Nisha, a 24-year-old lawyer, wanted to set up her own office. She wanted to convert her garage into a suitably furnished room where she could meet clients. However, her savings were not enough to fund the renovation, so she needed a personal loan. But Nisha was young and had little financial knowledge, and that made her unsure if this was the right time to take such a loan.
Is there a right time to take a personal loan? The answer is no. Different people use personal loans to meet different kinds of needs. A young student may take a personal loan to pursue higher education, while a retired school teacher may need it to pay for his child’s wedding. The eligibility criteria vary for different age groups too. This article talks about personal loans and the age factor.
Is Age an Eligibility Factor for Personal Loans?
Yes, age is a factor when it comes to personal loans. You can get a personal loan only if you are between the ages of 21 and 60 years. But with age, come experience, job stability, and asset build-up. All these factors can also affect your personal loan approval. So, age influences various other factors that can impact on your personal loan application.
- Income: A 39-year-old bank manager is sure to earn far more than a 25-year-old bank clerk. The clerk may eventually work his way up and become a manager some day. But, right now, the latter earns a smaller amount. Keep in mind that personal loans are unsecured loans, and lender may only extend these after considering the individual’s credit score and income. So, an older person has a slight edge here.
- Credit History: A person who just starting out in in the professional world is unlikely to have too many assets. Such a borrower will not have an excellent credit score either. Only after earning for a while, will the individual be able to afford a home or car. This also means that the person’s earnings will have increased enough to apply for a loan and repay it. A better credit history also plays a big part in getting a personal loan at a faster pace.
- Employment History: Another thing that lenders look at is the borrower’s employment history. They check whether a borrower has changed too many jobs. They usually prefer someone who has held a steady job for a longer period. A recent college graduate cannot flaunt such a favourable employment history; another aspect that favours an older person.
Personal Loans for Everyone
Personal loans are not necessarily more accessible to an older person than to a youngster. Lenders do not usually reject a fresher’s personal loan application based on age. Even if you are young, try to maintain a good credit score. Be disciplined in paying off your student loan. This will reflect positively on your repayment trends. Try not to spend too much through your credit cards. In fact, the same rules apply to older people as well.
The Bottom Line
There is no perfect time to opt for a personal loan. A personal loan is a good financial product that helps you address an urgent financial need with ease. You could be a young entrepreneur looking to set up a business or an experienced professional in need of money to travel abroad for treatment. Whatever your need, a personal loan can help you out. Just make sure you are capable of repaying the loan. Speak to your lender and find out what options are available to you.