Published on Sept 21, 2021Updated on Oct 14, 2026
Borrowers avail personal loans for a host of reasons. These reasons could range between managing unexpected emergencies such as medical bills to fulfilling one’s dreams and aspirations including funding a dream vacation, wedding arrangements, higher education, and more.
Salaried employees are often approached by lenders and offered personal loans that are pre-approved. However, not everyone can qualify for a pre-approved loan, as it depends on their relationship with the lender, and not all these offers are often best suited to one’s needs. Thankfully, there are ways in which individuals in service can become eligible for a quick personal loan in a hassle-free fashion.
A good credit score plays a crucial role in getting your loan application approved. The repayment history, credit utilisation and the debt-to-income ratio of a borrower are among the main factors considered when calculating the credit score.
Borrowers who have been scrupulous in the repayment of their past loans will enjoy faster approvals on their outstanding applications.
Typically, a credit score has a range of 300-900. Most lenders require a minimum CIBIL score of 750 to accept a personal loan application.
Loan seekers can improve their credit scores through any of the following ways –
When assessing the loan applications of service professionals, lenders consider the stability of the employment, especially if the personal loan is collateral-free. Factors such as the reputation of the employer and the total number of years of experience in employment play an important role in getting the loan approved.
Individuals with good jobs and who are employed with reputed organizations often enjoy very low personal loan interest rates. This is directly connected to the reputation of their employers.
Lenders look upon borrowers who are employed at good positions with reputed organisations as loan responsible, well-educated candidates who are unlikely to lose their jobs. As such, they will not default on their EMIs.
If you are employed with a company that is uncategorised, most lenders may reject your loan applications. Individuals who are employed with uncategorised companies can still borrow money from P2P and Fintech lending platforms, however the rate of interest offered for such candidates is often very high.
Must Read: 5 Factors that Can Decide Your Personal Loan Approval
When a borrower applies for a loan, the lender approaches a credit bureau and raises an inquiry about the risk of your default. These inquiries are formal and official & are known as hard inquiries. They are also listed in your credit report.
When borrowers have multiple loan applications listed in their credit report, it cuts a sorry figure in the eyes of the lenders. They come across as credit-hungry and financial institutions are reluctant to lend them money.
Having multiple loan applications on the credit report makes a borrower a high-risk applicant. Lenders are more likely to reject loan applications of such borrowers.
As such, it is a good practice to evaluate all options exhaustively before applying for a loan. Borrowers can use a personal loan eligibility calculator to understand the maximum amount they may get and also check the lender’s eligibility criteria before applying for a personal loan.
This will help them to apply for a loan that is ideally suited to their unique needs.
Planning to apply for a personal loan? Intelligent borrowers prepare to approach a lender for a fresh loan by reducing their debt-to-income ratio. You can decrease your debt-to-income ratio by paying off any outstanding amount that you may have on your credit card bill or pending debts.
Loan seekers who have a high debt-to-income ratio come across as credit hungry borrowers. Lenders are loathed to give money to such borrowers as they fall into the category of high-risk applicants.
If you are looking to apply for a personal loan, a good rule of thumb is to ensure that the total amount on your EMIs does not exceed 30%-40% of your monthly income. If your monthly obligations towards loan repayment are more than that, refrain from applying for a new loan.
It is also a good practice to use a personal loan EMI calculator to understand your monthly EMI before applying for a loan so that you can plan your budget and understand your repayment capacity better. Make sure that the monthly debt obligation is as low as possible before you apply for a personal loan in order to show a good repayment capacity.
Must Read: Personal Loan vs. Salary Advance Loan
The ability to successfully repay the principal and interest on time ranks high on the priority list for lenders when they are deciding upon the approval of a loan application.
If you are applying for a personal loan, make sure that you mention all your sources of income in addition to your regular salary. This includes your part-time income, rental income, etc. This will show the lender that you have enough earnings to repay your debt.
SMFG India Credit offers salaried applicants with personal loans online upto INR 10 lakhs* at attractive interest rates. Apply today to know more.
*Terms and conditions apply
Important Note: This article is for general informational purposes only and may be subject to change from time to time. As product features, eligibility criteria, interest rates, charges, fees, tenures and other terms may be revised as per SMFG India Credit's policies, readers are advised to refer to the latest details from the respective product pages (please select from the top menu). For the latest loan charges, please visit Charges & Fees Link and for the latest Interest rates, please visit Interest Rate Rationale. Please note that final loan terms, disbursement process and eligibility criteria will depend on SMFG India Credit's policies at the time of loan application.
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