Here’s How You Can Increase Your Personal Loan Eligibility in a Pandemic

Personal loans hold the key to achieving certain life goals, and during the pandemic have helped people tide over many eventualities. These types of loans are unsecured, meaning that the bank or lender does not ask for collateral against which the loan amount is given. This makes personal loans risky investments for the lender. For this reason, they assess the eligibility of the applicant after a thorough examination of their credit score, ability to pay EMI, job profile and income.


While the applicant can do little to make any favourable changes in their employment situation, they can ensure a healthy credit score and make smart decisions to increase their EMI affordability. The rate of interest of personal loan ranges from 12% to 24%. What figure is applicable to a certain borrower depends on their credit history and ability to repay the loan. Here are some ways in which applicants can improve their personal loan eligibility –

How much EMI can you afford to pay?

After analysing your monthly salary, the lender will check to see if the total EMI liability stands at less than 50% of the salary. If your loan repayment EMI is more than 50% of your salary, chances are that your application will not be approved. The tenor for loan repayment dictates the amount of EMI payable. The shorter the tenor, the higher will be the EMI amount and the longer the tenor, the smaller will be EMI payable. You must also remember that when the tenor is short, your interest is lower and a longer tenor means higher interest payable.

Check your credit score

The ideal credit score to have for personal loan eligibility is between 750 and 900. Having such a credit score can assure you of getting a personal loan. However, should your credit score dip below 750, there is a chance your application will be rejected. It reflects a poor history of loan repayment and you could be labelled as a high-risk applicant. If your application is approved, you will likely be required to pay a high rate of interest for a personal loan. Remember, you can take the right steps to improve your credit score with timely repayment of existing loan EMIs and credit card bills.

Add a co-applicant

In the event that you are ineligible for a personal loan, getting a co-applicant can be a good idea. Adding one or multiple co-applicants can help you improve your eligibility as multiple borrowers become liable to repay the loan. It lowers the credit risk for the lender, making it easier for them to approve your application.

Avoid multiple loan enquiries

Each time you make a loan enquiry, the lender in turn raises an enquiry with credit bureaus in a routine assessment of the risk of default you may pose and overall creditworthiness. These enquiries, raised by the bank, are hard enquiries and are listed in your credit report. Whenever such an enquiry is listed, your credit score is brought down by a few points.

This is why when you are browsing for a personal loan, you should not make enquiries with multiple lenders in a short time span. Instead, you should compare the various lenders and the personal loans offered on online financial marketplaces. Enquiries raised online are also registered with the credit bureau, but they do not affect your credit score as they are considered to be soft enquiries.


With Finserv MARKETS, you can compare personal loans offered by some of the leading lenders in the country. So, for all those personal life goals such as planning a wedding or taking the vacation of your dreams, get a personal loan of up to Rs. 25 Lakhs with a processing fee of up to 2.50% of the loan amount.

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