Get the Tata Capital App to apply for Loans & manage your account. Download Now


Equipment Finance

Avail Digital Equipment Loans
up to Rs. 1 Crore

  • Attractive ROIs
  • Customizable Loan tenure

Equipment Leasing

Avail Leasing solutions
for all asset classes

  • Up to 100% financing
  • No additional collateral required

Tata Capital > Blog > Personal Use Loan > Will My Personal Loan Eligibility Be Impacted During Lockdown?

Finance Solutions

Will My Personal Loan Eligibility Be Impacted During Lockdown?

Will My Personal Loan Eligibility Be Impacted During Lockdown?

The COVID-19 led outbreak has put many individuals under financial stress. With the lockdown in effect, the situation has gotten worse for those facing a severe cash crunch. In such testing times, getting a personal loan seems to be the only option left, for a financial re-ordering. However, a question lingers:

Has the lockdown impacted personal loan eligibility? The answer is both yes, and no.

The eligibility conditions to apply for personal loan remain as they were pre-lockdown. But the financial sector is feared to have been affected adversely. And with the increasing pay-cuts and job losses, more borrowers are likely to default. This situation raises concerns for the lenders who might exercise stringency in estimating personal loan eligibility.

In this article, we will explain the personal loan eligibility factors that will be impacted by the lockdown and how.


Even as lenders soften their loan terms, without adequate monthly income, personal loan applications won’t be approved. Your monthly income is the most critical factor in your financial profile as it represents the ability to repay a loan while meeting your monthly obligations.

However, due to the pandemic, many are experiencing a financial crunch, and the economy has been on the decline. Given the gravity of the situation, this personal loan eligibility factor will be impacted the most. Therefore, ensure that you add additional sources of income from passive sources, like a rented property, contribute towards your monthly income and enhance your creditworthiness.

Additional Reads: Tips to Manage Your Finances During Coronavirus Lockdown

Debt-to-income ratio

The finance sector will most likely be swamped with lousy credit flow in the wake of lockdown. With many people going through lowered income growth and job losses, there will be a simultaneous increase in credit seekers. This scenario poses a problem for the lenders who will respond with stricter eligibility conditions. Hence, for personal loan seekers, having a good debt-to-income ratio can come handy.

A financial profile that has too many obligations is preferred less by the lenders since it suggests a higher percentage of debt-to-income ratios. Typically, a debt-to-income ratio value that is below 50% is considered ideal for instant personal loan approval. A rate higher than this will suggest a higher risk of default.

Employment stability

When you apply for a personal loan, lenders tend to check how stable your employment is. Stability in employment translates to a steady stream of income. This directly affects your ability to repay a loan without defaulting. Additionally, lenders also inspect the economic sector and the company you work for since their stability is directly linked to yours.

Especially now, the stability of your employer will be regarded highly. The pandemic has already harmed several sectors, and it is hard to determine how it will continue to affect the economy further. In such a situation, lenders may steer away from your personal loan application if your employer’s stability is compromised.

In summation

With the widespread panic and anxiety due to the pandemic, taking out a personal loan is most likely to ease your financial burdens. Moreover, with RBI cutting down the repo-rate, interest rates on several loans have also been mitigated. Therefore, ensure that you fulfil the criteria mentioned above to apply for personal loan.

You can secure a personal loan online. For an easy and seamless process, get in touch with us today!

Leave a Reply

Your email address will not be published. Required fields are marked *