How to Calculate Personal Loan Eligibility

Whether you’re looking to turn a great idea into reality or get a new project off the ground, a personal loan can help move things forward. Yet like any important decision, doing your due diligence is recommended so you can be sure you’re ready to take the next step. That’s where calculating your personal loan eligibility comes in. Let’s take a closer look at what’s required for you to be eligible for a personal loan.

Am I eligible for a personal loan?

First things first. Personal loan eligibility begins with meeting the following key criteria:

18 and over: To make sure you’re ready for the responsibility a personal loan requires, you need to be aged 18 and over. A personal loan is a big commitment and for those under 18, it pays to talk to your parents or legal guardian first. That way if you still need help, they can reach out for assistance on your behalf.

Live in NZ: To apply for a personal loan, you need to be an NZ resident or citizen with proof of address. But if you’re in Aotearoa on a Work Visa, you may qualify for a personal loan before your Work Visa expires, too.

Valid photo I.D.: For New Zealand residents, valid photo I.D includes a NZ passport, NZ Driver’s License and Kiwi Access card or 18+ card. Non-NZ residents will need to supply a valid passport.

Employment: A key criteria of personal loan eligibility is the ability to pay back what you borrow (servicing the loan). Regular income from being employed provides the means to repay a personal loan. Best of all, you will have all the help you need to create a repayment schedule that works with your budget and current finances.

Common requirements of applying for a personal loan

In addition to the key criteria above, applying for a personal loan can require more information. By having your credit score, employer verification and proof of address ready, you’ll be on your way to having all your ducks in a row when applying for a personal loan.

1. Credit score/ history

Your credit score and credit history includes your payment history for credit cards, mortgages, car finances and hire purchases. It can also include your bill payment history for gas, electricity and phone accounts, too. As the record of your personal loan and repayment history, it is an important document for lenders to consider when checking your personal loan eligibility.

You can check your own credit information for free, but if you need the information in a hurry you might have to pay for it.

2. Employer/ Income verification

As well as seeing your loan and bill payment history, lenders want to be sure you have the ability to repay your personal loan. Verifying who your employer is, as well as your regular income amount, helps to bolster lenders confidence that you can afford the repayments that come with taking out a personal loan.

Employer and income verification can include a letter from your employer validating your employment and bank statements confirming your current earnings. If you’re self-employed, you may also need to provide income tax returns along with your bank statements.

3. Proof of address

Having a stable living situation is favoured when it comes to being eligible for a personal loan. Preparing proof of address by organising a copy of your lease or other rental agreement, a recent utility bill, or proof of home ownership not only provides lenders with verification that you’ve got a roof over your head, but it helps assure them that a personal loan won’t put you in over your head, either.

To recap, calculating your personal loan eligibility starts with meeting the following 4 key criteria:

• Be 18 and over
• Live in NZ
• Provide valid photo ID
• Be employed

And alongside providing the necessary documentation to show you meet the above criteria, organising proof of credit history, employment and living address before you apply for a personal loan can help you fast track the process. Plus, doing your due diligence shows you and your lender that you are ready for the responsibilities of a personal loan.

After you have checked that you meet the key criteria, and you have your documentation on hand, you’re ready to apply for a personal loan! You can even apply online in minutes, right now. To take the next step and get started applying for your personal loan, fill out your application below and get in touch with our team. We’ll make sure you have everything you need and are ready to help you move forward in the best way possible, for you.

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.