What are the eligibility criteria for obtaining a loan?

When applying for a loan from banks and NBFCs (Non-Banking Financial Companies), applicants need to meet certain eligibility criteria. Here are the key factors that are considered:

• Income Proof: Applicants need to provide documents to verify their income, such as salary slips, bank statements, Income Tax Returns (ITRs), etc. A stable and adequate monthly income is required to get approval for a loan.
• Employment: Loan providers prefer to be employed with a reputed company for at least 1-2 years. Self-employed individuals need to show business stability and revenue generation proof.
• Credit score: While a credit score of 750 and above is considered excellent, individuals with a lower score can still get approved but may face certain restrictions. In some cases, approval is possible even with a score of 600-650.
• Age: Typically, the applicant is required to be between 18 and 60 years of age for salaried individuals. Self-employed individuals can get loans until the age of 65 or even more.
• Property/Assets: For secured loans like home loans and car loans, financial institutions check whether the borrower has property or other assets to place as collateral. The higher the value, the higher the eligibility.
• Existing EMIs: If the applicant is already paying Equated Monthly Instalments (EMIs) for other loans, total obligations should not exceed 30-40% of monthly income to get approval for additional loans.
• Documents: Valid Know Your Customer (KYC) documents like ID proof, address proof, and passport-sized photos are required.
• Loan type: The eligibility criteria may vary depending on the type of loan applied for. For example, personal loans have different eligibility criteria compared to home loans.