Documents required for a personal loan

Several factors can affect your personal loan eligibility. It’s recommended to understand these before applying:
 

• Credit score
  A credit score of 680 or above is preferable. A lower credit score can result in rejecting a loan or an instant personal loan with higher interest rates.
• Employment status
  Applicants should be salaried, or self-employed with a minimum household income of ₹3 lakhs. This includes the total income of your spouse and unmarried children.
• Debt-to-income ratio
  A low debt-to-income ratio is preferred, reflecting low financial strain and high repayment capability to the lender.
• Financial History
  A clean financial history with no defaults on previous loans or credit cards.

Tips to improve personal loan eligibility

Follow these practical tips to improve your personal loan eligibility:
 

1. Improve credit score
   Repay your monthly bills on time and reduce outstanding debt to improve your credit score. If you have no credit history, you can take a credit-building loan or use a credit card and repay your monthly instalments in full and on time to build a positive credit history.
2. Stability in employment
   Stay continuously employed for at least two years, preferably in a company of repute. Job-hopping is often indicative of instability and comes across as a risk to the lender.
3. Opt for a co-applicant
   A co-applicant with a high credit score, low debt-to-income ratio, and high net worth can significantly boost your loan approval chances.
4. Realistic loan amount
   Given your income, choose a loan amount that does not exceed your repayment capabilities to increase your personal loan eligibility.