Personal Loan Eligibility Criteria of Different Banks in India

Personal Loan Eligibility

You may be eligible for Personal Loan from one or more banks in India if you meet the following eligibility conditions:

• Age: Minimum 21 years and maximum 65 years.
• Loan Amount: Minimum 1 Lakh and maximum up to 50 Lakhs. However, for most banks 25 Lakhs is the upper limit on a Personal Loan. You may also come across banks that only offer a maximum Personal Loan amount that is 10-22 times that of your net monthly income.
• CIBIL Score: For most banks a high CIBIL Score is a must for lending a Personal Loan; usually, the ideal being a score of 700 or more.
• Net Monthly Income: A regular salary and flow of income is a must to get a Personal Loan easily. Most banks prefer at least 25,000 net monthly income of borrowers.
• Work Experience: Banks usually prefer a work experience with the current employer to be at least 1-3 years.
• Ongoing EMIs: Any ongoing equated monthly instalment (EMI) is a liability and a negative impact on your Personal Loan eligibility. It is always better to clear off existing loans before applying for another one.

Personal Loan Eligibility for Salaried

• Minimum age - 21 years at loan application
• Maximum age - 60 years at loan maturity
• Minimum Monthly income - 20,000
• Minimum work experience - 2 years continuous job
• ITR - Last 2 years ITR
• Credit score - 700 & above

Personal Loan Eligibility for Self-employed

• Minimum age - 25 years at loan application
• Maximum age - 65 years at loan maturity
• Minimum profit after tax - 2 Lakhs as per audited financials
• Minimum turnover - 40 Lakhs for non-professionals and 15 Lakhs for professionals, as per audited financials
• Minimum business stability experience - 3 years (in a profitable condition)
• ITR - Last 2 years ITR
• Credit score - 700 & above

Methods of Calculating Personal Loan Eligibility

There are two ways of calculating the Personal Loan eligibility:

• Multiplier Method: Under this method, the banks apply a multiplier to your net take home salary in order to calculate your Personal Loan amount eligibility. Higher the salary and reputed the company, higher is the multiplier and the loan eligibility.
• FOIR (Fixed Obligations to Income Ratio): Under this process, the Personal Loan amount eligibility is computed on the basis of maximum EMIs or monthly instalments you can pay with regard to the net income after accounting for all other fixed expenses like rent and EMIs. The FOIR percentage can vary from lender to lender and for high-income borrowers, this can be upto 65%.