How Does Age Limit Affect your Personal Loan Eligibility?

Financial contingencies can arise anytime, and to arrange finance swiftly and speedily, people often resort to personal loans. With the increased advancements made by the banks in the loan application and approval processes, the loan amount usually takes as little as 2-7 days to reach you.However, you have to meet certain eligibility standards to qualify for the loan.Some important factors that decide your personal loan eligibility are;

1. Your Credit Score
2. Your Monthly Income
3. Your Job Stability
4. Your Age

It can be said that there is an inverse relationship between personal loan age limit and loan eligibility. The younger you are, the more are the chances of seamlessly sailing through the loan-sanctioning process. However, this may not always be true. Let's look at three aspects of a personal loan where the age of an applicant plays an important role.

• Relationship Between Age and Loan Tenure: For personal loans, the loan tenure usually ranges from minimum 1 year to a maximum of 5 years.  A younger applicant is considered to have more employment and earning opportunities against an older applicant. Therefore, if you are in your 20's, you are more eligible to get a personal loan of a longer tenure as compared to someone who is in the 50s. Similarly, tenure of the loan can also be extended in case of a younger applicant.
• Relationship Between Age and Loan Amount Just as tenure, the loan amount approved is also based on the age factor. A younger applicant with a similar profile can get a higher loan amount approved compared to an older applicant.
• Relationship Between Age and Interest Rate The age of the applicant has an indirect impact on the interest rate offered by the lender. The interest rate offered depends on a few essential factors, such as credit score, income, etc. A very young applicant may not have a good income as (s)he may be new to a job or may not have a good credit score because of lack of credit history, which may impact the interest rate offered negatively. On the other hand, those who have had 5-10 years of work experience are known to have a well-build credit history which can act in their favour when negotiating for interest rates.

It is important to choose a personal loan at a feasible interest rate. However, it should also be made sure that you fully satisfy all the eligibility criteria of the respective financial institutions to avoid untoward inconvenience later. Thus, before going for a personal loan, check all the columns of eligibility.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.