Qualifying for a Personal Loan of Rs 25 Lakh: Requirements and Eligibility Criteria

A Personal Loan is an unsecured loan which doesn't require any security or collateral, and the availed loan amount can be used for any purpose except speculation. There is no specification about the end use of the loan amount for personal or business use. Lenders offer instant Personal Loans to meet sudden money requirements, like grabbing short-term opportunities in business or overcoming a medical emergency. The loan amount can be up to Rs 25 lakh with reputable lenders. You can easily repay such a high loan amount in a flexible repayment tenure between 12-60 months. To offer a Personal Loan of Rs 25 lakh, lenders need individuals to meet their eligibility criteria and produce the necessary documents.

This guide will define Personal Loan eligibility criteria and documents to be submitted to the lender.

Eligibility Criteria for a Personal Loan

Lenders are mainly concerned about checking whether the borrower can repay the loan within the stipulated tenure. Therefore, they set eligibility criteria for the applicant's income, employment, business, and other factors. It helps them to assess the risk involved in lending to an individual.

For more clarity on loan eligibility criteria, customers can seek guidance from a Personal Loan agent in Noida or other cities in India online or offline.

Eligibility parameters are defined below:

• Employment and Income: The minimum salary requirement for salaried individuals is at least Rs 20,000 for Delhi and Mumbai residents and Rs 25,000 for residents of other Indian states. Since there is no collateral to cover the credit risk, lenders face a higher risk on unsecured Personal Loans as compared to secured loans. They assess the borrower's income stability with this minimum limit and try to mitigate the default risk. For self-employed borrowers, the income requirement depends on the industry they belong to.

• Age limit: The minimum age at the time of application should be 21 years, and the maximum age at the tenure end should be 60 years. Applicants closer to retirement may need to go through additional scrutiny to get a Personal Loan, as lenders need to evaluate loan repayment capacity during retirement. Younger borrowers can quickly get a Personal Loan of a high amount as they have enough time to earn and repay the loan.

• Work Experience: Applicants should have at least one-year work experience.

• Credit Score: A credit score represents the borrower's creditworthiness and helps the lender to understand their financial behaviour considering credit history. Lenders prefer a borrower with an excellent credit score (750 or above) to approve a Personal Loan. It indicates high creditworthiness.

Borrowers should check their Personal Loan eligibility before making an application with the lender. Customers can seek guidance from a Personal Loan agent in Noida or other cities or utilise an online Personal Loan Eligibility calculator available for free at the lender's official website.

Required Documents for a Personal Loan

A Personal Loan can be accessed with minimal paperwork or documentation online. Lenders ask for a set of documents to provide Personal Loans to authenticate the borrower's legal identity in the country. Customers should get ready with the following list of required documents while making an online loan application:

• Identity Proof - Aadhaar Card, Driving License, Passport, Voter ID, etc.
• Residence Proof - Passport copy, Aadhaar Card, Driving License, Voter ID, etc.
• Signature Proof
• Past six months' Bank Account statements

In the case of salaried employees, the documentation required is as follows:

• Previous three months' salary slips
• Income Tax Returns (ITRs) OR Form 16

For self-employed borrowers, the documentation required is as follows:

• ITR, Balance sheet and Profit and Loss statement for the last 2 years
• Licence, Registration Certificate, or GST number to prove business continuity
• Clearance Certificate or IT Assessment
• TDS Certificate (Form 16A) or Form 26 AS for income declared in ITR or Income Tax Challans

Conclusion

A Personal Loan is an effective debt option in varied financial circumstances and needs. It is important to meet the eligibility criteria for a Personal Loan of Rs 25 lakh. However, meeting the eligibility criteria doesn't guarantee loan approval. Lenders also consider their internal policies, borrower's financial behaviour, and other factors to finalise a loan sanction. Thus, support your Personal Loan application with all the necessary documents.