Personal Loan: It seems easy to take many personal loans. But applying without preparation can spoil things. This can also have a bad effect on your credit score. Banks look at many factor before giving loans. If you understand these things first, then the possibility of getting a loan increases. Also, you get a chance to get a loan on low interest rate and better conditions.
Income and job stability
Banks first see that your earnings are stable and you can easily repay the loan. The more your income is, the more the chances of getting a loan will increase.
The stability in the job also works in your favor. For example, working in the same company for at least one or two years. If you are your own employment, you have to show the stable income of your business. Such as financial reports or tax returns.
Credit Score and History
Your credit history is the biggest factor in deciding the possibility of getting a loan. The score of 750 and above is usually considered good. This means to the bank that you have repaid the earlier loans on time.
If your previous loan has default, payment is delayed or a lot of loans have applied in a short time, then things can deteriorate. So monitor your credit score and correct any mistake.
Current loans and responsibilities
Banks also see how much part of your income is already going into EMI or credit card payment. If more than 40-50 percent of your income is already tied, it can be difficult to get a new loan.
In such a situation, you can increase your eligibility by first paying some old loans or merging the loan. You should also try yourself to remain the same, whose EMI can be paid without any hassle.
Age and loan repayment ability
Most banks consider young applicants to be low risk as they have the ability to earn longer. But at the time of being very young, the attempt to take a loan without experience is not beneficial.
Generally 21 to 60 years of age limit is considered correct. The loan period is also fixed according to your retirement age.
Your company name
Where you work, it also affects it. Working in a reputed company, especially in a stable sector, increases the opportunity to get your loan. Similarly, professional degrees or tasks in which rules and regulations are strict, you can give you a loan on easy terms.
Q1. Can a personal loan be found even if there is a low credit rating?
Yes, you can get, but you can get a loan at a small amount or higher interest rate. It would be better to improve your credit score first.
Q2. Are all banks the same eligibility?
No. Basic things like credit score and income apply to all, but each bank has its own rules and cut-offs. Some banks give more importance to some factors.
Q3. Does many banks increase the chances of getting a loan by applying at once?
Not necessary. Giving a lot of applications at a time can affect your credit score. So first check the eligibility online and then apply carefully.
Also read: Personal Loan EMI: These 10 banks are giving the cheapest personal loan in the festive season, understand EMI’s full account