Whether you're looking to fund a vacation, host a wedding, pay higher education tuition fees or address medical emergencies, an instant personal loan is one the best tools you can opt for. This is mainly because it is an unsecured loan, meaning that you don't need to pledge any asset to get the sanction. However, due to this nature of the loan, lenders tend to have strict eligibility protocols. This includes analysing your financial and professional profile to ensure that you're creditworthy.

So, to ensure that you get the funding you need, when you need it, take a look at 5 key factors that impact your personal loan approval chances.

Your Credit Score and Credit History

A key factor that impacts personal loan approval is your credit score. This is assigned to you by credit rating agencies and it is based on your credit history. It includes your past experience with borrowing credit, your repayment track record, missed payments and the variance in credit types. All of these make up your credit score and it typically ranges from 300 to 900, with credit scores over 750 indicating good credit behaviour. Scores below 750 can lead to loan rejection, and even if your application is approved, your personal loan may not carry the most favourable terms.

Your Age and the Repayment Tenor Opted For

Another factor that impacts your chances for getting an online personal loan is your age and the tenor you've opted for. For instance, if you're deemed too young, under 23 years of age, you may not get approved simply because you don't have the required experience or earning capacity to keep up with payments. Similarly, if you're nearing retirement, are over 55 years of age, and opt for a tenor of 60 months, you could get rejected because you don't have enough years of steady income before retirement.

Your Income and Work Experience

To keep up with personal loan EMIs, your income plays a major role and lenders look into it very closely. Firstly, you must meet the minimum monthly earning requirement and this amount differs based on the city you live in. Secondly, lenders also look at your work experience to check for job stability. Having a job for an extended period of time is good sign that you can handle repayment as you'll have a steady flow of income. In the absence of this, you carry a higher risk quotient and may face rejection.

Your Current Debt to Income Ratio

Whether you're opting for a regular or instant personal loan, your debt-to-income ratio is always taken into consideration. This is because lenders aren't inclined to lend to you if you already have significant existing debt that demands a sizeable portion of your monthly earnings. So, to improve your odds of approval, apply for a personal loan only if your current debt obligations require a minimal portion of your monthly salary, as any more than 50% indicates a high risk of default.

For efficient planning at your end, use the personal loan calculator to check your EMIs and see if you can accommodate them comfortably, should you get approved.

Your Employer's Reputation

This factor of your professional profile is also important in determining whether or not you get approved for a personal loan as lenders look for financially sound employers. For instance, being employed by the government is greatly beneficial as your job has a higher level of security in comparison to an applicant who works in the private sector.

As you'll notice, there is a lot more to personal loan approval than meets the eye and while lenders may offer the promise of an instant personal loan, all these factors are looked into carefully. So, before making an application, be sure to check in on your profile and ensure that everything is in order to minimise rejection.

Once you're ready, borrow only from the best in the industry to enjoy a truly beneficial experience. Most of the NBFCs in India offer a sizable collateral-free sanction of up to Rs.25 lakh, at a competitive interest rate, over a flexible tenor of about 60 months. This offering has other value-added features to benefit from as well, such as the Flexi Loan facility and a customised, instant loan deal. To access the latter, all you have to do is check your pre-approved offer.