A common misconception among salaried employees is that a modest income disqualifies people from being able to access loans. The truth is, with the right approach and understanding of the process, securing a Personal Loan with a minimum monthly income of ₹20,000 is entirely achievable!
Let's understand how you can avail of a loan with a ₹20,000 salary, the eligibility, features, and application process. So, let's get started!
Can You Get a Personal Loan with ₹20,000 Monthly Salary?
Yes, you can get a Personal Loan with a monthly income of ₹20,000, although the loan amount and conditions may depend on factors such as your credit score and current financial commitments. Many lenders provide loans in this income range, as long as the eligibility requirements, like having a steady job and a solid credit history, are fulfilled.
Let's understand the eligibility criteria, factors affecting these criteria, and application processing in the upcoming sections.
Features and Benefits of a Personal Loan for ₹20,000 Salary
Here are some features and benefits of a Personal Loan:
- Unsecured Loan: Personal loans are unsecured, which means you don't require any collateral to avail of the loan.
- Minimal Documentation: The loan requires you to submit only a few documents, such as identity proof, address proof, and income proof.
- Flexible Tenure: The loan comes with flexible repayment tenure. You can tailor your repayment tenure as per your budget or repayment capacity.
- Simple Eligibility Criteria: The eligibility criteria of a Personal Loan are simple and require you to qualify the age, citizenship, employee status, income, etc.
- Attractive Interest Rates: A Personal Loan comes at an attractive interest rate, making it easier for you to repay the borrowed amount.
What is the Personal Loan Eligibility Criteria?
The common Personal Loan eligibility criteria include:
- Age: Most lenders prefer applicants within a working range of 21 and 60 years.
- Citizenship: Must be a resident of India.
- Employment Status: Minimum one year of job experience and minimum one month of stable employment with current employer.
- Credit Score: A healthy credit score is preferred, often above 750, though final decisions vary by lender.
- Income Stability: Regular monthly income credits in a bank account.
- Minimum Income: Monthly salary of at least ₹30,000, though this again depends on the lender.
Some NBFCs and banks may offer solutions for people with low CIBIL scores, while others will scrutinise your existing financial obligations, like loan repayments and credit card debts. Ensure you confirm the details of each specific eligibility criterion with different lenders while doing your research.
Factors Affecting Personal Loan Eligibility and Loan Amount
Multiple factors can affect Personal Loan eligibility and loan amount. But here are some common factors you must be aware of:
- Credit Score: Having a good credit score, ideally 750 and above, can help you avail of a high loan amount and better interest rates.
- Existing Financial Obligations: To determine your loan repayment capacity, the lender goes through your existing loan repayment and credit card debts.
- Employment Stability: Your chances of loan approval increase when you have a stable job with a good employer.
Personal Loan Eligibility Checker
Unsure about where you stand? Get a better understanding using a Personal Loan eligibility calculator; it helps check eligibility and assess the maximum loan amount based on income, expenses, and ideal repayment tenure.
Documents Required for Personal Loan Application
Whether a bank or an NBFC, all lenders will need certain documents to analyse your profile and verify your identity and income. Keep all these documents ready before applying, since it can help you speed up the loan approval process. These essential documents typically include:
- KYC Documents: Aadhaar Card, PAN Card, Voter ID, Passport, recent passport-sized photographs, utility bills
- Financial Documents and Income Proof: Recent salary slips from 1-3 months, bank statements from 3 months, ITR returns
- Employment Proof: Office email ID, PF statements, or office ID card
Personal Loan Application Process
Applying for a Personal Loan is a straightforward process. Ensure you follow the steps listed below for an easy application and quick approval:
Step 1: Research and Compare
Before you apply for a Personal Loan, compare factors like interest rates, typical loan tenure, processing fees, and eligibility criteria across lenders. Many banks offer Personal Loans with flexible terms and competitive interest rates, while others have minimal documentation. Also, look into estimating your EMI amount using an online Personal Loan EMI calculator. Finally, check if you qualify for any pre-approved loan offers from your existing lender.
Step 2: Check Your Eligibility
Once you’ve narrowed your selection to a few lenders, check Personal Loan eligibility metrics across all of them. The criteria will vary depending on what the lenders choose to prioritise; while one will insist on a CIBIL score above 750, others may emphasise employment stability more.
Step 3: Organise Your Documents
All lenders will have a list of required and supporting documents to be submitted during the loan application process. These typically include your KYC documentation, recent salary slips, address proof, and employment details. Keep them handy before you apply.
Step 4: Loan Application
You can apply either in person at your nearest branch or via the lender’s official website. We’d recommend opting for online application processes, as with the use of technology, most lenders have a smooth and hassle-free process.
Now is where all your documentation comes in handy; fill out your form, and upload clear scanned copies of all your required documents.
Step 5: Loan Verification
Now, your application is in your lender’s hands. Lenders typically process Personal Loan applications quickly, often within 24 hours. In some cases, you could get an instant Personal Loan post an inspection of your basic information. Lenders may conduct a telephonic or in-person interview if they deem it necessary to get confirmation on your identity and employment.
Step 6: Disbursal and Management
Once your application has been given the green light, the lenders will disburse the money directly into your bank account. From this point, you need to ensure that you’ll responsibly handle your repayments. Timely EMI payments help you keep a strong credit score and avoid late penalties, so ensure you have a plan in place.
How to Improve Your Chances of Loan Approval
Here are some tips for improving your chances of loan approval:
Check Your Credit Score
Your CIBIL score plays a very important role in getting loans; it can impact your eligibility for perks such as lower interest rates and even determine whether you can get approved (or rejected) for a loan. Working towards a good credit score helps boost your chances of approval.
A score above 750 is generally considered a good credit score; anything below that could mean trouble. Before you apply for a loan, check your CIBIL score online to understand if you need to do some damage control first.
Build Your Credit Profile
If you're new to credit or have a limited credit history, consider starting with a secured credit card. Reduce existing debts if you have them, pay all your bills on time, and be regular with payments to build a positive credit footprint.
At the same time, manage your monthly expenses to ensure your savings account has some deposits consistently maintained. This will help you get a higher credit score, in turn helping with hassle-free loan disbursal.
Time Your Application
Since your application takes into account your employment status and overall loan eligibility, it’s advisable to apply once you’re in a stable job. If you’re considering shifting jobs, keep in mind the impact it could have on your application approval.
Most importantly, be completely honest and accurate in your application details. Misleading your lenders in any way, including any inconsistencies between your stated income and your bank statements, is likely to lead to an instant rejection.
To Conclude
Securing a Personal Loan with a ₹20,000 monthly salary needs patience, preparation, and enough research to choose the right lender. By understanding the eligibility parameters, picking a lender with ideal financial solutions, and presenting a complete application, you can access the funds you need.
At Poonawalla Fincorp, our aim is to make the process of accessing loans as smooth and hassle-free as possible. We offer Personal Loans with attractive interest rates. Contact us today to understand how you can apply.
Frequently Asked Questions
Can I Get a Personal Loan With a ₹20k Salary?
Yes, many banks and NBFCs offer Personal Loans for people earning ₹20000 a month. Traditionally, a higher income and lower existing debts improve the chances of securing a larger Personal Loan. Today, these are no longer the only valid criteria to secure a loan, making funds more accessible.
How Much Loan Can I Get on ₹20000 Salary?
The amount of Personal Loan you can secure with a Rs. 20,000 salary can vary based on the lender's criteria. Typically, you can get a Personal Loan within the range of ₹50,000 to ₹3,00,000, but the exact amount depends on factors like your existing debts and credit score.
What are the criteria that should be met when applying for a Personal Loan?
There are certain parameters that you should fulfil when applying for a Personal Loan, like minimum age, minimum net monthly income, secure employment history, good credit history, and no existing debts or outstanding loan amounts. You should also be able to show identity proof (Aadhaar or PAN card), address proof (Aadhaar card or renter agreement), and proof of stable employment.
How to get Rs 20,000 instantly?
The best way to get ₹20000 and receive much-needed financial support is to apply for an instant Personal Loan. First, use a Personal Loan eligibility calculator to understand your borrowing capacity and reduce the chances of rejection. Other things that could help are applying with a co-applicant, having a good debt-to-income ratio, and having a high net monthly income.
What financial aspects should to consider when applying for a Personal Loan?
Here are some financial basics to keep in place when applying for a Personal Loan: maintain a good credit score, manage your current financial obligations to show responsible fund management, and maintain a stable income and low debt-to-income ratio.
What is a good credit score for availing of a Personal Loan?
A credit score of 750 and above is considered a good credit score for availing of a Personal Loan.
Can I use a Personal Loan eligibility calculator for free?
Yes, the Personal Loan eligibility calculator from Poonawalla Fincorp is free of cost.
About the Author
We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Loan disbursal is at the sole discretion of Poonawalla Fincorp.
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