A personal loan of ₹1 lakh is a finance product, usually made available quickly in large sums, for meeting various needs: medical emergencies, weddings, education, travel, home renovations, etc. Personal loans are unsecured loans- no collateral is required. The lender carefully checks the applicant’s financial stability, creditworthiness, and repayment capacity before disbursing the loan. Here’s a general list of eligibility requirements for availing a personal loan of ₹1 lakh in India:
Age Criteria
Lenders normally demand applicants to be within a particular age bracket:
Minimum age: 21 years; however, lenders vary for some at 18 years.
Maximum age: Salaried people up to 60 years, and self-employed people can go up to 65 years.
This gives enough time in terms of working years or stable income to meet the repayment of the loan in the tenure.
Employment Type and Stability
Employees: Employees earning a fixed salary through private or government sources should be carrying out employment in a consistent and steady job. Most lenders require the borrower to have held his/her present job for at least 6-12 months.
Proprietors: Entrepreneurs, businessmen and freelance professionals should prove a steady flow of income from business incomes, contracts or professional earnings. A business that has been in existence for 2-3 years is generally preferred.
Stable employment or business operations is seen by lenders as a reliable indicator of repayment capacity.
Minimum Income Conditions
For repayment capability, lenders insist on a minimum monthly income as follows:
For salaried persons in good jobs: ₹15,000 to ₹25,000; lender to lender and city to city.
For self-employed persons in good businesses: The income level will vary. Here, the emphasis will be more on consistent profitability.
Applicants of metropolitan cities face higher income requirements due to the cost of living in those cities.
Credit Score
A credit score is one of the most crucial determinants of loan eligibility for an instant personal loan. Scores ranging from 750 and above (on a scale of 900) are considered good, though some lenders allow extending loans to individuals in the score range of 650–749. The exact convenience of getting a loan arises with a perfect credit score profile. It reflects a history of on-time repayments and overall responsible credit behaviour.
Debt-to-Income Ratio
The debt-to-income (DTI) ratio is the percentage of monthly income utilized for existing loan repayments. Lenders look for borrowers with a DTI below 40-50% so that the borrower can take care of the new loan’s EMIs.
Documentation
The following documents must be submitted by the applicants:
Identity proof: Aadhaar, PAN, Voter ID, or Passport.
Address proof: Utility bills, rental agreement, or government ID.
Income proof: Salary slips, bank statements, or ITR.
Evidence of employment: Letter from employer and/or employing authority, for salaried employees; incorporation documents for proprietors/professionals.
The lender is interested in the existing obligations, such as EMIs on other loans or regular payments on credit cards. Significant obligations can negate the application of the new loan.
The eligibility for a personal loan of ₹1 lakh varies from lender to lender, but fulfilling the above criteria can enhance the chances of getting approved. Before applying, borrowers should compare interest rates, study their credit score, and position to repay.
