Personal Loan Eligibility

Overview

Eligibility for a personal loan whether secured or unsecured, is the maximum personal loan amount you can borrow from the lender based on your overall lending profile. However, it is not limited to it, but also include factors such as income of the applicant, the current age, applicant’s profession, cibil score and tenure of the loan.

General Personal Loan Eligibility Calculation
Age Minimum 18 Years to Maximum 65 Years
Minimum Income Rs. 12,000 per month
Minimum Interest Rate 10.75% per annum
Maximum Tenure 96 Months
Total Work Experience 5 Years Minimum

How Personal Loan Eligibility is Calculated?


Your eligibility for personal loan is calculated based on some important factors such as your current income, average balance in bank accounts, age at the time of loan application, assets you own, credit history, work experience and professional stability, current organisation and the requested tenure.

Banks/FIs Min Monthly Salary/Income Age Max Amount
HDFC Bank Rs. 20,000
Rs. 15,000 in Tier-II Cities
21 to 65 Years Rs. 50 Lacs
SBI Rs. 20,000
Rs. 5,000 for Existing SBI Account holders
21 to 76 Years Rs. 15 Lacs
Axis Bank Rs. 15,000 21 to 60 Years Rs. 15 Lacs
ICICI Bank Rs. 20,000 to Rs. 25,000
Rs. 17,500 in Tier-II Cities
21 to 65 Years Rs. 20 Lacs
YES Bank Rs. 18,000 22 to 58 Years Rs. 25 Lacs
Indusind Bank Rs. 25,000 21 to 65 Years Rs. 15 Lacs
Bajaj Finserv Rs. 32,000 to Rs. 37,000
Rs. 27,000 in Tier-II Cities
22 to 59 Years Rs. 35 Lacs
Capital First Rs. 20,000 23 to 68 Years Rs. 25 Lacs
Citibank Rs. 30,000 23 to 60 Years Rs. 30 Lacs
Tata Capital Rs. 20,000 21 to 65 Years Rs. 25 Lacs
Fullerton India Rs. 12,500
Rs. 15,000 for Self-Employed
21 to 65 Years Rs. 30 Lacs
Kotak Mahindra Bank Rs. 20,000 21 to 58 Years Rs. 15 Lacs
Standard Chartered Bank Rs. 22,000 21 to 58 Years Rs. 30 Lacs
Canara Bank Rs. 10,000 21 to 58 Years Rs. 3 Lacs
PNB Rs. 10,000 to Rs. 15,000
Rs. 7,500 for Teachers & Defence Personnels
21 to 65 Years Rs. 10 Lacs
Aditya Birla - 23 to 60 Years Rs. 15 Lacs
Bank of Baroda Rs. 10,000 21 to 65 Years Rs. 10 Lacs
IDBI Bank Rs. 15,000
Rs. 30,000 to Rs. 41,667 for Self-Employed
21 to 75 Years Rs. 10 Lacs
RBL Bank Rs. 25,000 25 to 60 Years Rs. 20 Lacs
Indiabulls - 21 Years Minimum Rs. 15 Lacs
Bank of India - 21 to 75 Years Rs. 20 Lacs
Bandhan Bank - 21 to 60 Years Rs. 5 Lacs
Federal Bank Rs. 25,000 21 to 55 Years Rs. 10 Lacs
Indian Bank - 21 to 78 Years Rs. 6 Lacs
Andhra Bank - 21 to 75 Years Rs. 20 Lacs
Corporation Bank - 18 to 65 Years Rs. 3.5 Lacs
Syndicate Bank - 21 to 58 Years Rs. 20 Lacs
Muthoot Finance Rs. 20,000
Rs. 15,000 in Tier-II Cities
- Rs. 10 Lacs
HSBC Bank Rs. 33,333 to Rs. 41,667 21 to 65 Years Rs. 30 Lacs
Home Credit - 19 Years Minimum Rs. 2 Lacs

Income

Income is one of the factors which directly impact your eligibility for maximum loan amount you can avail from a certain lender. In case of personal loans, the banks and financial institutions mainly keep a check on your average monthly income throughout your entire earning period. This helps the lenders understand whether your salary graph is upward or downward.

When it comes of the eligible income for personal loans, the lenders only consider a portion of your current income rather than the entire income, and co-relate it to the current status of your existing obligations and liabilities to understand your current financial conditions. As per the basic FOIR norms, a lender can offer a minimum 45% of your current monthly income to a maximum of 65% of the current income. However, the lender can decide to go even higher (not more than 75%) if it finds the borrower enough credit-worthy. The higher your FOIR is, the higher loan amount you can borrow from a bank / financial institution. You can simply calculate your FOIR based on the formula shown here.

The more one is capable to save each month, the more preferable he/she becomes to the lenders. It represents your saving pattern and financial stability and plays an important role in getting a high personal loan amount and sometimes even in getting quick approval, especially if your average balance in bank account is usually higher. Whereas, the lower number of your monthly savings, drops a light on your financial instability.

Moreover, including your additional income from other sources such as rental income, bonus and incentives, and income from any investment etc. on a regular basis, can actually help you avail more funds due to high eligible income.

Age

The age of a borrower is dividing into two metrics, Minimum Age and Maximum Age, and it varies depending upon your current employer and profession. The minimum age of a borrower decides if the borrower is eligible, even to apply for the personal loan. Most of the banks and financial institutions ask for the borrower to be at least 21 years in case of salaried and 23 years in case of self-employed, at the time of loan application. However, this minimum age criteria may changes depending upon the lenders and your profession such as cooperative bank usually demands the borrower to be at least 18 years at the time of loan application, and many lenders demands professionals like doctors and engineers to be at least 25 years old at the time of loan application.

As for the maximum age is concerned, it is measured in regards to the maximum tenure can be allowed the borrower while keeping in mind his retirement age. It tends to differ based on whether you are a salaried, self-employed or a pensioner. Most of the banks and financial institution have set a maximum age limit for salaried at the time of loan application to be not more than 58 to 60 years, depending upon the retirement age in the organisation especially if the borrower is a government employee. An aged salaried borrower should always keep his retirement age in mind when applying for a personal loan especially if it is an unsecured personal loan, since a personal loan applied within 24 months from the date of retirement have a higher chance of rejection.

As far as the self-employed and pensioners are concerned, most of the lenders demand a self-employed borrower to be not more than 60 to 65 years at the time of loan application where personal loan must be fully repaid before the borrower reaches the age of 70 years. And, in case of pensioners, the maximum age of the borrower should not be more than 68 to 70 years at the time of loan application where the loan must be fully repaid by the age of 75 to 77 years.

Number of Assets

The number of assets you have, be it an insurance policy, property, or proof of investments, also matters when it comes to a personal loan eligibility especially if it is a secured personal loan. Based on the assets, the borrower can avail the personal loan of the equivalent amount. So, the more valuable your assets are, the more you can lend from the banks and financial institutions.

Credit History

The credit history of a borrower is one of the key aspect in case of personal loan especially if it is an unsecured personal loan. Depending upon the credit history of a borrower, the bank may approve or reject the loan application regardless how good your current income is. Credit history represents the lending behaviour of the borrower and together with credit score, it helps banks/FIs determine the credit risk profile of a borrower and offer the loan amount. Most of the banks/FIs ask the credit score to be 700 or higher to keep a distance from any credit risk scenario. However, some of the private lender may allow you to lend from them even if the credit score is lower than 700 points. It is important to know that the lower your credit score is, it is most likely that you'll get personal loan at high interest rates.

Work Experience & Professional Stability

Total number of work experience of a personal loan applicant shows the lenders how much the borrower is stable in his line of profession and if doing any progress, or likely to have higher income in future or not, which represents if the borrower is able to pay off the debt or not. A borrower with total work experience of 5 years or above represents a stable career as well as income growth. If a borrower is working in his/her current organisation for a long time now, it shows banks/FIs that the borrower is good at maintain his/her professional stability due to constant growth in the current organization, most likely to result in higher salary than previous unlike applicants who are involved in unstable profession or usually switches employers in respective of high income offers.It shows that although the applicant might have a high monthly salary at the current point of time, but have a tendency to not maintain employment stability, which is most likely to be an issue for the income growth of the applicant in future and possibly resulting in debt pay off issues.

Highest Qualification

The qualification of the borrower is a deciding factor specifically in case of self-employed professionals such as doctor, chartered accountant, and engineer etc. Banks and Financial institutions link it in a way, that the higher level of education a borrower have, it is most likely that he is or will be having a high income as compared to someone who is comparatively lower in terms of qualification level.

Current Organisation

When it comes to salaried borrowers, banks/FIs also consider the organization you have been employed in and whether your current employer/organisation is safe in order you to have a consistent income growth and professional stability. The banks/FIs each year update their list of credit risk organisation who are either have been labeled as bankrupt or on the brink of it as announced by the government each year. If the borrower is employed with one such company/organization, the banks/FI tends to avoid such case due to the possibility of bankruptcy of the borrower, resulting in a threat to earnable income of the borrower as well as the future growth.

Tenure

The tenure of a personal loan is also a major factor in deciding eligibility criteria especially the maximum loan amount one can avail. Most of banks offers tenure ranging from 1 years to maximum upto 5 years. However, few of the banks have set the minimum tenure criteria to 6 months such as HSBC. Moreover, some banks/FIs have set the maximum tenure criteria between 7 years to 8 years, such as Bajaj Finserv offers a maximum period of 8 years on personal loans. The tenure also varies depending upon the personal loan offering of the bank/FI to salaried and self-employed borrowers.