Last Updated on July 19, 2023 by hassan abbas
Time and again, Personal Loans have proven to be the one-stop solution for all your crucial financial requirements. Gone are those days when people hesitated to apply for a personal loan for unplanned expenses. Whether you require funds for a wedding in your family, an overseas vacation, your child’s education, paying off a pending debt, home renovation, buying an electronic product, or a medical emergency requires one solution, i.e., a Personal Loan.
Personal Loans for salaried employees are approved more easily than other applicants for various reasons – monthly salary being one of them. Let us see some of the key reasons to understand better.
What is a Personal Loan?
A Personal Loan is an unsecured loan that does not require a guarantee or collateral. A personal loan is approved with minimal paperwork online. It can be used for almost every personal need. The borrower can repay the loan to the lender as per the agreed tenure and interest rate. While anyone can apply for a personal loan, the approval is based on the lender’s eligibility criteria.
How different is a Personal Loan for salaried and others?
During approval, Personal loans for salaried applicants get priority over other applicants.
Before sanctioning an unsecured loan, lending institutions like to ensure that the borrower can repay the loan. With income stability, the employed loan applicant has a better chance of qualifying for an instant loan. However, students and self-employed may find it challenging to get quick approval for a Personal Loan.
What factors play a major role in easing the approval process of Personal loans for salaried employees?
- Monthly Income and Annual Income
One of the mandatory requirements before personal loan approval is salary slips or pay slips which validate your employment and act as an important tool for loan approval. A minimum monthly salary of Rs 20,000-25,000 (depending on your city) is required to eligible for a personal loan.
- Organization’s Reputation
While evaluating an applicant’s eligibility, the reputation of their employing firm and employment duration is verified and validated. Better the reputation, the better will be the rate of interest. Apart from this, your stability in the organization also gets considered. If you are a frequent job hopper, chances of loan approval reduce as lenders feel you are a risky borrower.
- Outstanding Debts
One of the primary tasks before applying for a personal loan is clearing off your old debts, which increases your credibility and creates an easy path for new loan approval. In addition, make sure your monthly expenses are less than your monthly income.
- CIBIL Score or Credit Score
CIBIL score is a 3-digit number that sums up your credit history, rating, and report that ranges from 300 to 900. The higher the score, the better the credit history. This is one of the major deciding factors of personal loan approval. A score of 750 or above is highly advantageous. A healthy score can be maintained by paying your credit card bills on time and promptly repaying monthly loan installments.
- Limiting the Frequency of Loan Applications
Financial institutions and NBFCs review your financial history before approving a loan application. However, if many loans are applied for within a short time, it forms a negative impression, and the loan application may get rejected. So, avoid applying for multiple loans simultaneously.
- All Income Disclosure
Applying loan is more like marketing your creditworthiness by all possible means. Apart from disclosing your main income, showing your side income and additional income on all forms gives your application more weightage. This includes variable pay, incentives, and income from hobbies to enhance your eligibility.
- Lender Relations
A healthy relationship with the lender can be beneficial. Repaying any loan with the same lender (if any) on time is one of the ways to get the benefit in terms of quick approval and low-interest rates.
- Age Range
Typically, the lesser the age, the more the chances of loan approval. It is just the calculation of repayment capacity. For personal loans, you should be between 21 and 65 years.
Now that you know the reasons behind the easy approval of Personal Loans for salaried employees, you can apply online with reputed lenders like Fullerton India. Remember to go through all the repayment clauses, mainly the tenure and rate of interest. Furthermore, once your loan is approved, make sure you repay the loan promptly and increase your credibility with the lender.
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