Can I Get a Loan If I Stay in a PG or Rented Accommodation?

Rohit and Viraj both work for the same company in Chennai.
Rohit, a marketing intern, lives in a PG with his flatmates. Viraj, his manager, lives in his own flat with his family. Last week, both of them applied for a personal loan. But surprisingly, only Viraj got the credit. Any idea why?
Well, when you apply for a personal loan, lenders check many factors—and your accommodation type is one of them. But does it alone make or break the deal? Let's understand!

Does Living in a PG/Rented Accommodation Hurt Your Chances of Getting a Personal Loan?

While granting a personal loan, lenders don't ask for collateral. Rather, what they seek is trustworthiness, reliability, and stability. Living in a rented accommodation or a PG setup can raise concerns around each of these qualities. Here's how:

No address proof? Not trustworthy enough: Individuals who live in a PG/rented accommodation don't have solid permanent address proof. For lenders, this is a red flag as it makes recovery difficult in case of a default.

Rent to pay? Not quite reliable: Lenders critically assess your income and expenses to judge your repayment ability. If a chunk of your salary already goes toward rent, they may see you as less capable of handling EMIs.

Temporary accommodation? Instability alert: Anyone who lives in a PG/rented setup often moves regularly. To lenders, this is a sign of instability.

That said, there are still various other ways you can assure a lender of your trustworthiness, reliability, and stability to get a personal loan. We've discussed them later in this blog.

Did you know? Some lenders also monitor your socials and content consumption patterns to evaluate whether you're switching jobs or are looking for one. This helps them assess your stability.

What Else Matters to Lenders Before Sanctioning a Loan?

Although your accommodation type matters, it's not the only deciding factor. Here's a quick, 10-point checklist lenders follow to decide whether a person is eligible for a personal loan or not:

Disclaimer: The exact eligibility criteria for personal loans vary from lender to lender. The information above is just a guide, subject to change. Always ask your chosen lender about their requirements before applying.

Check your personal loan eligibility in minutes. Try our personal loan eligibility calculator now—it's free!

PG or Rent—Here's How You Can Still Get a Personal Loan

Don't let your living arrangement stop you. Follow these tips to enhance your profile and get a personal loan:

1. Boost Your Income

If lenders are satisfied with your repayment ability, they will most likely not reject your personal loan application - yes, even if you have hefty rent to bear every month. So, work on boosting your income: create passive revenue streams, take up side gigs for extra money - only the sky's the limit!

2. Work for a Reputed Company

When you stay in a temporary accommodation, who you're employed with matters more than usual. That's because it gives the impression of job stability and steady income to lenders. So, opt for a job at a government company or an esteemed MNC.

3. Gain Solid Work Experience

A major reason why lenders reject loan applications of applicants living in PG/rented settings is that they switch jobs too often. So, make sure you maintain a steady job track record. Avoiding switching 5-6 jobs within 2 years—it makes you a high-risk profile.

4. Improve Your Credit Score

A good credit score signifies that you pay your liabilities on time. So, minimize your chances of getting rejected by building a strong credit score. Ideally, target a credit score of 750+, but the higher, the better.

5. Get a Co-Signer

If you live in a PG or rented accommodation, having a co-signer with a strong profile can significantly boost your chances of loan approval. So, consider asking a parent, sibling, or spouse—but ensure their credit profile is solid.

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How You Stay Isn't Everything—Lenders See the Bigger Picture

The rumours are true—lenders do see where you live. But the good news? That's not all they see.

By maintaining a stable employment record, good credit score, and high income, you can easily bag a personal loan despite living in a PG/rented accommodation.

And with Hero Fincorp, the drill has become easier than ever! Get quick, hassle-free personal loans of up to ₹5,00,000 in just 10 minutes.

So, what are you waiting for? Apply for a personal loan with Hero Fincorp today!

Frequently Asked Questions

Q. Do I have to produce an address proof for getting a personal loan?

Yes, you almost always have to provide a valid address proof to your bank/NBFC for a personal loan. It's a part of their KYC verification process.

Q. Can Aadhaar be used as a valid address proof for a personal loan?

Yes, Aadhaar is widely accepted in India as a valid address proof for loans.

Q. Which address proof works best for PG/rented residents?

For PG/rented residents, the best address proofs are Aadhaar with updated address, a registered rent agreement, or a utility bill in your name.

Disclaimer: The information provided in this blog post is intended for informational purposes only. The content is based on research and opinions available at the time of writing. While we strive to ensure accuracy, we do not claim to be exhaustive or definitive. Readers are advised to independently verify any details mentioned here, such as specifications, features, and availability, before making any decisions. Hero FinCorp does not take responsibility for any discrepancies, inaccuracies, or changes that may occur after the publication of this blog. The choice to rely on the information presented Here is at the reader's discretion, and we recommend consulting official sources and experts for the most up-to-date and accurate information about the featured products.