A personal loan is unsecured loan because one does not have to keep anything as security with bank for applying for the loan. It is very helpful if one need short term finance. Instead of borrowing money from inner circle, one can take personal loan to support his/her needs. Personal loan is form of borrowing from bank or financial institutes. This loan option allows the applicant to borrow money from financial institute without any guarantor or collateral.

Personal loan is usually for the time period of 12 months to 60 months. But the duration of the loan is completely depending upon the bank or financial institute’s policy. Usually the time duration is short as it is a smaller finance compare to other big secured loans like home loan. It is very convenient as the loan can be repaid by EMIs spread over the time.

Eligibility for Personal Loan

Both banks as well as non-banking financial institutes provide personal loan. No matter through which bank or financial institute you are applying for personal loan, there are few basic factors considered by many of these institutions for loan eligibility. Following is the general eligibility point to take care of:

Monthly Income :
For most banks & financial institutes the minimum monthly income limit for personal loans is Rs. 12,000 in semi-urban areas whereas it is Rs. 15,000 in bigger cities such as Delhi and Mumbai. The monthly income limit is higher in bigger cities as the cost of living is also high in these cities.

Criteria for Salaried Applicants:
Personal loan can be availed by both salaried as well as self-employed. When it comes to the personal loan application of a salaried person the employer plays an important role. If you are working at central, state or local government offices or departments than taking personal loan would be very easy for you. Secondly even of you are working in private firm but the firm is well known than it will ease the process. You should be working at least since past 12 months with your current employer.

Criteria for Self-Employed Applicants:
Self-employed person can also take personal loan as easily as salaried person. The requirement for documents will definitely be different for both applicants. If you are a business man or self-employed, your business should be at least a year old & should making profit in that past one year. The criterion for loan on the basis of turnover will be different in different banks & financial institutes.

Age:
Generally the minimum age limit for applying for personal loan is 21 years & maximum age limit is 60. Many banks & financial institutes have altered the upper & lower limit of the age of the applicant. The age is considered just to make sure that you are at the age to repay the loan.