Personal Loan for Freshers
Are you a first-time borrower seeking a personal loan? The loan process is easy, provided you meet all the eligibility criteria. This guide on a personal loan for freshers explains all the eligibility criteria and documents you must know.
Why Use a Personal Loan for Freshers?
Using a personal loan as a fresher could be an apprehension, especially if you are new to banking and finance. Here is everything you need to know about using a personal loan as a fresher.
- A personal loan is an unsecured loan if taken without collateral. The interest rates are moderate, ranging from 10% to 20% per annum.
- You would need a good credit score of 700 and above to get your loan application approved.
- You get a long repayment tenure of up to a maximum of 8 years.
- It’s a multipurpose loan you can use to finance your home renovation, marriage, education, travel, and medical emergencies.
- If you were to do a timely repayment of EMI, it would strengthen your credit profile.
Eligibility Criteria for Personal Loan for Freshers
These are the core eligibility criteria you need to fulfil for a personal loan for freshers.
- Age – Generally 21 to 60 years.
- Employment – The borrower either must be a salaried or self-employed individual and have a stable source of income.
- Minimum Income – Borrowers should have a typical minimum monthly income of ₹15,000. However, there are some lenders that may offer lower amounts for lower salaries.
- Work Experience – Some lenders require a minimum work experience of 1-2 years, while some lenders offer an instant personal loan for freshers with 3-6 months of service.
- Credit/CIBIL Score – Lenders prefer a CIBIL score of 700 or above.
*Note: Remember that the eligibility criteria change depending on the borrower’s profile and the lender’s policy.
Personal Loan for Freshers with a Low Credit or No Credit History
Borrowers can still access a personal loan with no credit or low credit history. To increase approval chances, you can do any one of the following:
- Apply with a co-applicant – You can apply with a co-applicant who has a good credit history and financial profile.
- Secured loan options – When applying as a fresher, you can go for options like gold loans. Since gold is used as collateral for the loan, the approval chances increase.
- Compare Lenders – There are lenders who focus on income and employment status. Target those lenders.
- Apply for a small loan amount at first – try to apply for a small-ticket loan first to increase approval chances.
TIPS:
- Try to keep a low debt-to-income ratio to show high repayment capacity.
- Avoid applying to multiple lenders. It would damage your credit score.
Documents for Personal Loan for Freshers
Applying for a personal loan for freshers will require a set of essential documents.
- Identity Proof – KYC documents like PAN Card, Aadhaar Card, Passport or Voter ID
- Income Proof
- For salaried individuals — Last 3 months’ salary slips.
- For the self-employed — Last 6 months’ bank statements, IT returns (ITR) for the last 2-3 years, or GST documents.
- Bank Statement – Last 3-6 months’ bank statements showing salary credit for salaried employees.
- Employment Proof – Employment ID Card or joining letter for salaried employees.
- Business Proof – Business Registration, Shop Establishment Certificate for self-employed individuals.
**Note:** Documents may vary depending on the lender’s policy and the borrower’s profile.
Conclusion
A personal loan for freshers is possible in India. You can look for relevant lenders who match your needs and profile. Unless it’s necessary, try to apply for small loan amounts instead of going for a bigger loan amount that comes with a higher interest rate. With proper strategy and diligent research, you can find a lender to match your financial profile and eligibility criteria.
