Anyone can need extra money, most of the times we are not able to anticipate expenses. A personal loan can be a savior for such situations.
A personal loan is a type of unsecured loan, so it also comes with a higher interest rate.
It is a very tricky situation to identify if we are eligible for a personal loan and till what limit. Though there are many institutes which help you to get loans easily. NBFC also provide the majority of personal loans.
The eligibility for a personal loan depends on the following factors:
Type of income
Salary of an individual/Income of an individual
Type of income:
A kind of income also plays a major role in getting a personal loan. Most of the banks prefer to give a personal loan to only salaried persons. There are also loans available for self-employed and professionals, but there would be additional documents required in most of the cases.
Salaried professional should have at least worked for 6 months in an organization before applying for a loan. Some of the banks/institutes prefer one year to two years of service.
In the case of self-employed professionals, there can be a requirement of three years of income tax returns.
The income of the individual:
Usually banks give loans with EMI not more than 50% of the salary.
A number of dependables in the family are also checked. The whole idea is to have smooth functioning of expenses while paying the installments.
There is also a check on how many current loans are active. This is also a major factor to decide the limit of the loan.
Credit Score & Repayment History:
The CIBIL score is a major factor to decide the creditability factor of the individual.
This also tells about the repayment history of the individual. It also explains about if any of the installments were skipped or paid in time.
Still, there are many other factors on which a bank can decide to give a particular loan. We are giving various combinations of how much maximum limit of personal loan an individual can avail.
Type of residence can be one of the major factors in deciding the overall limit of the loan. Some institutes anticipate a higher salary for eligibility for individuals staying in a rented house.
Estimated Eligibility of Loan at Different Interest Rates, Time Period and Income:
|Income||Interest Rate|| Duration|
|Expected Loan Limit Eligibility||Expected EMI|
**Considering no other EMI|
**This is an estimate to get an overview – each bank/NBFC might have their own norms for deciding maximum eligibility.
To get a complete detail you can use the following calculator – loan calculator – cibil
Apart from this there could be many regulations on how much and for how many months the loan would be sanctioned. It varies from 1 Lakh to 30 Lakhs with a time duration from 24 months to 60 months. The age limit also has a cap of 21 years to 60 years. Most of the banks have the higher cap of personal loan at the age of 58.