A personal loan for salaried employees is a traditional personal loan that anyone can acquire. However, acquiring such financial service favored salaried employees more than any other category of borrowers.
Nowadays, the need for personal loans is on the rise, especially among young professionals. It is unarguable that a personal loan is an excellent one-size-fits-all solution to all your personal needs, whether it is funding your dream vacation or covering emergency expenses.
Suppose you plan to apply for a personal loan and fall under the salaried employee category. In that case, you should read through and understand everything you need to know about personal loans for salaried employees.
The first thing you must know about getting a personal loan is that some factors can affect your eligibility. Having a job isn't enough to be qualified for a personal loan. Some lenders undergo a loan instant bank verification to see the bigger picture when approving an application.
Check out these main factors that affect your eligibility to acquire a personal loan and see whether you qualify or not.
The most vital parameter for evaluating your eligibility for a personal loan is your annual income. It is because it assists lenders in determining whether you are capable of repaying your loan or not.
However, the annual income requirement for personal loans varies from lender to lender. For example, some lenders may require you to earn at least $1,000 to $2,000 yearly. Meanwhile, others will require you to have a minimum yearly income of $13,000 to $17,000.
You can also find lenders that don't specify a required minimum for the annual income of their borrowers as they approve the loans on a case-to-case basis.
The next factor that can impact your eligibility for a personal loan is the area of your residency. Lenders could determine your standard of living based on the locality of where you live. Your living situation will also play a significant role in your eligibility for a loan.
Lenders would want to know whether you own the place where you live or if you are renting it. This information will let the lender understand your financial obligations, affecting your capacity to repay the loan.
Your current DTI ratio is a gauge used by a lender to know about your financial health and commitments. If your DTI ratio is too high, the financial institution may deny your loan application as you may not be able to repay your personal loan.
Who you are working for will also impact your loan eligibility. During the computation of your credit score and when the lender assesses your application, your employer's reputation will be highly considered.
Working for a disreputable company will mean that your job could be unstable as your company could close down at any time. Meanwhile, if you're working for a well-known and highly reputable company, it will indicate that you are in good hands and that you have a brighter future in your career.
The last but certainly not the least is your credit score. You might already have heard about how crucial a good credit score is to acquire various financial products. Your credit score is a tool that provides the lender with an overview of your current financial situation.
If you think you are not eligible for a loan or you didn't pass the assessment for a personal loan as a salaried employee, there are ways you can do to increase your chances of qualifying for a personal loan.
The first thing you should do is to improve and maintain a good credit score. A credit score alone will greatly impact your eligibility for any loan types you want to apply for. In addition, you should maintain a steady income, and you will see how easy and quick you can acquire personal loans.
It is also advised to avoid applying for multiple loans as it could hurt your credit report. It is a clear indication that you are hungry for a loan.
When applying for a personal loan, you should note that the requirements for salaried employees differ from pensioners, self-employed individuals, or NRI Applicants. Here is a list of requirements you should gather before applying for a personal loan.
1. Proof of Identity, two of the following is accepted:
Certificate of Citizenship
Social Security Card
2. Proof of Income
3. A Good Credit Score
4. Employer verification such as:
W-2 or 1099
Contact Information of your Employer
5. Proof of Address
Lease or rental contract
Statement of Mortgage
Property Tax receipt
Credit card or bank statement
Proof of insurance for your home, care, or lease
6. Duly complied application form
You can apply for a personal loan from three avenues. These avenues are traditional banks, credit unions, and online lenders. These three are the most common institutions where borrowers apply for a personal loan.
However, it would be best if you considered that each of these avenues would have different processes regarding the loan application. Therefore, it would be best to do your research to know which is more suitable for your specific situation.
A personal loan for salaried employees is basically your typical unsecured personal loan. However, it would be best if you were wary about the differences it may have from other personal loans for other categories, especially regarding requirements and eligibility.