Tips on becoming perfectly eligible to apply for a Personal loan without collateral

by Loans & Credit Published on: 20 January 2020 Last Updated on: 21 April 2022

Personal loan

A personal loan is an unsecured loan that can be taken from any financial institution dealing in providing such a form of credit. Being an unsecured type of loan, you are not required to submit any collateral to avail of the loan amount.

This type of loan is offered to an individual on the basis of his credit score and eligibility that the lender checks on when assessing the loan application.

Follow the below tips to ensure you become perfectly eligible to get a personal loan without any collateral:

What is a personal loan?

Personal loan

A personal loan is an unsecured type of loan that can be availed without having to offer any security or collateral to the lender. The loan amount borrowed has to be paid back in monthly EMIs in flexible tenures ranging from 12 months-60 months. The lender provides you with the flexibility to utilize the loan amount as per your needs. You can use the money to cater to various expenses including home renovation, debt consolidation, medical emergencies, and others. The interest rate for this type of loan is generally higher in comparison to secured loans like car loans, home loans, and others. Defaulting on personal loan EMIs can dent your score and further lead to the rejection of your application.

Tips to ensure your personal loan application is not rejected:

Maintain a good credit score:

Your credit score plays an imperative role in helping lenders decide the fate of your loan application. A high score reflects responsible credit behavior and clean credit history, hence increasing personal loan eligibility. Also, having a high score helps you get a high loan amount, whereas, a low score can lead to rejection or approval of the loan at a low-interest rate. The score ranges from 300 to 900 with 300 being the lowest and 900 the highest. Lenders in India generally require you to have a minimum credit score of 650-750 based on which your loan or credit card application is approved.

Ensure you meet the eligibility criteria:

Personal loan lenders would instantly reject your loan application if you don’t meet their eligibility criteria. Many times, loan applicants do not check the personal loan eligibility criteria of the lender and proceed with the application. This leads to rejection which can then further dent the credit score. Therefore, it is imperative that you always check on the eligibility criteria of the lender as the same differs from lender to lender. Generally, you should meet the below eligibility criteria to be able to get a personal loan:

  • You should be aged between 21-60 years
  • You should be employed with a private, public, or government entity
  • Also, you should have a minimum credit score of 650
  • You should have a minimum income of Rs. 17,000

Don’t make multiple loan applications:

One of the things that keep lenders away from approving your loan application is making too many credit inquiries. If you think that making too many applications would increase your chances of approval then you are highly mistaken, conversely, it decreases your personal loan eligibility. Multiple inquiries are recorded in your credit report, displaying your credit-hungry behavior. Remember, this still stands even if you applied for one of the personal online loans, as those can also be seen in your credit report.  Therefore, it is necessary that you only make one application at a time.

Don’t apply for a fresh loan when repaying an old one:

Opting for a second personal loan simply adds a burden to your monthly expenses, making it difficult for you to repay the EMIs. Try to maintain a gap of 6-12 months before applying for a fresh loan.

Pay loan EMIs on time:

Defaulting on loan EMIs and credit card bills can lower your credit score that can lead to rejection of the application. Being irresponsible with your EMI payments can be a sign of bad credit behavior, whereas, on-time payment helps you increase your credit score that as a result increases your chances of getting more unsecured credit.

Find the right lender:

Every lender in India comes with its own set of underwriting requirements that help credit managers to assess your credit eligibility. Although factors like age, income, credit score, and others are similar, each lender has diverse criteria due to which it is best to check on its eligibility criterion. If you’ve ever wondered “Am I eligible for a personal loan”, you can check your personal loan eligibility online using a personal loan eligibility calculator.


When applying for a secure your loan personal, it is imperative that you ensure you submit the right details as giving out incorrect details can lead to rejection of your application. Also, ensure that you don’t have a high income to debt ratio and a stable income to repay the EMIs.

Also, it is best to always calculate the loan EMI using a personal loan EMI calculator to get an estimate of the amount you will have to repay each month.

Note that opting for a longer tenure increase the overall interest you have to pay, whereas, a short tenure can create a burden on your monthly expenses.

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Mashum Mollah is the feature writer of Search Engine Magazine and an SEO Analyst at Real Wealth Business. Over the last 3 years, He has successfully developed and implemented online marketing, SEO, and conversion campaigns for 50+ businesses of all sizes. He is the co-founder of Social Media Magazine.

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