How to Improve Your Personal Loan Eligibility?

You have finally got the appraisal and are now ready to start with your MBA journey, but your personal loan application didn't go through. The reason? Maybe your eligibility is not strong enough.

This happens a lot more than you think, not because we can't repay, but because banks look at specific factors before approving loans.

The good news? With the right steps, you can strengthen your eligibility and never miss such opportunities again. So, let's understand how you can boost your personal loan eligibility in India.

What Are the Factors That Affect Your Personal Loan Eligibility?

Personal loans aren't backed by any collateral. So, banks and NBFCs look at much more than just your income. Before understanding how to improve your personal loan eligibility, let's look at some of the factors that influence your chances of approval -

Age

Most lenders offer personal loans to applicants between 21 and 58 years old. However, younger applicants have a higher chance of getting their loan approved than older ones because they have more earning years ahead. This makes them low-risk borrowers.

Monthly Income

Lenders always prefer an applicant whose repayment capability is strong. This is why a higher monthly income improves the chances of getting a personal loan.

Credit Score

Having a high credit score means you pay your debts on time, which helps you get a personal loan. But a low score means late payments, which makes you less likely to get the loan.

Work Experience

Your work experience not only defines your background but also demonstrates your income stability and reliability. So, the higher it is, the better.

Employment Stability

If you think your high monthly income can do the magic, you're mistaken. Lenders also see where you work to evaluate your job stability. If it's a reputed private firm or a government organization, it boosts your application.

Documentation

If you have all the papers the lender needs, like PAN card, Aadhaar card, pay slips, and income statements, you can get the loan. Missing papers can slow down or stop your application.

However, several NBFCs like Hero FinCorp offer a paperless personal loan application process to make the experience hassle-free.

Existing EMIs

Do you have multiple ongoing EMIs in your name? If yes, then it can reduce your chances of getting a personal loan. Lenders look for applicants with a debt-to-income ratio of 40%. If it's higher, your chances are lower.

Curious about your chances? Use our personal loan eligibility calculator and find out instantly.

5 Tips to Improve Your Chances of Getting a Personal Loan

If your personal loan application got rejected and you don't know why, here are a few tips. Follow them to strengthen your application and maximise your chances of getting the loan -

1. Maintain a Solid Credit Score

Your credit score can make or break your personal loan eligibility. So, strive to ensure it is at least above 750 by paying EMIs, credit card dues, etc., on time. A higher credit score portrays you as a responsible borrower, thus increasing the lender's confidence in you.

2. Opt for a Longer Tenure

You can opt for shorter loan tenures to pay less interest. While it might seem like a good idea, a longer repayment period actually lowers your monthly payments and decreases your debt-to-income ratio. This makes you look less risky to the lender.

3. Repay Existing Loans

Clearing existing debts has many advantages. For instance, it boosts your credit score, improves your creditworthiness, reduces your financial burden, and much more. So, settle all your existing loans before applying for a new one.

4. Avoid Multiple Loan Applications

Applying for several loans at the same time doesn't boost your chances of approval. Rather, it harms your credit score. So, only apply for one loan at one time.

5. Provide Accurate Details

Never make the mistake of exaggerating or understating details regarding your income, credit score, EMIs, etc. It can damage the lender's trust and lead to rejection. So, always maintain transparency and accuracy throughout the application process.

Got a strong profile? Check out our instant loan app to avail a personal loan without hassle!

Stronger Eligibility, Faster Approvals

Whether you need to finance an expensive vacation or pay your college fees, a personal loan can come in handy. If used responsibly, it can even save you from every unforeseen crisis, so you can live your life tension-free. The only catch? You need to qualify for it first.

Fortunately, there are various simple ways you can boost your eligibility to increase your chances of getting a personal loan.

And with Hero Fincorp, it's become easier than ever! Get quick, hassle-free personal loans of up to ₹5,00,000 in minutes. Apply for a personal loan with Hero Fincorp today!

Frequently Asked Questions

1. I'm 24 years old and have been working at an MNC for 2 years now. Can I get a personal loan?

Yes, you can get a personal loan. But ensure your credit score is 750 or above, and your source of income is stable, with at least 6 months of working experience with your current employer.

2. Do personal loans have fees?

Yes, personal loans usually come with fees such as processing charges, prepayment/foreclosure fees, late payment penalties, etc.

3. How much do I need to earn monthly to be eligible for a personal loan?

You need to have a minimum salary of ₹15,000 per month to be eligible for a personal loan.