A personal loan is a relatively easier loan to procure when you’re facing unprecedented financial emergencies and ensures that you have access to funds when you need them the most. However, the amount for which you can get personal loans can vary due to several reasons, mostly centered around why you need it and what your income or salary is. Instant personal loans are a convenient way of managing financial emergencies and expenses, and one of the reasons why they are is because they are usually unsecured. This means that you don’t usually have to pledge any asset or offer collateral while applying for personal loans. However, there are a host of factors that determine the amount for which you can get personal loans based on your salary, which are as follows:
- Monthly income
Your salary or your income is the first and the most important thing that is considered when you’re applying for an instant personal loan. Even though you don’t have to give any security or collateral against the personal loans you apply for, since they are unsecured, you need to have an income that gives the financial institution certainty that you will be able to pay back the loan over a decided period.
The higher your income is, the better chances you have at getting your instant personal loan approved quickly by various lenders. Moreover, your salary will also determine how high or low the interest rate will be for your personal loans. Hence, if your income is above the risk limit, you can procure personal loans in a fairly easy manner. Usually, the minimum salary requirement that makes you eligible for personal loans in rural areas is INR 15,000 and if you reside in a metro city, it is INR 20,000 per month.
- Credit score
A credit score refers to the three-digit number, ranging between 300 and 850, which is calculated using your credit report, credit history, and the debts you have. This reflects your overall credit history, and how diligent you have been when it comes to paying back loans on time.
The higher your credit score is, the more creditworthy you appear to the lender you’re seeking an instant personal loan from. Your credit score will also determine one of the most important factors that you need to consider when taking out personal loans – the interest rate on the loan. Again, the higher your credit score is, the better the rate will be for your future personal loans.
Another important factor that is considered when you’re applying for an instant personal loan is your age. This is because the younger you are, the more working years you will have to repay the loan to the respective financial institution. A majority of financial institutions prefer personal loan applicants who fall within the age bracket of 23 and 58 years. If you’re an entrepreneur, the preferred age bracket is considered to be from 28 to 65 years. This is higher because you have the possibility of working even past the usual retirement age, primarily due to the self-employment factor.
- Size of the loan
The size of the instant personal loan also determines if you are eligible for it or not, and this differs in different financial institutions. Hence, when you’re applying for personal loans, factor in your current salary, and ensure that it is of a reasonable amount. Applying for an exorbitant loan may lead to subsequent rejection if your income or credit score is not proportionate or supportive of the magnitude of the loan.
- Current loans and liabilities
Finally, another factor that is considered when you apply for a personal loan is your existing liabilities and loans that need to be repaid. If you have an existing loan that you’re currently repaying, the lender wants assurance that you will be able to pay back the new and existing loans on time. Hence, your monthly salary should be adequate to accommodate your current and potentially new loan repayments without any delays.
Instant personal loans, such as the ones offered by EarlySalary, are becoming popular and are preferred over traditional personal loans due to their quick and convenient nature. EarlySalary is a pioneer in this regard as they simplify the application process by making it online, and requiring minimum documentation. If you’re thinking of applying for an instant personal loan due to a financial emergency, EarlySalary is your best bet as you get convenient and suitable repayment options with reasonable interest rates and no repayment fees, in case you repay the loan earlier than anticipated.
Feel free to contact us for any questions on credit, loans, and your instant cash needs! We’re listening all day on:
– Our Facebook Page
– Our Twitter Page
– Our Instagram Page
– Our LinkedIn Page
Download the EarlySalary app here, or log in to our website and be a part of the #OneSmallStep experience.