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What Factors Other Than Salary Determine Personal Loan Approval

The craze for personal loans has increased significantly over the years. In today’s era, people don’t want to break their savings for financial emergencies. Instead, they apply for a collateral-free personal loan. One must know that the lender considers the monthly salary as a criterion for loan approval. Salaried and self-employed applicants are approved by lenders. It is because they can return the loan amount and the interest levied to the lender. Someone without an income source cannot repay the loan. Besides the applicant’s income, many other factors are considered for a personal loan. Read on to understand the factors that determine personal loan approval.

CIBIL score

CIBIL or credit score is an important factor considered for personal loan approval. Someone with a bad credit score might have missed many EMIs in the past. Why would lenders trust someone who hasn’t paid his previous bills timely? Generally, one must have a credit score of 700 or above to get a personal loan in India.

Before applying for a personal loan, one must make a habit of checking their credit score. In general, individuals must check their respective credit scores twice a year. When you or someone else checks the credit score a few times, it is called a soft inquiry. When multiple lenders check your credit score, it is considered a hard inquiry. A hard inquiry can hurt the CIBIL score. For the same rationale, it is advised not to submit loan applications with multiple lenders simultaneously. 

Work experience

Besides the borrower’s monthly income, work experience is also considered for loan approval. Applicants who have stable jobs are considered for personal loans. Similarly, someone with a steady self-employment income is also considered for a personal loan. A stable job means a stable income. Such individuals can easily repay the loan to the lender. The personal loan eligibility required for work experience might change from one lender to another. Usually, lenders demand at least a year of work experience in the current organisation for personal loan approval. An unstable job might impact the approved loan amount and the interest rate. Sometimes, your loan application might be rejected due to an unstable job.


Age is another factor considered for personal loan approval by lenders. Most lenders have a minimum age and maximum age for offering personal loans. Loan applicants who fit within the age bracket are considered for loan approval. It is crucial to note that the age bracket for personal loans will change from one lender to another. The age bracket for personal loans offered by Fullerton India is between 21 and 60 years.

EMI-to-income ratio

One gets a personal loan based on their monthly income. Lenders say that the EMI of a personal loan must not exceed 70% of the monthly income. For the same reason, choosing the right loan amount is essential. If the EMI of a personal loan is more than your monthly income, the loan application will be rejected. Lenders also consider other expenses that the borrower pays from their salary. It is why the debt-to-income (DTI) ratio of the borrower is considered by lenders. If the EMI exceeds the monthly income, try reducing the personal loan amount. Borrowers should apply for loans that they can repay easily. 

Documents required for personal loan approval in India

Besides the factors mentioned above, one must submit a complete personal loan application for approval. Some documents are required for personal loan approval by the lender. The documents are mandatory whether you submit the loan request online or offline. The personal loan application will be incomplete if any of these documents are missing. Here are some of the documents required for personal loan approval:

  • Pan card/Aadhar card
  • Salary slips
  • Bank account statement
  • Address proof
  • Electricity bill

The lender might also require some other documents. Check the personal loan eligibility required and submit an online application with Fullerton India. Ensure that you have a good credit score and a stable income for personal loan approval. Apply now! 

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