Even though people today have become aware of the importance of saving funds from an early stage, they are equally eager to enjoy life to the fullest. This has resulted in huge demand for different types of loans that enable individuals, especially among salaried employees, to fulfill their most cherished dreams. Be it owning a car, or buying a house, or even getting a higher education, there is a specialized loan available for almost every need. However, people may have other aspirations that require a significant amount of money, but for which no specialized loans are available. These may include going on an exotic vacation, organizing a child’s wedding, renovating the house, or even paying for medical expenses. Thankfully, personal loans can be availed for covering these diverse expenses, for salaried individuals, who are often constrained by their limited resources.
Who Are Salaried Employees?
Salaried employees are people who work for an organization in either the public or private sector and get a fixed amount for their efforts and contribution at the end of each month. These individuals generally have only one specific and constant source of income from which they have to manage their various expenses and savings. Even though salaried employees today earn a considerably higher income than their predecessors, their lifestyle needs often make them seek different types of loans including online payday loans. They thus prove to be the ideal borrowers for banks and other lending institutions that offer attractive personal and other loan terms to them.
Loan Eligibility Criteria For Salaried Employees
As mentioned before, most lending institutions offer favorable personal loan terms to applicants categorized as salaried employees. However, such individuals still need to fulfill the below-discussed eligibility criteria to ensure a hassle-free approval of their loan.
Duration Of Service: Most lenders consider the number of years for which the applicants have been employed with the same or even a different employer to be a key eligibility criterion for a personal loan. The minimum duration of employment is set at 1 year by most lenders although, this parameter may vary from individual to individual and one lending institution to another. In general, the greater the work experience of an individual, the easier it is for him/her to get the loan application approved.
Minimum Age: Most lending institutions provide a loan only to adult individuals, except perhaps in the case of student loans. Hence the minimum age for any salaried employee seeking a personal loan is set at 21 years by most banks and financial institutions. However, some lenders might opt for a higher minimum age for personal loans depending upon their specific business policies and operating principles.
Maximum Age: In general, the lending institutions do not specify any maximum age limit for applicants desirous of seeking a personal loan. However, some banks prefer to offer loans to salaried individuals who will be less than 65 years old at the time of maturity of the loan term. This is because most individuals are likely to have either retired from their job or about to do so by the time they reach the age of 65.
Annual Income: This is definitely one of the most important eligibility criteria considered by lenders while offering a personal loan to salaried employees. In this context, every lender has a different limit for the minimum salary that the applicants should be drawing to get their loan approved. However, it is a common perception that individuals drawing a salary of less than 15000/- per month are quite unlikely to get their loan application approved.
Credit Score: This is yet another important parameter considered by the lending institutions while assessing the eligibility of a salaried employee for a personal loan. Since most personal loans are offered without any collateral, the lenders prefer to approve them for individuals having a minimum credit score of 700. Even though some private lenders may offer a personal loan for a low CIBIL score to salaried individuals, they often do so after increasing the interest rate and capping the maximum loan amount while also reducing the repayment duration.
Best Options To Avail Personal Loans For Salaried Employees
When it comes to availing of a personal loan, salaried employees can choose from one of the below-discussed three options.
From Commercial Banks
Commercial banks are the most popular choice for availing of any type of loan including personal loans. These banks generally follow a standard procedure for offering the loans and have a rigid approval, disbursal, and repayment system.
From Co-operative Banks
Co-operative banks are a more popular choice among loan seekers in rural areas although they operate at a fairly smaller scale. They offer more flexible repayment options and lesser interest rates as they are not driven by profit motives.
From Online Lenders
With the advances in technology, the number of online lenders has increased significantly. These lenders are gaining much popularity due to their policy of quick disbursal, low interest, minimum paperwork, and flexible repayment options.