How to Increase Your Personal Loan Eligibility Without Salary Hike

Increasing the chances of a Personal Loan approval isn’t only about your monthly income. While a higher salary is always appreciated by lenders, it’s not the only way to increase your personal loan eligibility.

Banks and NBFCs also assess factors like your credit score, existing monthly obligations, income stability, and, most importantly, your repayment history. So even if you haven’t received the desired hike, you can still improve your personal loan eligibility by taking control of these associated factors.

In this read, we’ll explore the factors that empower your credit profile and increase your Personal Loan eligibility apart from a salary hike. Read on to know more!

Improve Your Credit Score

Your credit score is one of the first checks along the journey of determining your Personal Loan eligibility. Ideally, you should have a minimum CIBIL score of at least 750 to be eligible for a Personal Loan from top banks and NBFCs in India.

Since the credit score is an indicator of your overall creditworthiness, a higher credit score always helps increase your Personal Loan eligibility even without a salary hike. On the other hand, a lower score is a repellent to quick approval of your loan application.

Tips to Build a 750+ CIBIL Score

• Maintain a solid repayment history. Never miss or delay payments.
• Always keep your credit utilisation below 30%.
• Avoid applying for multiple loans or credit cards frequently.
• Report and resolve errors in your CIBIL report.
• Maintain a healthy mix of credit products (loans and credit cards).
• Keep old credit accounts active to build a longer credit history.

Lower Your Existing Financial Obligations

Reducing your monthly obligations (particularly your existing debts) can improve your Personal Loan eligibility significantly by increasing your disposable income. Lenders assess this as FOIR, i.e., your Fixed Obligation to Income Ratio.

The higher your existing monthly obligations are, the higher your FOIR gets. For banks and NBFCs, a higher FOIR value is an indicator of poor repayment capacity. Reducing your existing monthly obligations helps you get your FOIR value lower and increases your Personal Loan eligibility over time.

Also Read: What is FOIR in Personal Loan & How to Calculate It

Borrow According to Your Repayment Capacity

When it comes to assessing your repayment capacity, another important metric for lenders is your Debt-to-Income Ratio. Ideally, your net debt should not be more than 40% of your net income. Deviation from this increases the chances of Personal Loan rejection.

A little consideration will also show why it is also important to apply for an ideal loan amount that you can conveniently repay without affecting your current DTIs.

Opt for a Longer Loan Tenure

While applying for a Personal Loan, go for lenders that offer benefits like flexible tenure and opt for a longer tenure. A longer tenure reduces the monthly EMI amount, thereby lowering your monthly obligation.

With lower monthly obligations, your FOIR and DTI values become more acceptable for lenders, leading to a direct increase in your Personal Loan eligibility.

Avoid Multiple Loan Applications

Avoid applying for new loans and credit cards frequently, as this has a significant adverse impact on your credit score. Frequent and multiple loan applications within a short time are a red flag for lenders.

When determining your Personal Loan eligibility, lenders often look at the recent applications component of your credit profile. Multiple applications within a short time showcase financial struggle and affect Personal Loan approval.

Apply with a Co-Applicant/Guarantor

If you’re unsure about your Personal Loan eligibility, then applying with a spouse or a parent as a co-applicant is a great way to increase your eligibility. This is particularly helpful in cases where you might have a low income or fluctuating monthly income.

Applying with a co-applicant can reduce the lender’s risk and help increase your Personal Loan eligibility.

Showcase Stable Income and Employment

Whether you have a stable source of income is a key factor determining Personal Loan approval. This is why banks and NBFCs ask for a minimum monthly salary and a minimum working tenure as proof of stable income and employment.

The chances of a Personal Loan approval, therefore, automatically go up when you are an applicant with a stable monthly income of ₹30,000 or more and a record of consistent employment for the past 2/3 years.

While the actual minimum monthly income and employment tenure may vary from lender to lender, these are indispensable to increasing your Personal Loan eligibility with any lender.

To Conclude

Increasing your Personal Loan Eligibility is not tied just to your monthly income. When it comes to determining eligibility, your creditworthiness, repayment history, and existing debts, all come into consideration. On the brighter side, with appropriate financial discipline, you can take control of these factors and drive your Personal Loan eligibility for faster loan approvals.

Check your Personal Loan eligibility with Poonawalla Fincorp and apply online in just a few taps. Get instant approval for up to ₹50 Lakhs at competitive interest rates. Repay conveniently with flexible EMI tenure for up to 84 months for salaried employees. Apply now!

Frequently Asked Questions

How can I increase my Personal Loan eligibility without a salary hike?

You can increase your Personal Loan eligibility even without a salary increase by maintaining a 750+ CIBIL score, lowering your existing financial obligations, avoiding frequent multiple loan applications, and showing a stable source of income & employment. You can also apply with a co-applicant/guarantor.

Can I get a Personal Loan if I am not salaried?

You can get a Personal Loan even if you’re not a salaried individual, although the exact eligibility criteria can vary from lender to lender.

How do I check my Personal Loan eligibility?

Personal Loan eligibility may vary from lender to lender, and one of the best ways to check it is by visiting your chosen lender’s website. Ideally, you should have a minimum CIBIL score of 750 or more, with reasonable existing obligations and an excellent repayment history.

What documents are required to get an urgent Personal Loan?

While the exact list of documents required for a Personal Loan may vary from lender to lender, ideally, you must provide KYC documents like PAN, Aadhaar, etc., address proofs, income documents, financial documents and proof of employment.

How much Personal Loan can I get as a salaried individual?

Poonawalla Fincorp provides up to ₹50 Lakh Personal Loan to salaried individuals. However, the final approved loan amount depends on a variety of factors, including your creditworthiness, existing obligations, repayment history, as well as other internal policies.

What is the minimum monthly salary required to avail of a Personal Loan?

Lenders specify the minimum monthly salary required to apply for a Personal Loan. To avail of a Personal Loan for salaried individuals from Poonawalla Fincorp, you must have a monthly salary of ₹30,000 or more.