We live in a time when personal loans are outdated. Now is the time for easy personal loans. They are loans that can be instantly availed by applying for them online via an app or website.

Availing instant personal loan online is the fastest way to avail funds that is useful in emergencies. But to avail personal loan instantly online, you have to be eligible as per the eligibility criteria of your lender. Failure to meet the prescribed eligibility criteria can result in the rejection of your online loan application.

Below are the 5 factors that determine your eligibility to avail easy personal loans online:

Factor #1— CIBIL score

Your credit score holds a lot of say in whether you are eligible for the loan and, if eligible, what interest rate would you be charged with.

Your credit score or CIBIL score shows your financial history, like your borrowing history and repayments history. If your credit score is high enough, it is easy and efficient for you to avail an easy personal loan online.

Generally, a credit score of 750 or more is considered excellent. In case your credit score is less than that, your chances of getting a loan are slim. In other cases, you may avail of a loan with a credit rating below 750, but the interest rate you are offered is steep.

To avail of easy personal loans online, you must have a minimum score of 750. A good credit score implies that you have taken multiple secured and unsecured loans and that you were regular and timely with your repayments.

When you have a good credit score, you stand out as a creditworthy borrower among the loan applicants. It is assumed that you will be regular in making repayments of the personal loan, taken instant and online, that is, if the loan is disbursed.

So, to improve your eligibility for easy personal loans online, you can become regular in making your existing repayments, if any. Consistent and regular repayments would eventually work in your favour as you will improve your CIBIL score and can avail of any loan you require in the future.

Factor #2— Your income

Your income is another important factor determining your loan eligibility. The reason is simple—the more you earn, the more is the possibility of you making timely repayments. In case you are a salaried person, your yearly income must be at least around three lakhs. For a self-employed person, the minimum annual income requirement is more than three lakhs.

As you take the loan, you are required to repay your loan in EMIs every month. So, when you have a sufficient income, it is natural that you would have enough funds left for necessities like house rent, food, clothes, bills, and transportation even after paying for the EMI.

As per one rule, the ratio (FOIR) of your total monthly EMIs of all the loans combined must not be over 35% of your monthly income. This way, you would have sufficient funds left for other things in life. Even when you fall in the high-income range, your monthly EMI obligation should not exceed 60% of your monthly income.

In conclusion, whatever be your salary range, your Fixed Obligations to Income Ratio (FOIR) must be lower. To lower your FOIR, find an additional source of income or lower your existing EMIs. Lowering your FOIR will increase your chances of being eligible for your instant online loan application.

Factor #3— Your employer

The employer with whom you are working is considered the ideal entity to gauge your believability. Working in high turnover organizations plays as an advantage for you in regards to availing of a loan.

Salaried employees of top-notch MNCs are considered to have a secure and stable future with their employment. Whereas, employees working in small and medium companies, start-ups, and proprietorships are not seen as having a secure future as there is a risk involved in them shutting down their business anytime, jeopardizing their employees’ financial future.

Any lender tends to prefer an employee of an MNC over an employee from other small companies. Moreover, the employees of top-notch companies get additional benefits such as a low-interest rate on any loan they take.

Factor #4— Your job stability

Employment stability is another critical factor determining your instant personal loan eligibility. Generally, to be eligible for an easy personal loan, you must have full-time work experience of at least two years in your current profession. This is for a salaried individual. If you are a self-employed individual, you must have to show at least five years of earning turnover.

Job stability lets the lender gauge your eligibility. Based on your stable and continuous career, your lender attends your loan application. Your lender analyzes your financial condition and repayment capability before granting you a loan. So, your longstanding stability in your industry or job goes to show that you are stable enough for the loan as well.

Alternatively, an applicant with employment gaps and multiple job changes is not trusted with a loan by a lender as their income is neither guaranteed nor stable. It is tough for the lender to decide whether or not the applicant would be regular with her repayments in such a situation.

Factor #5— Your age

The younger you are, the better is your probability of getting a loan. Banks and other financial institutions tend to think that a young man is more capable of repaying a loan.

Conclusion

So, your eligibility for getting a loan is dependent on these crucial factors. With this information at hand, you must gauge where you stand before applying for an easy personal loan online.