Aug 9, 2019
According to CRISIL, a large chunk of people taking personal loans in India are the working class in the age group of 25-45 years. So, whether you are single or married in the former age group, at some point of time you will likely ask this question: “How can I get a personal loan? ”
A personal loan can mean a lot of things to a lot of people. For some, it could be a medical loan to care for a loved one, for another it could be financing a long-awaited holiday abroad, and for some a new beginning with a wedding loan. Then, there are personal loans that help you fulfil your desires for new gadgets, smartphones, home appliances and furniture, or supply you with adequate funds to redo your home.
Whatever the need or desire, personal loans have become an indispensable part of our modern lives where rising costs and inflation dictate purchasing decisions in almost every aspect of life. So, let’s try and find an answer to that question, “How can I get a personal loan?”
A personal loan is an unsecured loan sanctioned by a financial institution to a borrower based on him/ her meeting various criteria of eligibility for personal loans. Rate of interest and loan amount for personal loans are determined by the creditworthiness of the borrower. One is not required to provide any form of security or collateral to apply for personal loans.
With flexible terms and attractive personal loan interest rates, you can apply for a loan up to INR 20 lakhs with tenure of up to 60 months from various banks and NBFCs.
The best way to find an answer to that question is to ask what lenders check to assess your eligibility for personal loans. So, first we’ll understand the eligibility criteria and documentation requirements. You will also get some valuable tips on how to improve your personal loan eligibility.
To apply for a personal loan, you need to meet these minimum eligibility requirements: 
Before you apply for personal loans. ensure that the following documents are in order. It will help you get a loan faster and improve your chances of loan approval. 
Though artificial intelligence is gradually changing the way lenders assess your ability to repay, it is yet to become part of the mainstream credit assessment system. Therefore, your CIBIL credit score and debt-to-income (DTI) ratio are the primary information that lenders rely to judge your creditworthiness. The way you use and make payments for your credit cards, the loans you have taken and their payment history, overdrafts, etc., are all taken into consideration while calculating your credit score.
Make sure that your monthly EMI outflow is not more than the recommended percentage of your income. According to the chart below, your personal loan EMI should not be more than 10% of your net monthly income. Banks and NBFCs may still lend you if you are not maintaining this ideal number but it will invariably put some stress on your finances if you don’t maintain this balance in the long run.
Not more than 40% of net monthly income
Not more than 15% of net monthly income
Not more than 10% of net monthly income
Before you apply for a personal loan, we also suggest that you take a good look at your debt to income ratio. It can be calculated by dividing your total EMIs by your net monthly income and multiplying it by 100.
According to financial experts, a debt to income ratio of 25% to 40% is fine; anything above 50% is a cause for alarm.
If you are not sure how much EMI you can afford as per your current income, we suggest you use the Fullerton personal loan EMI calculator to get a better understanding.