The impact of age on the interest rate of personal loans is somewhat indirect. Lenders usually tend to offer a lower interest rate to salaried applicants between 30 and 50 years. This is mainly because of a stable source of income and professional work experience.
Younger applicants may not have a lot of experience with finances. Hence, it can become challenging for them to manage their money and pay the premiums on time effectively. So, they usually sanction their loan at a higher interest rate such that they can pay it off at the earliest.
However, lenders often tend to sanction personal credit at higher interest rates to individuals with ages beyond 50 years. This is because they have only a limited number of working years left. Hence, creditors want them to pay off their loans before their retirement.
Effect of age on amount of personal loan
Lenders usually sanction an increased loan amount to people of lower age compared to people of higher age. This is mainly because younger people usually have a longer working duration left. Hence, they can opt for a longer period to pay off the loan in easy instalments.
However, individuals with ages beyond 50 years usually do not have many working years left. Hence, it can become difficult for them to pay off the higher EMIs to repay the loan before retirement. So, prior to taking a loan, you can calculate the amount that you are eligible for using a personal loan calculator. This would help in getting instant credit approval from the lenders.
Effect of age on the tenure of personal loan
Creditors prefer that borrowers pay off their loans before they retire. This is because they have a continuous inflow of cash that helps them gather enough funds to pay the EMIs on time.
However, after retirement, there is a limited amount of money from which they will have to repay credit. So, lenders usually offer longer loan duration to people with a lower age when compared to people who are 50 years of age or beyond.
Viewing these impacts, it becomes highly essential to check the eligibility criteria before moving forward with the application process.
Eligibility criteria for a personal loan
- You should fulfil the following eligibility criteria to get approval for a personal loan :
- You must be a citizen of India
- You must be above 21 years
- You must have a minimum work experience of 2 to 3 years
- It is mandatory to have a good credit score, it should be 600 or above
- Your minimum monthly income should be Rs. 15,000
- New applicants should have an NTC score above 150
- You should be either a salaried or a self-employed individual
- Once you tick all the eligibility criteria boxes, you can proceed with the application for a personal loan.
Steps to apply for a personal loan
Below are some hassle-free steps that you can follow to apply for a personal loan:
Step 1: Navigate to the official website of the financial institution
Step 2: Move to the personal loan application page
Step 3: Click on the ‘Apply Now’ button
Step 4: Enter the required details accurately
Step 5: Input the loan amount and tenure as per your requirement
Step 6: Upload all the necessary documents that you will need
Step 7: Verify all the information that you are entering
The financial institution will go through all the details to ensure they are authentic. Once done, you will receive the money within 24 hours in your account. Moreover, you can keep all the essential documents ready to avoid any errors.
Necessary documents required for application of a personal loan
Below are some essential documents that are necessary while applying for a personal loan:
- Income proof documents like salary slips for the last three months and bank statement
- Identity proof documents include an Aadhaar card, PAN card, and Voter’s ID card
- Address proof documents like Voter’s ID, Aadhaar card, driving licence, electricity bill, passport, telephone bill and so on
There are several ways in which you can use a personal loan when in need of funds.
Uses of a personal loan
The uses of a personal loan are as follows:
- Travelling abroad: Everyone has a dream destination that they want to visit along with their loved ones. You can use a personal loan to effectively manage the associated expenses of the tour like hotel bookings, purchasing flight tickets and so on.
- Covering medical costs: At times, an enormous need for funds arises for the treatment of some serious conditions. Under such circumstances, if you do not have health insurance, you can quickly take a personal loan to cover the medical costs.
- Renovating your home: Revamping your dream home can call for excess monetary requirements. For this, you can get a personal loan such that there is sufficient money to serve your purpose.
- Financing a wedding: Sudden expenses can arise while planning a wedding. Under such circumstances, you can go for a personal loan to get access to funds without the requirement of collateral.
- Funding higher education: The course fees required for higher education can be enormous at times. On such occasions, you can get a personal loan to cover the course fees and build a career of your choice.
- Purchasing expensive gadgets: Buying an expensive watch, cell phone, or a home theatre system can be on the bucket list of many. For this, you can get a loan so that there is the immediate availability of funds.
Now that you know how age impacts your personal loan eligibility, it is essential to calculate it before applying for a loan. This ensures that the lenders will approve your application for credit. Moreover, you can also cross-check the information and documents that you are providing during the process. Otherwise, it can lead to the rejection of the application and subsequent lowering of the CIBIL score.
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