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The impact of your age on personal loan eligibility
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Age is an important parameter impacting your eligibility for a personal loan. It affects your personal loan interest rate, repayment tenure, and loan amount. Thus, it is important to figure out its impact and accordingly devise a well-planned approach before you hit on the personal loan apply button. Read on to understand how your age impacts your personal loan eligibility.
1. Impact on personal loan interest rates
Generally, lenders tend to provide a lower rate of interest to salaried applicants ranging anywhere between 21 and 50 years. This is majorly because of the presence of a stable income source.
In contrast, older individuals approaching retirement and those over 60 years of age might not be offered a lower rate on a personal loan. This is because their source of income is uncertain, which makes them a high credit risk individual for the lenders. A lender usually charges a higher interest rate to compensate for the high credit risk.
2.Impact on personal loan proceeds
Lenders generally approve higher loan proceeds if you are young i.e., in your 20s or 30s. This is because younger individuals have more working years left ahead of them. Hence, they can consider a higher repayment tenure to repay their loan in smaller instalments.
However, those over the age of 50 years generally do not have many working years left and are closer to retirement, making it tough for them to repay a higher EMI amount. Owing to this reason, many lenders tend to offer older individuals lower personal loan proceeds.
3. Impact on personal loan repayment tenure
In the same way that higher loan proceeds are usually approved for individuals with more income-earning years left ahead of them, a longer repayment tenure too is mostly approved for those in their 20s and 30s.
However, post retirement, there tends to be limited income sources from which a person can repay their debt. So, lenders may often not approve long repayment tenures for individuals over 50 years.
Considerations other than age
Besides your age, there are other important parameters that lenders tend to check to determine your personal loan eligibility. Failing to meet any of the parameters may either mean outright loan rejection or approval at unfavourable terms and conditions. Check out the other important parameters below:
Conclusion
If you fall between the age group of 21 and 60 years, then you may be eligible to apply for a personal loan. However, just meeting the age criteria is not enough to get a loan approval. This is because, besides your age, the lender also considers other crucial factors like your employment history, income, credit profile, etc.
Also, before you apply for a personal loan, ensure to use an online personal loan EMI calculator to compute the personal loan EMI. Doing so may allow you to avoid any defaults due to insufficient funds in the future.
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