Personal Loan Eligibility Criteria for Salaried & Self-Employed

Personal Loans are availed during emergencies or to meet certain needs and wants which are beyond the scope of the regular income. However, it is essential to understand if all criteria are met for applying for a  personal loan. Failure to meet the required eligibility will lead to the rejection of the loan application. Rejections negatively impact CIBIL Score and the potential to avail loan even from another lender.

Irrespective of your occupation or profession, there is always a need to check eligibility before approaching banks and it is all available through online just few clicks away.

Salaried applicants need to satisfy the following personal loan eligibility criteria.

The self-employed applicants need to satisfy the following personal loan eligibility criteria.

All the top lending institutions in India offer personal loans to their customers. Personal Loan eligibility criteria for each of these vary accordingly various factors. Here is a brief description of the same.

HDFC is the bank which offers you personal loans at affordable rates so that you can live you dreams and spend more on your lifestyle and necessities than EMIs. With HDFC you can get your personal loan disbursed within 2 to 3 days. HDFC is the bank which is known for maintaining transparency in any kind of loan processing. If you are an existing customer of HDFC then you can avail special offers and benefits too.

You can customize HDFC personal loan to meet your requirement. You can use HDFC personal loan for many purpose like for your vacation tour, your home renovation or it can be for wedding also and for many more things. With HDFC you can avail personal loans up to ₹25,00,000.

The processing is very fast with HDFC the result of which is your loan amount will be disbursed to you within 48 hours that is exactly 2 days from when you apply for your personal loan.

HDFC Bank offers its personal loans at an interest rates of 10.75% - 21.30% and the loan processing charge is up to 2.50% of the loan amount as applicable or it can be a minimum of ₹1000 to a maximum of ₹25,000 depending on your loan amount. HDFC Bank does not allows prepayment until 12 EMIs have been repaid. Be careful about the timely repayments for HDFC’s personal loan as the bank charges 24% per annum on the outstanding amount of loan for late payments.

It has fast approval processes with minimal and easy documentation. Below is the list of HDFC personal loan eligibility criteria.

Eligibility Criteria:

• Aged between 21-60 years
• Minimum 2 years of total work-experience with at least 1 year tenure with current employer
• Minimum ₹24,000 per month and net income should be ₹30,000 if located at Delhi, Bangalore, Cochin, Chennai, Mumbai, Ahmedabad and Kolkata.

ICICI is the largest private sector bank in India. ICICI offers you wide range of banking products and it best at providing financial services like home loan, personal loan, business loan etc. You can avail a personal loan from ICICI for different purposes such as for holidays, education, for your home renovation, for wedding expenditures and even for buying gadgets and all.

ICICI offers instant processing for your personal loan with simple and easy documentation process. It requires less documents as compared to other Banks and NBFCs .

ICICI offers you attractive interest rates for your personal loan which vary from 11.25% to 21.00% and disbursal within 72 hours. The processing fees you will charged for your personal loan with ICICI is 1.25% of your loan amount. ICICI offers you flexible payment options from 12 to 60 months. loan amount can vary from ₹50,000 to ₹2,000,000. The other advantage with ICICI Personal Loan is that no security or guarantor is required.

Below is the list of ICICI Bank Personal Loan eligibility criteria.

Eligibility Criteria:

• Aged between 26-60 years.
• Minimum 2 years of total work.
• Minimum ₹24,000 per month and net income should be ₹30,000 if located at Pune, Bangalore, Chennai, Hyderabad and Kolkata.

Personal Loan requirement varies from person to person and Axis Bank understands this and hence created a personal loan product to meet your specific need. The personal loan interest rates and the charges involved are very competitive, making Axis Bank Personal Loan affordable, especially for salaried employees.  Axis Bank Personal Loan, over the period of time has gained popularity and trust of millions of its customers. And to make it even better, Axis Bank allows prepayment of personal loan without any prepayment charges. And just in case, should you face any problem or have any doubts or queries, their excellent customer support is always available to help you.

Axis Bank offers Personal Loan to salaried employees, with loan amount ranging from ₹50,000 to ₹1,500,000 for tenors of 1 to 5 years (12-60 months) at very competitive interest rates. Axis Bank Personal Loan requires very simple and minimal documentation and the application process is quick and hassle free. Axis Personal Loan feature quick approval, so that the loan application gets approved and disbursed in a very short period of time. Axis Bank offers fast service at less interest rate. It has very transparent and flexible in its eligibility criteria.

Below is the Axis Bank Personal Loan eligibility criteria.

Eligibility Criteria:

• Aged between 21-60 years.
• Maximum limit ₹1,500,000.
• Minimum ₹24,000 per month net income.

Citibank Personal Loan services are considered as one of the approachable and the most inexpensive ones existing in the service market. Citibank Personal Loan can be made use to meet financial requirements like medical expenses, education expenses, travel expenses, home renovation expenses, wedding costs or even for a vacation. Citibank offers personal loan at low interest rates for any online applications. All relevant documentation requirements are nominal, and no-collateral is required. Top-up option is made available with all Citibank Personal Loans according to your eligibility.

Below is the list of Citibank Personal Loan eligibility criteria.

Eligibility Criteria:

• Aged between 26-60 years
• Minimum ₹30,000 per month net income

Capital First is one of the best people’s financial companies to offer personal loan for various needs. This financial company has the record of consistent growth and profitability.

Through Capital First you can avail loan amount up to ₹1,000,000, it offers flexible repayment options up to 60 months, easy repay in EMIs is available. This company offers lowest interest rates as compared to many big banks and lenders. CIBIL score of just 700 is required while others need at least 750. They offer speedy loan approval, credit shield and hassle- free personal loan processing.

Below is the list of Capital First Personal Loan eligibility criteria.

Eligibility Criteria:

• Aged between 21-60 years.
• Minimum ₹24,000 per month net income.

IndusInd Bank is one of the best banks for personal loan. IndusInd Bank has good scrutiny and offers personal loan for genuine applicants. IndusInd Bank has been rated for pretty good service and offer great options to its customers. This bank offers fast service with less interest rate.  It has very transparent and flexible in its eligibility criteria. It is possible to get personal with just 2 days from this bank if you have all necessary documentation and if you meet all criteria. It has fast approval processes with minimal and easy documentation.

IndusInd Bank offers competitive interest rate along with maximum loan amount approval: Indusind Bank also provides an attractive interest rate on each Personal loan. The bank has simple, easy and hassle-free documentation, with an effortless and trouble-free documentation, personal loan staffs of this bank are very customer friendly. The applicant can avail door-door service and make the most use of the convenience. Balance Transfer option at a lower rate is offered to each applicant in case of any existing amount of loan.

Below is the list of IndusInd Bank personal loan eligibility criteria.

Eligibility Criteria:

• Minimum age of applicant should be 21 years in case of salaried & 25 years in case of self-employed professionals. Maximum age limit is 60 years in case of salaried & 65 years in case of self employed professionals.
• Minimum monthly income of the applicant should be at least ₹30,000 in case of salaried & ₹40,000 in case of self-employed.
• Minimum two years of work experience is required in case of salaried. In case of self-employed minimum 4 years of work experience is required.

Kotak Mahindra Bank is the Indian bank and financial service firm that was established in early 1900s. It was known as Kotak Mahindra Finance Limited, which is a NBFC. During February 2003, this Kotak Mahindra Finance Ltd, group's flagship company was provided with license to start banking business by Reserve Bank of India (RBI). Kotak Mahindra Finance Ltd. Convert itself into an Indian bank for the first time. Between 2011 to 2013 years, this bank grew as big as 500 branches, with over 1,000 ATMs. Kotak Mahindra Bank offers personal loan with less documentation and attractive interest rates.

To be eligibile for Kotak Mahindra Bank Personal Loan the applicant just has to be 21 years old and less than 55 years. It doesn’t matter whether you are a salaried or self-employed individual, regular income is sufficient. If you earn the minimum limit of income- simply apply for a personal loan and make your dreams a reality right away.

The loan processing can take as low as 72 hours of time for approval & disbursement of the amount. The bank has flexible loan payment for salaried as well as self-employed persons. Services offered to the customers are more than up to the mark.

Below is the list of Kotak Mahindra Bank personal loan eligibility criteria.

Eligibility Criteria:

• The applicant should be a resident of India.
• Minimum age of the applicant should be at least 21 years. Maximum age limit is 58 years.
• The applicant should have minimum monthly income of ₹30,000.
• The applicant should be a graduate at least.
• Applicant should have at least 2 years of work experience.
• The applicant should be the resident of the city at least for one year.

If you are in search of a bank that offers best high-end services to each of its customer, the search ends here with Standard Chartered Bank which has been in existence ever since 1800s. With more than 1700 branches in 70 countries, this bank has employed 87,000 people. Standard Chartered Bank is considered as an universal bank and it operates for corporates and individuals. This bank has primary listing in London Stock Exchange. Whether small or big, each of its corporate and individual customers is given utmost care and attention at all times. This is one of the best banks to avail for personal loan.

Standard Chartered Bank offers wide variety of  personal loans for both Salaried and Self Employed individuals at competitive interest rates without the need of any security / collaterals. Standard Chartered Personal Loan have simple documentation and quick processing. The personal loan repayment options vary from ECS, Account Debits and PDCs.

Below is the list of Standard Chartered Bank personal loan eligibility criteria.

Eligibility Criteria:

• Minimum age of the applicant should be at least 21 years. Maximum age limit is 58 years
• In case of salaried employees applicant should have at least 3 years of work experience with minimum 3 months with current employer. In case of self-employed the business should at least be 3 years old.
• The CIBIL Score should exceed 750.
• Minimum ₹24,000 per month and net income should be ₹30,000 per month if located at Pune, Bangalore, Chennai, Hyderabad and Kolkata.

Tata Capital is a very trusted name and also a leader amongst the NBFCs in India. Tata Capital offers custom solutions for personal loans, keeping in view the customer needs, at attractive interest rates. Tata Capital has a dedicated credit management team, and caters to all segments of salaried employees as well as self-employed individuals.

Tata Capital Personal Loan are designed to meet everyone’s credit needs, which vary from individual to individual. One can avail Tata Capital Personal Loan for the flexibility it offers to suit the needs and financial conditions of people belonging to all walks of life and employment.

Below is the list of Tata Capital personal loan eligibility criteria.

Eligibility Criteria:

• Minimum age of the applicant should be at least 21 years. Maximum age limit is 58 years.
• The applicant should have minimum monthly income of ₹30,000.
• The applicant should be a graduate at least.
• Applicant should have at least 2 years of work experience.

Different financial institutions implement different methods to determine an applicant’s eligibility for personal loans and the maximum they are eligible for.

Generally personal loan eligibility is calculated in two ways, one is Multiplier Method and the other is FOIR (Fixed Obligation Income Ratio). The other method of FOIR depends on the monthly instalment expected to be paid as compared to the net income of the individual.

1. Multiplier Method

Multiplier is the simplest method using a formula:

Loan Eligibility = (Your Net Salary) x (a number from 9 to 18).

This depends on the company you are employed with, is, its stability, growth and turnover.

2. FOIR - Fixed Obligations to Income Ratio

Fixed Obligations denote the fixed monthly payments that you need to make towards your existing debts like existing loans be it personal loan, home loan or a business loan or your EMIs towards your credit card(s).

The formula for calculating FOIR is:

FOIR = (Sum of Existing Obligations / Net Take Home Monthly Salary) * 100

The ratio of your net take home monthly salary and your fixed obligations is FOIR. The maximum FOIR which the lending institutions consider is up to 75%, and that too when the take home monthly salary is very high. The FOIR is calculated in a way that, if your current loan application is approved, your FOIR should not go beyond 75% in case if the monthly income is very high. In the case of normal earning range, the FOIR should not go beyond 50-60% of the take home salary.

FOIR is calculated so that the applicant should have enough money left every month after repayments so that they can for their monthly necessities like rent, food and other daily needs.

Generally, if the existing FOIR is less than 35-40% of your salary, you are eligible (discretionary, as you need to satisfy other eligibility criteria as well). But if more than 50% of your salary is already consumed in monthly repayments towards your existing debts, your chances of getting approved for a personal loan is very less. Only applicants in high salary range have chances to get approved with such a high FOIR and that too only for longer tenures.

FOIR is more popular personal loan eligibility calculation method, which a majority of financial institutions follow in order to determine an applicant’s eligibility. Personal Loans which require more than 6 months for repayments are the ones that are considered through FOIR method.

For instance, if your income ₹70,000 per month, and you have a personal loan running for which you are paying an EMI of ₹5,500 and another car loan of ₹8500 per month. Now, considering the fact that 50% of your income can be paid towards your loans.

Now we have,

50% of 70000 = ₹35,000

Car Loan EMI = ₹8500  

Personal Loan EMI= ₹5500

So, your disposable income for this fresh loan is:

35000 – 8500 – 5500 = ₹21000

FOIR = (8500+5500) / 70000 = 14000 / 70000 = 0.2 or 20%

This implies that the lender will not approve the loan amount, if the monthly EMIs cross ₹21000 even at the longest tenure. If the EMI for the requested loan amount is less than ₹21000, the applicant will have a fairly high chance of getting approved for the loan. This method helps decide how much an applicant can afford to pay as EMIs while paying their other EMIs.

Personal Loans are unsecured loans, which means the lenders do not ask for any kind of asset, whether movable or immovable, as a collateral. The decision of disbursing a personal loan to the applicant is hence dependent on other factors, which determine whether the applicant would be able to repay the loan in a timely manner or not. Since there are no collateral involved, hence the lender is at higher risk, just in case someone runs off with the loan, or declares the inability to repay at any point during the tenor of the loan.

Hence lender has to be double sure about the repayment capability of the applicant before they approve and disburse the requested personal loan. Lenders look for many criteria before sanctioning a personal loan to any applicant. Few never missed factors are here.

Applicant's Age

The younger you are, more is the probability of you getting a personal loan as you have many earning years ahead to repay your loan. General guideline followed by most banks for personal loan for salaried employees is they must be between 21 to 60 years aged. However for self-employed it is between 25 to 65 years.

Employment Stability

This is a very crucial aspect for personal loan consideration. Unless you are salaried and employed for more than 2 years in the current profession or if self-employed minimum 5 years of total tenure of earnings, you will not be considered as eligible. However, this is discretionary and depends on your current company and your annual compensation, if you happen to be employed with a top notch company where you seem to have a stable and promising career ahead.

Credit Rating

Apart from your company’s performance, individual credit rating holds a lot of value. Having good credit rating increases the probability of getting loan with more flexible option on tenure, amount, EMI and interest rates. In case of any default payment records, huge outstanding loan, fraudulent track records, the banks has every right to cancel the personal loan application or charge higher interest rate, to lower their risk.

Financial Situation

It’s not always about the present, the past financial records will also have a great call on deciding whether you are eligible for a personal loan or not. Having good financial records is the key, will eradicate rating issues and will increase the total amount eligibility. Just in case if you had been irregular with your payments with default(s) or been marked as NPA, any lender will refrain from approving the loan as these will indicate that you are not credit worthy.

Employer

The employer with whom the applicant is working with is the best way to gauge the credibility of the applicant. Being a part of reputed and high turnover companies is an asset when it comes to applying for personal loan, as their employee’s growth is promising.

Why was My Personal Loan Application Declined?

Finance Buddha provides you the facility to check your personal loan eligibility online using our Eligibility Calculator. It is a very simple and easy to use tool which tells you instantly the Bank / NBFC where you are eligible to get a personal loan and also shows the best offer available for you. Our personal loan eligibility calculator gets you the estimate of the loan amount you are eligible for and at what interest rates for what tenure. All you need to do is to provide just a few basic details and our eligibility calculator will show you the best personal loan offer available for you instantly.

Why should you use our Eligibility Calculator?

The desired personal loan amount depends on the need and wish of the borrower. However the actual amount that someone can get depends on their personal loan eligibility. Personal Loan Eligibility depends on multiple factors, and the final decision of lending or rejecting depends on the lender, after they have verified all the details of the applicant. However in some cases the applicant might just not eligible at all for multiple reasons like the applicant’s age below the minimum age requirement of the lender. Hence it would be a wise thing to do to check the eligibility in advance before applying.

Some applicants might have preferred lender, with whom they would like to apply for personal loan. However there might be a better offer available from another lender, which the applicant might not even be aware of.

You can use our personal loan eligibility calculator to work out different loan amounts and different repayment options of interest rates and tenures so that you can know and analyse what would work out best for you. Our calculator shows you in advance the repayment amounts, hence enabling you to plan your finances accordingly, even before you apply for personal loan.

Benefits of using Eligibility Calculator

It takes less than one minute to check personal loan eligibility using our calculator. Now let’s have a look at the benefits of using our personal loan calculator.

1. Best Offer: Based on the inputs from the applicant our eligibility calculator shows the best offer available. The best offer will have the highest loan amount, lowest interest rates longer tenure and lowest processing fees. This might be different from the initial choice of the applicant, or it would provide a benchmark to the applicant without any preconceived notions. The best personal loan offer is one which not only satisfies the credit requirement of the applicant but also provides maximum saving on the loan.
2. Comparison: Once the applicant provides all the required inputs, our calculator will show a list of the lenders and their custom personal loan offers based on the inputs. Hence it gives the applicant, additional knowledge on the offers available for them. This makes easy to see all the available offers from different lenders and compare them in one place, thus eliminating the need to visit each lender and know the individual eligibility.
3. Ease of Use: Finance Buddha’s Personal Eligibility Calculator is very quick, simple and easy to use. All you need to do is to provide basic details like Net Take Home Salary, Existing EMIs, Company Name and the desired loan amount, and based on the details provided the calculator shows all the offers available for the applicant.
4. Loan Amount: You can use the Finance Buddha Personal Loan Eligibility Calculator to check the maximum personal loan amount you are eligible for. Even though you might be eligible for a personal loan, but you might not be eligible for the loan amount you are looking for or maybe eligible for even a higher loan amount that you did not expect. Finance Buddha Personal Loan Eligibility Calculator will show you the maximum loan amount you are eligible for.
5. Time Saver: Our eligibility calculator is very simple and easy to use, and it takes less than a minute to know your eligibility in comparison to visiting each lender and finding out your eligibility. Apart from that, the option to try out the various combinations of the loan amounts and tenures and see the best offer across all lenders, which again would be a time consuming if checked with individual lenders.

How to use Personal Loan Eligibility Calculator?

Step 1: To start using our Personal Loan Eligibility Calculator, you need to just provide these basic details:

1. Net Take Home Salary
2. Existing EMIs
3. Company Name
4. Desired Loan Amount

Step 2: Once you have input all the required details, just click on Get Quote to see your personalized loan offers. You can change multiple details to see the updated offers each time with each parameter and find out different available offers for you.

Every time a new value is input, our calculator instantly checks the offers available and lists them out with their details.

Step 3: Once you have found out your best offer, just click on Apply button to start your personal loan application process for your chosen offer.

CIBIL score is numeric value which depends on your financial as well as credit history. It is very important as all the Banks and NBFCS check for this score.

It says everything about your repayments for your previous loan and your financial history.

The CIBIL score ranges from 300 to 900. A score above 700 is considered as a good CIBIL.

A good score means you are having a good credit and financial history. And, you were paying the EMIs of your previous loan on time, without any penalties.

These factors assure a lender that the applicant is loan ready. And, will be on time with the personal loan repayments.

None of the bank would be willing to lend to a person having low credit score. As by doing that they will increase their own risk. And, even if some bank lends to such a person, they will definitely charge more interest rates.

At the same time if you are having a good CIBIL score then you can get a loan easily from your choice of bank. That too, at comparatively lower interest rates.

For having a good CIBIL score you should pay you EMIs timely. Your timely payments will always keep your score more than 700. This will help you in future while taking any loan.

You also should have a right mix of secured and unsecured loans.

Proper Research before Applying

Doing research before you apply for a personal loan is very important as there are many lenders at different rates.

One can research for rates, tenure and for the other charges involved which can affect your total cost of borrowing. To research on this, visit websites of different lenders and compare them. Or, just simply use the application form above to know your best offer.

Checking Credit History & Score

Before you apply, it is very important to check your credit history. This will give you an idea that is it the right time to apply for a loan or not.

A loan application with less CIBIL Score has more chances to get rejected than with a good CIBIL Score. Your CIBIL also gives you an idea about the loan amount that you can receive as the loan amount.

Required Minimum Income

Each and every lender has their own set of eligibility criteria, and income of the borrower are such criteria.

To get approved you should beware of the minimum income required by the lender.

Suppose you apply with a lender who needs a minimum income of ₹25,000, and you apply with a monthly income is ₹20,000. In this case, you may have to face a loan rejection.

Hence, check for the income criteria and apply only if are able to meet them.

Employment Stability

Employment stability is yet another important factor which decides your eligibility. Your employment stability is directly related to your loan repayment capacity.

Lenders generally approve those personal loan applications where borrowers have stable employment. Generally, an applicant with stable employment of a minimum of two years is more likely to be approved than an applicant with unstable employment.

1. Your Current Age should be in the Eligible Range

   It is a fact that the younger you are the more is your earning capacity and hence, to make a personal loan application a hassle-free process the applicant's age should be between 23 to 60 years.

2. Having a Savings Account with the Bank

   Having a savings account with the bank with whom you are applying for your personal loan can make your loan process a hassle free one. It provides lenders with a kind of assistance where they can see all the credits and debits in your account. Moreover, a bank account with the same bank is the most essential for a pre-approved personal loan. The reason behind this is- for a pre-approved loan no documentation is required and money is credited in minutes. For this process, the information used is from the documents submitted at the time of opening the account. Hence, it is very important to have a bank account with the same lender if you want a pre-approved loan offer.

3. Having a Past Credit History

   A credit history is something which a lender also checks for before approving any loan. Your credit history includes all your previous and current borrowing and the repayments done against them. Lenders generally look for this to minimize their risk factor as they are never willing to lend a person who has previously defaulted for any of his loans. Having a clean past credit history always turns a personal loan application to a hassle-free process.

4. Having Higher Repayment Capacity

   No lender wants to take a risk for the repayment of their lent amount. Hence, to minimize this risk and to be safe a lender always looks for a borrower who has a low existing EMIs. Lenders also check or the Income to Debt ratio for this. Generally, an applicant should have a maximum of 40% of his income as a total contribution towards all his debts.

5. Stable Employment with a Registered Company

   Stability in the employment or job provides an assurance to the lenders that the applicant is having a permanent job and hence he / she can repay the loan easily. Employment in a registered company also provides an assurance for a timely salary and hence a timely repayment towards the loan.

6. Salary more than the Required Minimum Income

   If the applicant's salary is exactly as much as the minimum required income, it provides a point for the lenders to rethink, as the applicant is already at the lower borderline and if they are able to find a single or small point against him like low CIBIL or income to debt ratio they will reject the loan application. Hence an applicant having more salary than the required minimum income makes a fast approval of the loan.

7. Having a Proper Place of Residence

   A proper place of residence symbolizes the stability of the borrower. If an applicant is living in a shared flat or PG accommodation it gives an impression to the lenders that in the case of a loan default or borrower turning NPA, it would be almost impossible to trace back the borrower, as PG owners in contrast to apartment owners, generally don’t ask for an address or identity proof.

8. Proper Income Declaration and Tax Payment

   A lender always looks for the salary slip of an applicant if he / she is an employed person otherwise if the applicant is a self- employed IT return forms and tax payment documents are a must which lenders look for. These documents provide a proper income declaration of an applicant and make the personal loan application a hassle-free process.

9. Complete Documentation with the Loan Application

   Documents are the most important thing to avail any loan. Documents provide all the information about the applicant as his original name, address, and income. Without a proper documentation, it is impossible to avail any loan. However, personal loan documentation is minimal and online but still, it should be proper and accurate.

10. Only Genuine Information in the Loan Application

    Providing all the information genuine in the loan application makes the process go easily without any obstacle as the applicant don't need to verify the documents again and again if it is provided is correct in the first attempt. This reduces the time taken in the process and makes the process hassle-free.

Personal Loan application being rejected can increase your woes, especially when your requirement is urgent. And to make it worse, most of the financial institutions don’t even disclose the reason(s) for the rejection. Once the loan application is rejected, it is common practice to apply with another lender in the hope of getting approved. It is highly advisable to analyse and understand first, why was your loan application and then work on improving your chances of getting approved.

Personal loan application can be declined for multiple reasons depending on the different eligibility criteria each institution has. Each and every lender will look for certain factors like age, income, debt to income ratio, credit rating, employer and job stability. The applicant needs to satisfy each and every criterion that lender is looking for, to appear as a creditworthy borrower and get approved for the loan. However, there can be some relaxation in some criteria, if the applicant seems worthy, but approval / disapproval is at the discretion of the loan officer and cannot be argued.

Here are some of the factors because of which a personal loan application can get rejected.

• CIBIL:Your CIBIL report contains a numerical score and remarks from the lender. If in the past you have settled the loan for a smaller amount combining all your EMIs or had your interest rate reduced so as to clear the loan on terms apart from the terms that was agreed upon while applying for the loan, will be considered as a red in your CIBIL report. If your CIBIL report has any comments like loan(s) being "written off” or "settled" or "paid after the due date", a new lender will consider these signs as a warning and reject your loan application.
• Poor Repayment History:Poor loan repayment history indicates that you are not creditworthy and unable to repay your loans properly or have failed to repay properly. As such a new lender would decline the personal loan application so as to reduce the risk of having a probable NPA account in future.
• Errors in Your Credit Report:CIBIL Report errors like payments being reported wrongly, closed accounts still being shown as open or false report of late payments can lead to a drop in CIBIL Score. To reduce such risks, one should often check their CIBIL Report and if any such discrepancies are found, should be resolved immediately. This will not only lead to increase in CIBIL Score but also increase the chances of personal loan approval.
• Too Many Loans and Little Income:While processing a personal loan application, a lender will also check for the ongoing loans and the ration of fixed monthly obligations to the monthly income, this ratio is called FOIR. If FOIR is 50% or more, there are higher chances of personal loan rejection. Higher FOIR indicates that another loan will strain your income and paying for the current loan would get difficult, so the loan will be rejected. The applicant will be considered as a high-risk borrower.
• Job Stability:The lender gives a lot of importance on this point, certain banks insists that the applicant need to work in the current company for 3 years or more to be considered as eligible. Also, if the company’s future is at stake or seem to be unstable, the lender will back out from providing loan to an applicant from that company.
• Loan Application been Rejected Previously: Every loan rejection reduces your CIBIL Score and hence if your loan application has been rejected once, it’s not wise to keep applying and getting rejected as this will get recorded in your CIBIL record.
• Being a Loan Guarantor to Someone: When you are a loan guarantor for someone, the EMI of that loan is considered as your liability. Should that borrower fail to repay, you would have to pay the loan from your income. And if there is a record of you failing as a guarantor in the past, it will reflect in your CIBIL Report and hence you would be denied a fresh loan.
• Residential Address on Blacklist:Even if somebody else living in your address, defaulted on their loan, banks would blacklist that address, and it would be reported to CIBIL. When a new loan application is received from that address, the lender would look up the address and reject the loan application so as to reduce their risk portfolio.

• Identify the reason for reduction in credit score, it could be mainly because of late payments of credit cards, loan EMIs etc. Defaulting and late payment is the core factor for bad credit scores thus ensure to have a good track record at all times.
• Keep in mind to never default any payments in the coming years. Make all payments on time also keep sufficient funds in your account for ECS.
• If you have too many rejections from Credit cards and personal loans, take a break and stop applying. This will help in bringing up the score and then re-application will be processed.
• Loans getting close to tenure completion are great news! But don’t make use of this chance to apply for a new one. It is advisable to give at least 3-6 months break before applying for a fresh one.
• Remember to always keep sufficient balance in your credit cards; this will help in analyzing proper credit utilization. Using too much or too less of credits is not a great sign.

It is also essential to keep in mind; every bank branch manager has discretionary power to decide the eligibility despite of any eligibility criteria.