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09 MARCH, 2022
It is no longer a secret that personal loans are one of the easiest means to arrange funds for your varied needs. With a personal loan, you can finance any of your personal needs, be it house remodeling, medical expenses, vacation, child’s education, debt consolidation, or even your marriage. It is easy to apply, has quick approval and is unsecured. All these benefits make it a preferable option for getting funds instantly. However, to get a personal loan, you must fulfill the eligibility. Before you avail a personal loan, you must check your eligibility to avoid rejections. One of the eligibility criteria is your employment history and company status. Did you know that your job profile can affect your personal loan eligibility? Learn more below.
What are the personal loan eligibility criteria?
To get approval for personal loan, you need to fulfill the following eligibility criteria:
Apart from these criteria, your employment status is crucial too. Many lenders require you to be employed with reputed private organizations or government organizations to be eligible for personal loans. They also require you to be employed in the current organization for at least two years consequently.
How does your employment history affect your personal loan eligibility?
Your unstable employment history and company status can lower your personal loan eligibility and the lender can reject your personal loan application and deny you the loan. Even if your application is accepted, the lender can charge you high-interest rates and lower loan amounts than you apply for.
Why does your employment history affect your personal loan eligibility?
A personal loan is an unsecured loan, which means you need not furnish any collateral or security to avail a personal loan. Lenders bear a higher risk in lending an unsecured loan. Therefore, by considering the employment history, they review your source of income. A borrower who has a stable job profile and a steady source of income is less likely to default on his/her EMI payment. Moreover, it also means that you have a regular source of income and will pay your EMI timely.
Lenders also check the organization you are employed with. They prefer borrowers employed with multinational companies, PSUs, state or central government, etc. These organizations provide job security and usually do not indulge in bankruptcy or layoffs, which makes the borrowers, pay EMIs timely.
The bottom line
Your personal loan application could be rejected even if you have a good credit score but an unstable job. If you have just joined a company or are working in a start-up, you might face challenges in availing a personal loan. Therefore, in order to avail the loan offering, ensure that you do not change your job frequently and stay for a longer period in your company.
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