A personal loan is one of the most popular financial products available in the market today. These are the best loans for salaried individuals in India as they offer a plethora of benefits, including flexible tenure, large loan amounts, unlimited usage, and competitive interest rates. But how to choose which suits you better. In this post, we will discuss why salaried people find it easy to get instant personal loans in India, the eligibility conditions, and the factors affecting the approval process.
Understanding Secured vs. Unsecured Loans
Now, personal loans are majorly of two types: secured and unsecured. Understanding the differences between the two is essential. Secured loans can be acquired by pledging collateral, which means the borrower will need to keep an asset as security. On the other hand, unsecured personal loans do not need any collateral from the applicant. These loans, easily accessible to all, are invaluable for myriad purposes – a planned vacation, sudden medical expenses, or settling outstanding debts.
Why Salaried Employees Get an Edge Over Others for Instant Personal Loans
When it comes to obtaining instant personal loans, salaried individuals hold a distinct advantage. Financial institutions prefer applicants with a stable monthly income, making salaried individuals more likely to secure approval. Before extending a loan without collateral, banks and NBFCs assess the borrower’s ability to repay. The stability of income that salaried applicants bring to the table enhances their chances of qualifying for an instant loan.
In contrast, self-employed or unemployed applicants, needing a consistent income source, may face challenges at times in proving their creditworthiness for timely repayment.
Top 5 Factors Influencing The Loan Approval
Here are the top five factors that can influence the approval process of instant personal loans for salaried employees:
1. Employer Reputation
Your employer’s reputation matters when applying for a loan. Being associated with a well-known company boosts your chances of loan approval. Lenders see it as a positive sign, making you more trustworthy and eligible for the loan.
2. Managing Outstanding Debts
How well you handle existing debts affects loan approval. Lenders check if you can manage your debts responsibly. Being good at this shows them you’re financially responsible, improving your chances of getting the loan.
3. CIBIL Score
The CIBIL score gives lenders a quick look at your creditworthiness. Though it’s not the only factor, it reflects your credit history and financial discipline. A good score positively impacts the initial impression lenders have of you.
4. Annual Income
Your yearly income is helpful for loan approval. It directly influences whether you get the loan and how much you’re eligible for. Lenders use your income to judge if you can comfortably repay the loan. A higher income often means a better chance of loan approval.
5. Loan Application History
Lenders see applying for too many loans in a short time negatively, raising doubts about your financial health. Being strategic and careful about when and how you apply for loans improves your overall financial image, making it more likely for lenders to approve your loan. Remember, every time you make a hard enquiry, it reflects in your CIBIL score. So, be wary of it.
Eligibility Criteria
Apart from the abovementioned factors, specific eligibility criteria guide the personal loan approval process:
- Indian Citizenship: Loan applicants must be Indian citizens.
- Age Bracket: The applicant should be between 21 and 60.
- Employment Stability: Salaried individuals must have a year of employment history.
- Good Credit Score: A credit score over 750 enhances eligibility.
- Default-Free Record: Applicants should have no default cases.
Documents Required For Personal Loan For Salaried Individuals
Here are the required documents to apply for an instant personal loan when you are a salaried applicant:
- Identity proof like Aadhar Card, PAN Card, Driver’s License, and Passport.
- Address proof like gas or electricity bill, Aadhar Card.
- Bank statements for the last 6 months
- Salary slips for the last 3 months
- Form 16 or ITR documents.
Obtaining a personal loan for salaried individuals offers a smoother journey with multiple approval advantages. The stability of income from employment enhances eligibility, simplifying the process. However, selecting the right financial lender is equally important for all types of borrowers. Research and analyse various lenders, understand your unique needs and then select the right lender. With tailored solutions, the accessibility and convenience of personal loans make financial assistance readily available for various needs.
