Financial emergencies can occur anytime. Though we all save some money to deal with such situations, our regular savings might fall short in emergencies. In that case, taking out a Personal Loan may be a saviour, such as during a medical emergency, unemployment, or any other unforeseen expenses. It is a convenient option to get the necessary funds quickly during difficult times. However, before applying for a Personal Loan, you must ensure that you meet the necessary prerequisites and check the eligibility criteria for Personal loan. Along with other aspects, age is a crucial factor in determining Personal Loan eligibility.
Relation Between Age and Personal Loan
The relation between the age of the applicant and Personal Loan eligibility is inversely connected. Let’s understand this by determining the relationship between age with the important aspects of Personal Loans:
Loan tenure and age
In exceptional cases where the loan amount is high, financial institutions extend a longer repayment tenure. As young applicants have more earning and employment opportunities, financial institutions easily sanction loan applications for young individuals with the extended term. However, older applicants, especially the ones retired or nearing retirement, still need an extended repayment tenure on their Personal Loans.
If you are wondering how to plan a Personal Loan EMI for 1 lakh or more, you can use an online EMI calculator. Depending on your age and the maximum tenure you can get, you can easily find the EMIs.
Loan amount and age
Since young individuals have more earning opportunities, financial institutions offer loans of a considerably higher amount. On the other hand, if you are nearing the age of retirement, where you will not have a regular income, it will be difficult for you to convince the lender to sanction a higher loan amount.
Repayment capacity and age
Young borrowers are usually considered to have fewer family responsibilities and other financial burdens, and consequently, they have a better repayment capacity than older borrowers. Due to this fact, financial institutions approve Personal Loan applicants of young candidates without much hesitation. A good repayment capacity shows that an individual can make timely repayments and reduces the risk factor for a lender.
Hopefully, now you know how age plays a part in determining your Personal Loan approval. Having said that, a few more pointers play an important role here. These are –
· Credit profile: Your credit profile includes your credit score and repayment history. If you excel in these two points, you will be in a better position to secure a loan.
· Current debts: If you do not have any existing debt, your chances of securing a Personal Loan are better.
· Relationship with the lender: If you are an existing client, you have a better chance of getting a loan. Since the financial institution already knows you, they are more likely to extend credit.
The age of an applicant certainly plays a crucial role in deciding the chances of approval for a Personal Loan or the terms of the credit. However, it is not the only factor. Focus on all the factors and work accordingly to get the best possible deal.