How Can Your Employment Affect Your Personal Loan Eligibility

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How can your employment affect your personal loan eligibility?

Personal loans are the best option when you have to tide over a financial emergency. However, before you decide on taking a personal loan, it’s important to consider whether you are eligible for it. And did you know that your employment can also impact your personal loan eligibility in this matter? Yes, you read that right! So, here are all the details of how employers affect your eligibility to get a personal loan.

Do lenders consider employers before approving a personal loan?

Lenders may consider your employer when assessing your personal loan eligibility. In this case, they will consider how long your employer has been in business, the general reputation of the company, the total number of permanent employees, and so on.

As such, a company with a great market reputation, stable earnings, a sizable number of permanent employees, and years of being in the business will be favoured by the lenders. Being an employee of such a company might get you a longer loan tenure or a better personal loan interest rate.

How does your job affect your personal loan term and interest rate?

Since personal loans are basically unsecured loans, the lenders do all they can to make sure that the borrower doesn’t default on paying up the loan. Considering the nature and status of your employment is one of the safety checks they run.

Keeping that in mind, here are the factors that can impact your eligibility for a personal loan:

1. Duration of employment:

It will be much easier for you to get a loan if you have a couple of years of work experience. Per se, it is hard to get a good personal loan interest rate when you are without a job. The lenders would be more ready to give you a loan if you are currently working.

2. Monthly salary:

The basic idea is to earn enough to meet the monthly EMIs of your personal loan. So, your disposable income can be up to Rs 30,000 per month, whether you are salaried or self-employed individual. As long as you can pay the EMIs according to the loan amount and tenure, you can get the loan.

3. Work status:

As mentioned before, your job security is a major factor for banks agreeing to let you have the loan. So, a permanent employee will find it easier to secure a personal loan compared to a part-time or contractual employee. A stable source of income and a well-reputed employer are the things that can work in your favour.

4. Salary proof:

It can be an issue if you get your monthly salary in cash. A lender will ask you to show proof of your monthly salary before sanctioning the loan. Thus, you either need to show salary slips or the bank statement of salary being credited to your account every month.

5. Employer’s profile:

A lender gives a greater preference to established, high-net-worth companies compared to SMEs and start-ups. Such excellent financial records of the employer are associated with better job security and higher salaries. Of course, employees from SMEs and start-ups can get personal loans as well. In that case, the other factors of the borrower’s employment status are taken into consideration.

The endnote

So, now you have a clear understanding of how important your employer can be for your personal loan eligibility. Now, let’s make getting a personal loan easier for you – get in touch with ICICI Bank for a personal loan right away! You will get varied types of personal loans to choose from, based on your needs and current financial situation. With the facility of Insta Personal Loans to select few eligible customer, one can avail Insta Personal Loan online within minutes. Contact the bank to know more!