Top Factors Influencing Personal Loan Eligibility

Personal Loan

An instant money loan is an unsecured Personal Loan that are extended based on your eligibility. These loans do not seek collateral or guarantee of any form. The lender checks your credit score, income capability, current monthly income and on-going debt to analyse the risk associated with your profile. Thus, it is very crucial to ensure that you meet the eligibility criteria cited by the lender. Your loan approval, the interest rate levied on the loan, as well as the charges on the loan are all depended on these factors. 

Instant cash loans are offered with zero-restrictions to end use. That means you can use the loan amount in any way you deem fit. You do not have to provide a budget or proof of expenses to your lender. However, the total loan amount you are eligible for is set by the lender based on the eligibility factors.

Read on to know more about the top factors influencing your personal loan eligibility.

Top Factors Influencing Personal Loan Eligibility

Personal loans are an easy and convenient method to receive a much-needed cash infusion. You can use an instant money loan for home renovations, medical expenses, business purposes, or even a vacation. An instant cash loan is a multi-purpose loan with shorter term, speedy processing and easy repayment.

However, in order to avail this quick cash loan, you have to meet the eligibility restrictions set by the lender. Read on to know more about these eligibility criteria –

  • Age

Age is a crucial factor that you must meet to be eligible for a personal loan. Most lenders offer personal loans to people within the age bracket of 21-58 years. This is primarily because of the high earning capacity of people in this age-group. 

People below the age of 21 are often not financially independent and those above the age of 58 years are close to retirement. Thus, there is a huge risk associated with their loan repayment capability. That’s why, most lenders restrict their loan offers to people falling within a specific age bracket. However, the age requirement may differ from lender to lender. It may also vary depending on whether you are a salaried employee or a self-employed professional. Make sure to check the age requirements specified by the lender while applying for an instant personal loan. 

  • Income

Your ability to pay off the debt is strongly correlated to your income. Your financial portfolio’s most important factor is your income. The minimum salary requirement varies depending on the lender. For most lender it is Rs. 15,000, but some may seek a minimum salary of Rs. 25,000. When determining your income limit, your lender considers the city where you reside and the business you work for.

Although the lending institution considers your primary source of income, it can be beneficial to mention any additional sources of income. If you have stable income from passive sources like rental property, freelancing, side business, income on investments etc., then make sure to mention it on your application. Having a second income works in your favour when securing an instant cash loan.

  • Credit history

An instant money loan is an unsecured loan. This loan can be obtained without giving pledging any asset as security or collateral. As a result, lending institutes rely on the credit score assigned by registered credit bureaus based on your past credit behaviour. Your credit score is a reflection of your creditworthiness.

Your credit history exposes your past EMI irregularities, past borrowing behaviour, on-going debts, loan defaults and more. Thus, it is very important to pay your loan EMIs and credit card bills on time. Defaulting on the due date can result in a negative effect on your credit score. 

  • Debt-to-income ratio

Even if work for a reputable company and have a good salary, but most of your income goes toward EMI repayments, then also lender may reject your loan application. Most lenders specify that your debt-to-income ratio should not exceed 50%. That  means, your EMI repayments and credit card bills should not occupy more than 50% of your income. 

Your debt-to-income ratio is a crucial factor for determining your loan eligibility. It also influences the total loan amount offered by the lender, the interest rate levied and the loan tenure you are offered.

  • Stable Employment

The lender considers your current employment status and your professional experience when approving your instant cash loan application. Lenders prefer applicants who have a stable employment, and works for a reputable company. They often extend loan offers to individuals working for reputed MNCs or in government sector.

Most lenders specify an eligibility requirement of working in the current company for 6 or more months. If you are a business owner, then you must be able to provide the records of past 2 years in the business.


Before applying for an instant cash loan, you must check out the eligibility criteria mentioned by the lender. You can visit the lender’s website or download an online loan app. The eligibility rules are clearly mentioned by every lender. Make sure that you fulfil all the requirements cited by the lender. Failing to meet the eligibility criteria will result in loan rejection. This affects your credit score negatively.

In addition to this, knowing the eligibility rules helps you prepare your credit profile. Secure a job at a reputed company and maintain a high credit score by paying off your debts regularly on time.

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