Personal Loan Eligibility Criteria

Apply for a personal loan

Thinking about applying for a personal loan? Before you proceed, it's essential to understand the eligibility criteria to ensure a smooth approval process.

Key Takeaways

• Personal Loan can be availed without pledging any collateral
• A good credit score can increase the chances of getting your application approved
• For Personal Loan eligibility criteria, KYC documents and proof of income are mandatory for all applications
• The upper limit of a Personal Loan can vary by banks as well as applicants
• You can use Personal Loan eligibility calculators to gauge if you are eligible for the loan.

What is a Personal Loan?

A Personal Loan provides quick access to funds, helping you cover urgent expenses like medical bills, travel, or wedding costs—without the need for collateral. It can be a lifesaver when you need immediate cash with minimal hassle. Since a personal loan does not require you to pledge any assets, it is classified as an unsecured loan. However, banks approve this loan only for borrowers who meet their eligibility criteria. Read on to learn more about personal loan eligibility requirements.

Personal Loan eligibility criteria

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There are some basic eligibility⁽¹⁾ criteria for Personal Loans that you need to meet to avail of the benefits. The eligibility criteria is different for salaried and self-employed individuals.

Personal loan eligibility for salaried employees

As a salaried employee looking for a personal loan, you should be:

• A Resident Indian
• Be at least 21 years old at the time of loan application and not older than 60 at the time of final EMI repayment.
• Have a minimum monthly salary of INR 25,000 (this may vary by lender).

Personal loan eligibility for self-employed individuals

Self-employed professionals, such as doctors and chartered accountants, can apply for a personal loan if they meet the required eligibility criteria. These individuals should:

• A Resident Indian
• Be in the age bracket of 21 to 60 years.
• Be able to show an annual profit of INR 3 lakh after tax for the previous financial year.
• Have at least a one-year prior relationship with the lender.

The Personal Loan eligibility criteria, mentioned above, are indicative and may differ from one lender to another.

Documentation

A Personal Loan is one of the easiest to procure. So long as you can show that you fit the eligibility criteria for Personal Loan, as set by the lender, your loan can be processed in the quickest time possible. The loan disbursal process is completed with minimal documentation. Generally, it takes 24 hours and at most 72 hours for the disbursal of the loan in your savings account. If you apply for the loan online, you only need to provide scanned soft copies of your documents, based on your employment status.

Documents needed from salaried applicants

• A copy of your PAN Card
• A copy of your ID proof document which can be your PAN, Aadhaar, Passport, Voter's ID, etc.
• A copy of your residence proof document which can be your rent agreement, utility bills, passport, Aadhaar, etc.
• Bank statements for the last 3 months
• Pay slips for 3 months
• 2 passport size photographs

Documents needed from self-employed applicants

• A copy of your PAN Card
• A copy of your ID proof document which can be your PAN, Aadhaar, Passport, Voter's ID, etc.
• A copy of your residence proof document which can be your rent agreement, utility bills, passport, Aadhaar, etc.
• Income proof documents for the last three financial years
• Documents proving your office address and Proof of continuity of business
• 2 passport size photographs

The upper limit of a Personal Loan

Wondering how much you can borrow? Your maximum loan amount depends on the lender and your financial profile. This amount typically varies from lender to lender. For instance, most banks offer a maximum of INR 50 Lakhs in personal loans, whereas NBFCs may offer a smaller amount. Also, for high-value loans (those exceeding INR 5 Lakhs), the lender may even insist on collateral.

Conclusion

Due to features like basic eligibility criteria, minimal paperwork, and instant loan disbursal, a personal loan is an excellent facility that comes in handy during a time of crisis. Before applying, check your eligibility using our personal loan eligibility calculator to determine your maximum loan amount and interest rate. Take the next step towards hassle-free financing today!

Download the digibank mobile app on your smartphone. Launch the app and click on the "Get Personal Loan" link on the login page

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*Disclaimer: This article is for information only. We recommend you get in touch with your income tax advisor or CA for expert advice.