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What do lenders look at before approving your personal loan application?

  • Highlights

  • Credit scores play a major role in personal loan approvals

  • Salary is another key aspect determining your loan approval

  • ther liquefiable assets can improve the chances of your personal loan getting approved

  • Your lender may check your income history too

Every financial institution operates differently with different goals and expectations. While some allow you to apply online for a personal loan, others require you to submit the appropriate documents first in order to assess your application for a personal loan. They are stringent with their criteria when approving loans to minimize risk when they do grant the loan.

Bajaj Finserv allows online personal loan applications with approval within within as little as 5 minutes. Also enjoy pre-approved offers on several financial products. Simply share a few basic details, and get your exclusive pre-approved offer.

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Listed below are a few pointers - or the 5 ‘C’s as they’re called - based on which lenders grade your eligibility for personal loans:

Credit history

When you apply for a loan, lenders scrutinize your credit score in its entirety, i.e., from the very beginning. They monitor your track record, right from your spending habits and your attitude towards making payments on time. Your credit history also contains inputs from other lenders who have extended loans to you. This means that a poor credit history will spoil the chances of your application getting through.

When you pledge assets such as your home as security for the loan you take, they are known as collateral. This aspect applies mainly for secured loans, such as a home loan or an auto loan. However, personal loans are usually unsecured, meaning they do not require collateral. This is why it can be difficult to get a personal loan approved unless you have a good credit score.


Having other liquefiable assets like savings and investments, along with your salary, can improve the chances of your personal loan getting approved. This is because those sources of capital can assist you in repaying the loan in case you lose your job or source of steady income.


Lenders take note of your present and past employment history to determine your proficiency in repaying your pending loans. While doing this, bankers also consider your income amount, type of income, and stability before they sanction the loan.


Though personal loans can be used for a variety of reasons, lenders may ask you what those reasons are. You should be well equipped to explain your circumstances to the lender, to ensure that they take your needs seriously.


Consider that you have never had any line of credit, because you have a steady job with a steady income. However, now, due to certain circumstances you need some extra money. It is in such a situation that your character plays a major role in dictating whether the lender sanctions your personal loan application or not.

The content of this document is meant merely for information purposes. The personal loan features mentioned in this article are subject to updation, completion, revision, verification and the same may change materially based on policy revisions. For more details, please visit our Personal Loan terms and conditions page here.

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