5 Ways to Determine Your Personal Loan Eligibility

 

In order to approve a personal loan, the banks and money lenders have to consider some factors that determine your personal loan eligibility of an individual for the sanctioning of the loan. These factors help them avoid risks of defaulters.

1.Healthy Credit Score:
A Credit Score of an individual is a strong factor for the banks to check the eligibility of an individual, the credit score should be maintained at its best and should not lower down. The minimum credit score of 300 points should be sustained and a good credit score is above 750 points. The errors on the CIBIL reports should be checked so that the credit score is boosted and all the debts should be paid on time which can keep the credit score sustained.

2.Income:
Many banks and money lenders charge up to 43 percent of an individual’s monthly income for the repayment of the loan. The income of the applicant should be proportionate so that he will be able to pay the loan amount. Even if the income of the individual is substantial, the money lender checks if there is any other loan pending on the individual that has to be paid simultaneously which may also have a part of his monthly income deducted.

3.Job History:
To apply for a personal loan an individual has to show proof of job stability to the banks and financial institutions. Banks always have a risk while financing the self-employed and the people who change their jobs too often, because due to less job stability and self-employment the lender may fall in for a defaulter who will not be able to pay his dues on time.
Employment history does not mean that an individual has worked in the same company for many years but the banks see that if you have been in the same line of jobs and the job changes are less frequent and even if they are, they should have a profitable reason for the individual. Self-employed applicants have to prove their loan eligibility by providing in-depth information about their business or employment to show a reliable source of repayment.

4.EMI:
EMI are Equated Monthly Installments that are to be paid by the individual on a monthly basis for a certain period of time. EMI’s determine the personal loan eligibility of the applicant. The calculation of EMI is important as it determines the capability of an individual to make the payment of dues before the deadline. The amount of the EMI decides the interest rate that the individual has to pay while making the payment to the banks and also the time that will be needed to pay the loan.

5.Loan Payment History:
The banks check the loan payment history of an individual before sanctioning the loan along with the credit score. The unpaid loans can lower the credit score of an individual and also reduce the chances of him getting a loan again. The unpaid loans are shown on the CIBIL report up to seven years. If there are any errors in the reports one can get them corrected and adjusted so that the credit score stays undamaged.

 
Some banks provide the loan to the applicant according to the use of the applicant. Sometimes the bank may even reject the loan if they feel that the purpose of the loan is not acceptable.

Fullerton India helps you to determine your personal loan eligibility online through Fullerton India Personal loan Eligibility Calculator.