Personal Loan For Low-Income Salary People

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Unexpected expenses, urgent repairs, or even consolidating existing debt – life throws financial curveballs, and sometimes, a personal loan can be a lifeline. However, for individuals with lower incomes, securing such a loan can feel like an uphill battle. Strict eligibility criteria, high-interest rates, and the constant worry of affordability can make the whole process feel overwhelming. This article is here to guide you through the challenges and help you navigate the path towards getting a personal loan, for low-income salary person. Let us begin by understanding the eligibility criteria and documents required for the personal loan.

Eligibility Criteria For Personal Loan For Low Income Salary People

Below are some typical eligibility requirements, though they can differ from one lender to another.

• Age: 21 to 60 years
• Work Experience: Minimum of 2 years
• Job Type: Employees in private, government, or public sector companies
• Time in Current Job: Minimum of 1 year

Documents Required for Personal Loan For Low-Income Salary People

Here is a list of documents you need to apply for a personal loan if you have a low salary:

Application Form: Fully completed application form.

Identity Proof: Submit any one of the following:

• Driving license
• Aadhaar card
• Passport copy
• Voter ID

Proof Of Address: Submit any one of the following:

• Passport copy
• Driving license
• Aadhaar card
• Voter ID

Bank Statements: Last 3 months’ bank statements.

Age Proof: Document that verifies your age, like your birth certificate.

Income Proof: Most recent salary slips along with Form 16.

Photographs: Recent passport-sized photographs.

Signature Verification Proof: Document required to verify your signature.

Also, Read: Need 30,000 Rupees Loan Urgently In a Day

Features and Benefits of Personal Loans For Low-Income Salary People:

1. Flexible Loan Amounts: Choose a loan amount from Rs. 1,000 to Rs. 10 Lakhs, based on your income and credit score.

2. Instant Loan Disbursal: Once approved, the loan amount is credited to your account within 24 hours.

3. No Guarantor or Collateral Required: Apply for a loan without needing a guarantor or collateral.

4. Fully Online Process: Apply for a loan online without any paperwork, making the process quick and easy.

5. Loans for Low Credit Scores: Eligible for individuals with a CIBIL score or Experian score of at least 650.

Interest Rate on Personal Loans For Low-Income Salary People:

Interest rates on personal loans vary depending on your credit score, loan amount, and chosen lender, typically ranging from 9.99% to 44% per annum. A strong credit score can lead to a lower interest rate, saving you money in the long run. Below is a table of lenders and the interest rate they offer on personal loans.

Also, Read: How to Get 20,000 Loan Without Documents?

EMI on Personal Loans For Low Income Salary People:

Your EMI (Equated Monthly Installment) is the fixed amount you pay each month towards your loan. It includes both the principal borrowed and the interest accrued over the repayment period. 

The formula for calculating EMI (Equated Monthly Installment) is:

EMI = [P x R x (1+R)^N] / [(1+R)^N-1]

where:

P: Principal loan amount (for example, Rs. 50,000)

R: Monthly interest rate (annual interest rate divided by 12, expressed as a decimal. For eample, 20% / 12 = 1.6666% = 0.01666)

N: Loan tenure in months

Here are the calculations for different loan tenures with a 20% interest rate on a Rs. 50,000 loan amount:

Example 1: Loan tenure of 6 months:

• EMI for 6 months = [50000 x 0.01666 x (1 + 0.01666)^6] / [(1 + 0.01666)^6 – 1]

EMI for 6 months = Rs. 8,826.14 (approximately)

Example 2: Loan tenure of 1 year:

• EMI for 1 year = [50000 x 0.01666 x (1 + 0.01666)^12] / [(1 + 0.01666)^12 – 1]

EMI for 1 year = Rs. 4,631.73 (approximately)

Example 3: Loan tenure of 2 years:

• EMI for 2 years = [50000 x 0.01666 x (1 + 0.01666)^24] / [(1 + 0.01666)^24 – 1]

EMI for 2 years = Rs. 2,544.79 (approximately)

As you can see, the EMI amount decreases as the loan tenure increases, but you end up paying more interest overall due to the longer repayment period.

Applying for a Personal Loan For Low-Income Salary People:

Many lenders offer convenient online application processes for personal loans. Here’s a breakdown of the steps involved:

Steps To Take A Personal Loan For Low-Income Salary People:

1. Check Eligibility:

Start by confirming your eligibility based on the lender’s criteria, which may include minimum income requirements and credit score benchmarks.

2. Fill Out the Application:

Complete the online application form with your personal and financial details, including income proof and employment information.

3. Upload Documents:

Submit the necessary documents electronically, such as ID proof and income proof, as required by the lender.

4. Review and Submit:

Carefully review the application details and submit it for processing.

5. Loan Approval and Disbursement:

Upon approval, the loan amount will be credited directly to your bank account.

Remember to compare interest rates and choose the lender offering the most competitive deal that fits your budget comfortably.

Tips To Get Personal Loan For Low-Income Salary People:

Following these tips can greatly enhance your likelihood of obtaining a personal loan, despite having a low salary.

• Build a Good Credit History: A high CIBIL score is crucial for securing a personal loan. If you’ve had late payments on previous loans, this could lower your score. Aim to maintain a high score by being disciplined with your loan repayments to show lenders that you are a reliable borrower.
• Report Your Loan Repayment History: Inform your lender about any past loans that you have repaid on time. Lenders will assess your reliability based on your past repayment performance, which can help you get approved quickly, even with a low salary.
• Check and Correct Your Credit Report: Ensure your credit report is accurate. If there are any discrepancies, such as an EMI reported as unpaid when you have paid it, contact the credit bureau to correct these errors. Maintaining a correct and healthy credit score can significantly improve your chances of loan approval.

Securing a personal loan with a lower income requires careful planning and a strong financial profile. However, by understanding the factors involved and taking steps to improve your creditworthiness, you can increase your chances of approval and access the financial assistance you need.

In some cases, exploring alternative solutions like borrowing from family or friends with clear repayment terms might be a more suitable option, especially for larger sums.

With careful planning and responsible borrowing, even individuals with lower incomes can navigate the path towards financial security. We hope you found this blog informative and helpful. Remember, knowledge is power, and with the right approach, securing a personal loan can be within your reach.

If you liked this blog, please let us know in the comments below! We’d love to hear your thoughts and answer any questions you may have.

Also, Read: I Need 1000 Rupees Loan Urgently

FAQs:

1. What is the Minimum Salary Required to Qualify for A Personal Loan?

There isn’t a fixed minimum salary required for a personal loan as it differs from one lender to another.

2. Am I Eligible for A Personal Loan if I have A Low Income and Poor Credit?

Yes, it’s possible to obtain a personal loan even with a low income and poor credit. However, you might face higher interest rates and a smaller loan amount. Ensure you have the financial capacity to make repayments, as missing a payment can further damage your credit score.

3. Can I Get A Loan with A Salary of 10,000?

Yes, eligibility for a loan on a 10,000 salary depends on the lender. Some lenders set the minimum salary requirement at Rs. 10,000, while others may have higher minimums, up to Rs. 30,000.