Personal Loans are undergoing rapid growth due to easy and digital processes. Since it is an unsecured loan where no collateral is required, it is easily accessible when you need urgent funds. Therefore, you can apply for a personal loan if you are a first-time user who wants to build a credit history.

In this article, we will understand the eligibility criteria and how to get a personal loan.

What is a Personal Loan?

A personal loan is an unsecured loan offered to fulfill sudden financial crunches such as medical emergencies, wedding plans, home renovation, moving expenses, etc. Banks and lending institutions check for your credit score to assess your credibility. A score of above 750 indicates a good credit history. As a result, you can get loans with low-interest rates.

Eligibility Criteria for Personal Loans

Documents required

• For Salaried Employee

2. For Self-Employed

Things to know before applying for a Personal Loan

• Check if you meet all the required eligibility criteria. 
• Keep all your documents ready such as your Aadhar card. PAN Card, passport, income statements, etc. 
• Check your credit score frequently and maintain a score of above 750 to get a competitive interest rate. You can quickly check and get your credit report instantly from Buddy Score.
• You must have a stable income of at least INR 20,000 to qualify for personal loan eligibility.
• Maintain your Debt-to-Income ratio less than or equal to 50%.
• Compare the interest rates offered by various lenders and choose the lender who offers lower interest rates.
• Plan and estimate your monthly EMI to plan your budget for the loan amount according to your income.

EndNote

With more than 16 crore Indians being “credit-underserved,” lenders are ready to use this opportunity to offer instant personal loans at competitive rates. Therefore, you can get a loan to build a good credit history if you are a new borrower.

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