Personal Loan

Eligibility Criteria for a Personal Loan in India

Required Documentation for Personal Loan Application

A personal loan is a popular unsecured loan option in India that helps individuals meet various financial needs such as medical emergencies, home renovation, travel expenses, or debt consolidation. It does not require any collateral and is typically repaid in fixed EMIs over a set tenure. Many people opt for a personal loan due to its quick approval, minimal documentation, and competitive interest rates. Compared to credit cards, personal loans often come with lower interest for larger amounts. If you're looking for instant funds, a personal loan can be a smart and convenient solution.

1. Minimum Monthly Salary – ₹20,000

To qualify for a personal loan, applicants must earn a minimum monthly salary of ₹20,000. This is a basic income threshold set by many lenders to ensure the borrower has a steady financial inflow and can repay the EMIs without strain. Salaried individuals in metro cities may have a slightly higher salary requirement due to the cost of living and financial risk assessments.

🔹 Why it matters: A stable monthly income assures lenders of your repayment ability. Lower salaries may result in higher interest rates or even rejection of the application.

2. Job Stability – Minimum 1 Year

Most lenders require a minimum of one year of job stability with your current employer. This condition shows consistency and reliability in your employment history, which lowers your credit risk in the eyes of the lender.

🔹 Why it matters: Frequent job changes or short work histories may suggest instability, which can lead lenders to believe there's a higher risk of missed payments.

💡 Tip: If you’ve recently switched jobs but have over a year of total work experience, some lenders may still consider your application favorably, depending on your credit profile.

3. Age – Above 21 Years

To apply for a personal loan, the applicant must be at least 21 years of age. While 21 is the minimum age, the upper limit usually goes up to 60 years, depending on the lender.

🔹 Why it matters: This age range ensures that the applicant is legally eligible and likely to have a steady income during the loan tenure. For older applicants nearing retirement, lenders may limit the tenure or request additional documentation.

4. Salary Must Be Credited to a Bank Account (Cash Salary Not Allowed)

Lenders require that your salary be credited directly to your bank account. Cash salaries are typically not accepted due to lack of verifiable income proof. This transparency helps financial institutions assess your monthly income and spending habits before approving your loan.

🔹 Why it matters: Bank-credited salaries leave a clear financial trail, making it easier for lenders to verify income and offer appropriate loan amounts and interest rates. It also ensures compliance with financial regulations.

1. Identity Proof

Submit any one of the following valid government-issued photo ID documents:

• PAN Card (Mandatory for financial verification)

• Aadhar Card

• Passport

These documents help verify your identity and are essential for credit assessment.

2. Address Proof

Provide any one of the following documents as proof of your current residential address:

• Driving License

• Voter ID Card

• Aadhar Card

• House Tax Receipt or Water Tax Bill

Ensure the document carries your full name and current residential address for validation purposes.

3. Bank Statement

• Last 6 months’ salary credit bank statement

This helps the lender confirm regular income credits into your account and evaluate your repayment capacity.

4. Salary Slips

• Last 3 months' salary slips

Salary slips are essential for verifying your current income, employer details, and consistency of salary.

📌 Note:

Ensure that all documents are clear, legible, and up to date. Any mismatch in details may delay the processing of your loan application.