Banks determine Personal Loan eligibility based on varied factors. Every bank has specific eligibility criteria for borrowers to meet. You can check them by considering the Online Banking mediums. After providing the required details, the bank’s verification team determines your eligibility.
Borrowers should check their eligibility using the Personal Loan eligibility calculator to get approval without hassle and avoid unnecessary hard enquiries. If you meet the set eligibility criteria, banks may sanction a higher amount. You also get a lower interest rate, swift approval, and instant disbursal.
Tips to improve eligibility
Several factors, including credit scores, employment type, employer reputation, age, and repayment capacity, affect your eligibility to Personal Loan apply. These influence your interest rates, tenures, and subsequent approval and disbursal. You can improve your Loan eligibility by following these tips:
Check the bank’s criteria
Before applying for a Personal Loan, check the bank’s eligibility criteria on their website or app. Doing so avoids rejection due to reasons like income or age. Nowadays, most banks mention their eligibility requirements online to inform their customers.
Track your FOIR
Spending a chunk of your monthly earnings to pay for your existing financial obligations reduces your eligibility and chances of approval while securing a new Loan. The bank may charge you a high interest rate to compensate for the higher risk. Always maintain a Fixed-Obligation-to-Income Ratio below 40% or 50%. Pay off your outstanding Credit Card bills and liabilities to increase your chances of getting a new Personal Loan.
Avoid multiple applications
When you need emergency funds, you can apply for Loans at multiple banks to increase your approval chances. However, you need to consider that each application results in a hard inquiry on your credit report, eventually reducing your credit ratings and lowering your chances of Loan approval.
Boosts credit scores
A credit score of 750 or above is decent enough for a Personal Loan approval. The higher your CIBIL score, the higher your chances of getting approval at favourable interest rates and terms. If you have a lower credit score, you can boost it by paying your debts and Credit Card bills on time and ensuring a low debt-to-income ratio.
Mention all income sources
For approval, show the bank that you can repay the Loan on time without defaulting. Instead of providing details of your monthly salary, furnish information about all additional income sources, such as rent, investments, hobbies, and part-time jobs. It boosts your Personal Loan eligibility for a more significant amount at better interest rates.
Conclusion
You can now use the Personal Loan eligibility calculator. Enter your city, date of birth, monthly income, and expenses to streamline the application process. Moreover, having a stable employment history also contributes to Loan approval.
