Factors that Determine Personal Loan Eligibility

personal loan

You could be thinking of taking out a personal loan for paying the expenses of a special vacation, a wedding, or debt consolidation. No matter what the reason is for you to seek personal loans, it is heartening to note that there is a broad spectrum of personal loan options available in the market today thanks to the various financial institutions and banks offering a host of personal loan options in diverse schemes and ranges. The personal loan eligibility criteria would be varying from bank to bank but there are some fundamental guidelines that are followed by most of the lenders while approving personal loan applications. Here are some of the fundamental parameters that would be determining your eligibility requirements for any personal loan.

Your Age Is a Key Factor

Age of the applicant is a key criterion while your application is being scrutinized for personal loan approval. The most fundamental guideline that is usually followed by the financial institutions and the banks is that the applicant must be a salaried person, at least, 21 years of age and maximum 60 years old. A self-employed man would qualify for a personal loan provided he is, at least 25 years of age and maximum 65 years old.

Job Stability Is a Vital Consideration

The employment status or the job stability is a vital factor that decides whether you are qualified for availing personal loans or not. Job stability is a must if you are seeking personal loans. The eligibility criteria of applicants as followed by most of the banks are if you are a salaried person, you need to be involved in a professional service for, at least, a couple of years with a year in the present job. A self-employed individual needs to have a 5 years business background out of which a minimum of 2 years in the present profession. Remember all these criteria are pretty flexible as per the lenders’ choice of the determining factors. Get in touch with http://www.libertylending.com/ for effective loan approvals and associated loan solutions.

Financial Status Is Important

Your loan application approval largely depends on your previous or current financial status. Minimum income levels have been identified and specified by diverse banks for personal loan applications. The financial condition would certainly help in determining the current repayment capability of the applicant. It is understood that the lenders would put a major emphasis on this particular aspect while approving an unsecured personal loan. The amount of loan that one is eligible for is also decided based precisely on this key criteria.

Credit Rating Plays a Pivotal Role

Your credit score and your credit history are important factors that are meticulously scrutinized before approving personal loans. Defaults and unnecessary delays in the payment of EMIs of some other loans or even credit card dues are factors that would be reducing the personal loan’s eligibility. An impressive credit rating would be enhancing the entire amount which you are eligible for.

Outstanding Credit Liability

If a loan applicant has some other outstanding loan at the time of applying, it might reduce his eligibility for a large amount. The amount granted to you is based on how much the lender thinks you can pay back, and other outstanding loans obviously reduce your ability to repay large amounts. You are likely to be granted a much smaller loan.

Conclusion

The above-discussed factors are important for determining your eligibility for a personal loan. However, the authorities at banks and lenders’ offices have enough discretionary powers to be flexible in their deliberations.

Author Bio: Blake Golding is a finance expert and blogger. He puts his years of experience in the private and corporate finance world to good use by writing informative articles and also recommending top firms like http://libertylending.com/.