A personal loan is an unsecured loan, and thus, financial institutions prefer lending it to people who can fulfil their elaborate eligibility criteria. Eligibility for most financial institutions such as Dhani Loan entails good credit score, repayment capacity of the individual, nature of employment, income proof, etc. However, one of the most important factors these institutions depend on when approving a personal loan is the disposable income of the applicant. Sufficient income ensures the applicant is less likely to default and would be capable of paying the monthly EMIs. However, for low-salaried individuals, getting a personal loan is a little difficult but not impossible. Here are some of the processes using which an individual having low income can get a personal loan for meeting their emergency or non-emergency personal needs.
Fulfils eligibility Criteria
If you are currently earning a comparatively low income and want to ensure your personal loan application doesn’t get rejected, then it becomes all the more important to you to compare the eligibility criteria of respective lenders before applying. Indiabulls Dhani personal loan eligibility, for example, requires the applicant to be a salaried professional or self-employed entrepreneur for applying for a personal loan from Dhani Loan. There are some which need consistent income proof for the past three months.
Demonstrate how you will pay for EMIs
Belonging to a low-income group categorizes you as a high-risk applicant and can make the lender doubt your repaying capacity. To contract the same, demonstrate how you can pay the EMIs. If recently, there has been an upward revision in your salary, or you can show the lender an additional source of income you have, lenders such as Dhani Loan may consider your application.
Apply with a co-applicant
Applying with a guarantor or as a joint loan with a co-applicant with more income than you and a higher credit score is another way of availing a personal loan from financial institutions such as Dhani Loan. Co-applicant could be your spouse, parent, or sibling. Not only it acts as an instrumental in increasing your loan approval prospects, but EMI can be conveniently divided between the two co-applicants.
Long-tenured employee
If an applicant has a history of short work duration in previous companies, they will be seen in a negative light by the lender as the chances of defaulting on payment is more with such applicants. However, you are more likely to fulfil the Indiabulls Dhani personal loan eligibility if you have a steady income or job. If your prospective lender can see how your experience with the current company has been longer and you haven’t changed jobs frequently in the past, it can prove beneficial to you.
Apply for a lower amount of personal loan
If you could opt for a lower amount of personal loan as there are fewer chances of you getting defaulting on the same due to limited income. Choosing to apply for a low amount of personal loan ensures you can repay it regularly, which can help you improve your credit score. Dhani Loan, for instance, offers personal loans ranging from Rs 1000-Rs 15 lakhs, and if the loan amount is below Rs. 20,000, then the borrower isn’t required to pay prepayment charges. With personal loan tenure ranging from 3 to 24 months, you can repay the loan amount as early as possible and thereby build a good credit history.
Having a good credit score
Lenders often look at the borrower’s credit score as it gives them insight into how they have managed borrowed money in the past. Lower the credit score, the higher the chances of defaulting. This is one of the primary reasons which holds back lenders from lending to such applicants, as there is little chance that they might default on payments. So, if you happen to have a credit score close to 900, you are more likely to fulfil the Indiabulls Dhani personal loan eligibility and other lenders and thus, have a better chance of your loan application getting approved.
Low Debt to income ratio
Most of the lending platforms consider the borrower’s debt-to-income ratio to ascertain repaying capacity of the borrower. It can be easily calculated by dividing the total debt by the applicant’s monthly salary multiplied by 100. Having a low debt to income ratio can hugely impact Indiabulls Dhani personal loan eligibility and other lender’s criteria. If the ratio is more than 43%- that is, 43% of your income is being spent on repaying debt, then lenders won’t likely accept your loan application. A reduced ratio would imply that an applicant’s financial obligations are lower than their income which shows good repayment ability on the part of the applicant.
Check interest rate before applying
Lastly, check and compare the interest rates of the various lenders before narrowing them down to one. For example, if you are charged a high rate of interest, your total interest outgo will be more, thus causing you to use up most of your salary in repaying the debt. And do assess the other charges such as processing fees, prepayment charges. The interest rates for Dhani Loan, for instance, start from 13.99%, and there are no prepayment charges if the total loan amount is Rs. 20,000.
A personal loan, if compared with other unsecured loans, is easily available and gets approved easily if the applicant can fulfil the minimum eligibility criteria of the lender. However, most of the institutions require their applicant to earn a certain amount of income or salary per month. And if a person’s monthly income is lower than a certain limit, then they are categorized as high-risk borrowers. Lenders such as Dhani Loan are more likely to grant you a personal loan if you can prove you had a steady job and have avoided frequent job changes, good credit score, and successfully demonstrated an additional source of income in which you get monthly returns. At the same time, try to improve your credit score by paying off bills and outstanding credit on time which can pave the way for your personal loan application from getting rejected.
