When we are just starting out careers in respective fields, one of the most common challenges all of us suffer from is struggling to make ends meet, mostly due to the fact that our monthly income is less. However, in situations such as these, oftentimes, we might require loans to finance a particular emergency, but sadly the industry in India is such that most lenders prefer to give out loans to only those who have a handsome income.
While this obvious choice might make less sense on the surface, in reality, if you think from the perspective of a lender, this is a wise decision since the first priority for lenders is to minimize the risk on their loans and if the borrower has a modest income a lot of it is countered.
However, this does not rule out the fact that individuals who have a monthly income of less than ₹15,000 are often the ones who need financial assistance, and thus in today’s article, we will discuss in detail how you can secure a personal loan even with a salary of ₹15,000 or less.
Without further ado, let’s get started.
Understanding the Requirements
One of the first steps you need to take in order to secure a personal loan with a salary of ₹15,000 is first to understand the various eligibility requirements lenders regularly want borrowers to meet.
Although the exact requirements might vary between lenders, the main constituents remain the same, and mentioned below is a rundown of the most significant ones.
- Borrowers must be between the legal age of 21 years and 57 years.
- Borrowers must have a monthly in-hand income of ₹13,500.
- The salary of the borrower needs to be mandatorily credited to their bank accounts and not paid in cash.
- Borrowers must have a CIBIL score of 600 and Experian Score of 650 on a scale of 900.
As is evident from the above list, the eligibility criteria for most lenders is quite straightforward, and in most cases, they actively encourage borrowers with less income to apply, such that they can successfully secure the finances they need.
Thus, if you want to increase your chances of getting a personal loan with a lower salary, you need to ensure that you meet all these criteria.
Next to meeting the eligibility requirements of the lender, as a salaried individual, you will need to present certain documents to the lender in order for your application to get approved. Some of the most significant of them are as shared below.
- Identity proof in the form of PAN Card, Aadhar Card, Driving License, Voter ID Card, and Passport. Either of these documents in electronic format will be sufficient.
- Address proof in the form of Aadhar Card, Voter ID card, or Utility Bill.
- Income proof in the form of latest salary slip and last 3 months bank statement of salary account. In certain cases, the lender might request last 6 months bank statements as well, so keep this handy. Additionally, keep your last 3 years ITR filings ready, in case the lender inquiries for the same.
How to Increase Your Chances of Getting Approved?
Now that you know the eligibility criteria as well as the documents required for getting a personal loan with a salary less than ₹15,000, mentioned below are some tips to increase your chances of getting approved.
Irrespective of the lender you apply at, one of the first things they will check is your credit score. Your credit score can be simply understood as being a numerical value that is assigned to you by the credit rating agency after taking into consideration your credit history. In India, there are two main credit rating agencies, CIBIL and Experian, and they take into account the following four factors to calculate your credit score.
- The number of loans you have taken in the past
- The total amount of credit you have utilized in the past
- The total number of timely payments you have made
- The total number of late payments you have made
Taking all these factors into account, you are given a credit score on a scale of 900, and the higher your score, the more will be your chances of getting approved.
If you are planning on taking a personal loan with an existing salary of ₹15,000 or less, a rule of thumb to consider is to have no ongoing EMIs. Lenders across the country take into account a basic rule to determine your eligibility for a lending instrument, and it dictates that at no point the sum total of your existing EMIs should be more than 40% of your monthly in-hand income. This measure is imposed to ensure that the chances of a default are minimized, and you can better plan your personal finances.
Thus, another tip to increase your chances of approval will be to have no going EMIs during your application period or close all your EMIs and then apply for a new one.
Application at Multiple Lenders
When you are in a financial emergency, it is easy for you to get intimated and apply at multiple lenders, with the hope that you will get approved by at least one and while this effort might appear disarming at first glance, over the long term, it could have a significant negative impact on your approval rating.
The reason behind this is simple: every time you apply with a new lender, they conduct a credit assessment and thus enquire about the credit bureau for your latest credit report, and each of these requests is treated as a hard inquiry. Now, as a rule of thumb, you should always make an effort to keep your hard inquiries below 2 a month because anything more than this might lead to a decrease in your overall score.
Getting a personal loan with a salary of less than ₹15,000 might appear difficult at first; however, if you choose the right lender, you can get approved in a matter of minutes. Now that you know of the process, go ahead and apply for a personal loan today.