Can I Apply for a Personal Loan If I Am Below 21?
Are you 21 years old and planning to take a personal loan in the near future? Check out all the details related to age for taking a personal loan here.
Personal loans are the best option if you need short-term financial help. It could be buying a car, paying for your education, or even moving to a new town. Getting an instant personal loan has never been easier, as several lenders will lend you money based on your financial profile and needs. However, you must understand the personal loan eligibility criteria before applying for any personal loan. One of the most critical requirements for a loan is to meet the minimum age criteria. But before we get to it, let’s first understand a personal loan.
What Is a Personal Loan?
A personal loan is a financial product that allows you to borrow money from a bank or other financial institution. It can be used for various purposes, such as purchasing a car, paying off debt, or starting a business. The loan is often arranged through a financial institution, such as a bank or credit union. The lender will usually require you to submit several documents to qualify for the loan. These documents may include your credit score, income and expenses, and employment history. The lender will also require you to provide documentation of the purpose of the loan. It may include information about the purchase or debt you’re trying to pay off. Once all the required documents have been submitted, the lender will review your application and decide whether or not to approve the loan.
Personal Loan Eligibility
Before discussing the age requirements, other questions about personal loan eligibility must be answered. The one question most commonly asked is related to the documents required to meet personal loan eligibility.
Here are the documents you need to prove your personal loan eligibility:
- Proof of Identity – Aadhaar/Passport/Driving Licence/Voter ID
- Address Proof – Aadhaar/Passport/Driving Licence/Voter ID
- Bank Statement – Passbook updated for the last six months
- Proof of Income – Salary Slip
What Is the Minimum Age for a Personal Loan?
To comply with common personal loan eligibility rules, one must be 18 or above to apply. However, even if you meet this personal loan eligibility requirement, some lenders allow you to borrow money only after you are at least 21 years old. If you’re unsure about the age requirement of the lender you’re applying to, you can always ask them what the minimum age is. Like all other criteria, the age requirement can be found in the marketing material supplied with the loan application or on the website of the lender you’re working with.
But if you’re looking to get a large loan – to buy a car, your average income and credit score will determine the amount you can get. Moreover, given the greater risks involved in giving large loans to young individuals who lack a regular income source, banks may impose additional terms and conditions, including security guarantees.
Can You Get a Personal Loan Without Being 21?
Yes, as already stated, one is eligible for a personal loan after the age of 18. Therefore, an individual who is 21 years old can avail of a personal loan without hassle.
Regardless of age, lenders usually welcome people who want to take a loan. But all lenders have age limit criteria that applicants must meet to qualify for the process. This age, in most cases, is 18. However, much depends on the kind of loan you want. For example, if you want a small loan to pay for your education, you can get a loan without being 21 years old.
However, for a large loan to buy a car, house, or anything else that involves a sizable amount, you’ll have to be 21 years old. Although you may be technically eligible for such loans as you meet the personal loan eligibility requirement, you may not get one due to the lack of a viable income or a recognised proof of one. Once you’re 21 and have something to show for a regular, dependable income, lenders will be more inclined to approve your loan application, including the bank where you have your salary account.
Should You Get a Personal Loan if You’re Below 21?
One of the common questions when it comes to a personal loan is whether you should get a loan if you are young or, more specifically, if you’re below the age of 21. It is a very important question, especially if you want a loan to help you pay off your debt. Per the country’s laws, you can get a personal loan only when you are 18 or above. You are technically eligible to get a personal loan at 21, given that you meet the personal loan eligibility requirement. But taking a personal loan at a young age has its advantages and, for lack of a better word, even disadvantages. The advantages include developing a strong credit history from an early age. When you’re nearing 30 years of age and planning to start a family, you may need financial assistance in the form of a loan. A good financial history, reflected by a strong credit score of over 800, will ensure that you get a loan at that time without hassle.
However, there are potential risks involved too, but none that can’t be mitigated. If you’re looking to take a personal loan, you sure have a way to pay it off. You must pay the EMIs or equated monthly payments scheduled by your lender in consultation with you on time. If you manage to do that, you will not only avoid the risks associated with a loan but also build a flawless credit history which will add to your financial independence later in life.
Repayment Schedule for Personal Loan
Most lenders will give you a repayment schedule (or option to pay) when you take out a personal loan. The repayment schedule will show you the amount you will have to pay monthly and the interest you will have to pay. Usually, the minimum repayment period is one year, but it could differ from case to case. It is important to repay your loan as it shows that you are serious about paying it off. It is better to repay your loan as soon as possible rather than leave it in a debt pile. So, if you take out a loan and don’t pay the money back, it will stay in a pile of debt, and you’ll have to pay a higher interest rate. So, paying your loan off as soon as possible is important. It’s in your best interest – pun intended.
Final Remarks
Taking a personal loan to start a business or paying off a debt is an attractive proposition for most young individuals. It opens new education and career development possibilities for every individual who meets the personal loan eligibility requirements. But, at the same time, it brings potential risks, which must be understood in advance. However, if you wish to minimise the risks and maximise the advantages of taking a personal loan at a young age, you must look for options with built-in flexibility. Piramal Finance is known for such options, designed from scratch to suit the needs of individuals like you.