5 Ways Your Employment Status Affect Personal Loan Approval

The approval process for a personal loan heavily relies on your employment status. Lenders evaluate your capacity to repay the loan and your employment status, which indicates your income stability and job security. Before seeking a personal or online personal loan, you must check CIBIL score. This article highlights the importance to check CIBIL scores before applying for a personal loan. It discusses the five ways your employment status can impact your probability of obtaining approval for a personal loan.

What Are Personal Loans And Online Personal Loans?

Personal loans

Personal loans are a favored option for fulfilling various financial requirements. They can be used for several expenses like medical emergencies, travel, consolidation of debts, and more. Nevertheless, they carry higher interest rates as compared to secured loans. 

Online Personal Loans

Online personal loans are obtained from an online lender, where the whole application procedure is carried out online without physical visits to a bank or a lending organization.

Whether you are obtaining a personal or online personal loan, you must check CIBIL score as it increases your chance of approval.

5 Ways How Your Employment Status Can Impact Your Ability to Get a Personal Loan

Did you know that your employment status can affect your ability to get a personal loan? Here are the five ways your employment status may impact your personal loan approval.

  • Monthly Income: 

When considering an individual’s capacity to repay a personal loan, lenders consider their monthly income. The minimum required net monthly income usually ranges around ₹25,000, although this may vary depending on the lender and loan amount. Other factors like CIBIL score and credit history are also taken into consideration. So, you should check CIBIL score before applying for a personal loan.

  • Length of Employment:

Lenders favor borrowers with a consistent employment history, indicating a steady income and the ability to repay the loan. Several years of work experience can enhance the likelihood of personal loan approval. However, switching jobs frequently or having gaps in employment can affect your eligibility. 

  • Work Profile:

Certain lenders prioritize applicants in specific professions, such as doctors, engineers, or lawyers. These professions are considered ideal for lending due to their steady income and job security. Nonetheless, individuals from other professions can also apply for personal loans, and lenders will consider factors like earnings, CIBIL score, and credit history. 

  • Salary Credit:

Lenders prefer regular salary deposits into a bank account as it indicates a stable source of income. Cash payments are not accepted as there will be no proper evidence. You must provide documents such as salary slips or bank statements to verify your income when applying for a personal loan. 

  • Employer’s Profile:

The employer’s profile plays a role in determining eligibility for a personal loan. Lenders usually prefer high-net-worth companies due to their financial stability and reputation. However, the eligibility of individuals working for start-ups or Small and Medium-Sized Enterprises (SMEs) will depend on earnings, CIBIL score, credit history, and repayment history.

Before applying for a personal loan, check if you possess these qualities, as these factors increase your chance of approval. 

5 Reasons Why You Should Check CIBIL Score?

Here are the five reasons you should Check CIBIL score before applying for a personal loan.

  • Better chances of loan approval.
  • You can negotiate better interest rates.
  • It helps you identify any discrepancies in your credit report.
  • You can reduce the risk of the loan getting rejected.
  • It helps you plan your finances.


In conclusion, employment status affects the chances of your loan getting approved. Lenders consider various factors such as monthly income, length of employment, nature of work, salary deposits, and the employer’s reputation. Having a consistent employment status and a reliable source of income will improve the chances of personal loan approval. 

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