Loans & EMIs · Updated October 2026 · 6 min read
Every lender sets its own personal loan rules, but they all look at the same few things: whether you can repay, whether you have repaid well before, and whether your details check out. Understanding these helps you apply to the right lender and avoid a rejection that shows up on your credit report.
In short: Lenders check your income, your existing EMIs, your credit score and your job stability. Keep your total EMIs well within your income, check your score before applying, and keep your documents ready.
1. Your income
A personal loan is unsecured, so your income is the main assurance of repayment. Lenders set a minimum monthly income, which varies by lender, city and whether you are salaried or self-employed. Higher income generally means a larger loan amount and sometimes a lower rate.
2. Your existing EMIs (FOIR)
Lenders work out how much of your monthly income already goes to EMIs and card dues. This is called the fixed obligation to income ratio (FOIR). Many lenders prefer your total EMIs, including the new loan, to stay roughly within 40% to 60% of your take-home pay, depending on your income level.
For example, if you take home ₹60,000 a month and already pay ₹10,000 in EMIs, a lender allowing 50% FOIR would consider a new EMI of up to about ₹20,000.
3. Your credit score and history
Your CIBIL score and repayment history show how you have handled credit before. A score of around 750 or above usually gets better approval chances and rates, though each lender sets its own cut-off. Late payments, defaults, settled accounts and many recent loan applications all count against you. Read what a CIBIL score is and how it is calculated.
4. Age and job stability
- Most lenders lend to people roughly between their early 20s and around 60 at the end of the loan tenure.
- Salaried applicants usually need some minimum time with their current employer and in total work experience.
- Self-employed applicants are usually asked for a few years of business continuity and filed income tax returns.
- The type of employer matters too. Some lenders offer better terms to employees of listed companies, government bodies or well-known firms.
Documents you will usually need
- Identity and address proof: PAN and Aadhaar are standard; a passport, voter ID or driving licence may also be accepted.
- Income proof (salaried): recent salary slips and bank statements, and sometimes Form 16.
- Income proof (self-employed): income tax returns, audited financials if applicable, bank statements and business registration proof.
- A photograph and, for some lenders, an employment ID or offer letter.
Many lenders now verify these digitally, through account aggregator consent, e-KYC and video KYC.
How to improve your chances
- Check your credit report first and fix any errors.
- Pay down card balances or small loans to lower your FOIR.
- Apply for an amount and tenure your income can clearly support.
- Avoid applying to many lenders at once. Each application is a hard enquiry on your report. Check pre-approved offers or eligibility tools first.
- Consider a co-applicant with a steady income if the lender allows it.
Common questions
Can I get a personal loan with a low credit score?
Some lenders do lend at lower scores, but usually at higher rates or for smaller amounts. Improving your score first often saves more money.
Does checking my eligibility affect my score?
Checking your own score or a soft eligibility check does not. A formal application leads to a hard enquiry, which can lower your score slightly for a short time.
My loan was rejected. What now?
Read why loan applications get rejected before you apply again.
Next steps: Work out a comfortable EMI with our EMI calculator, then compare personal loans.
Disclaimer: This guide is for education and is not financial advice. Rates, fees and rules change, so check the latest terms with the lender before you borrow.