMI that you will have to pay in the future. This will help you plan your finances better.

Conclusion

Once you know all these details, you can make an informed decision while applying for an instant personal loan. Have a proper repayment plan in place and ensure that you clear the monthly EMIs before their due date to maintain a high CIBIL score.