Dreaming of taking a vacation at an exotic location? Or perhaps you’re planning a destination wedding? If you’re considering dipping into your savings to finally treat yourself, we have a better idea. One that will allow you to keep your savings safe for a rainy day. A personal loan.
Whatever may be your needs, a personal loan is just right to finance them. It not only helps you enjoy today, without worrying about the future but also meets your every financial need seamlessly. But as in the case with all loan applications, you must meet the eligibility to get a personal loan as well.
When you apply for a personal loan, your eligibility is determined by many factors. Do understand these before you fill in your personal loan application, to get fast approval. Let’s begin!
The most important personal loan eligibility criterion is the loan candidate’s credit score. Your credit score is perhaps the first parameter a lender will look at. In essence, it determines if you can afford a loan and your reliability when it comes to personal loan repayment. Your CRIF Highmark or CIBIL score represents your creditworthiness. The lender will use this score to evaluate your eligibility and calculate the final interest rate you’ll be offered. The higher your credit score, the lower your interest rate. For instance, a CIBIL score ranges from 300 to 900. A score of 750 and upwards is ideal and will facilitate a smoother loan approval process.
Current financial condition
Another important aspect that lenders look into when evaluating your personal loan application is your current income and expenses. This is an essential metric for determining personal loan eligibility.
Even if you do earn a substantial sum, lenders look at how much debt you owe. They study your past credit cards, loans, mortgages etc. Some lenders also consider other aspects like your monthly bills, alimony, and child support. They will use your income to determine the Debt-to-Income ratio to get an understanding of your ability to repay your personal loans. This helps them safeguard against non-repayment of loans.
The next personal loan eligibility criterion is the candidate’s job stability. Lenders often want to see an official record of ongoing income and employment stability. If you have a stable job, there shouldn’t be any problem when you apply for a personal loan.
However, applicants who frequently change jobs or are self-employed may not find it easy to get a loan sanctioned, since they pose a higher risk for lenders when it comes to personal loan repayment.
Good employment history, on the other hand, doesn’t necessarily mean that you’ve stayed with the same company for several years. What lenders want to see is that you have stayed in the same line of work and it has been stable. On that note, self-employed candidates receive closer scrutiny by lenders and need to provide in-depth information. The idea behind studying your employment stability is to ensure you will be able to make timely payments and avoid defaulting on the repayment of the loan.
Equal monthly instalments (EMI)
The next personal loan eligibility criterion is your ability to repay the loan at a predetermined monthly instalment.
When you apply for personal loans, your lender calculates a sum you must pay monthly to repay the loan with a minimum financial burden. This is known as the EMI, and is an important factor in your loan application.
You need to know this number as it indicates whether you can afford to pay a loan on your current budget or not. A borrower’s EMI amount depends on the rate of interest and length of the loan.
Apart from your creditworthiness and job security, eligibility to get a personal loan depends on additional factors too.
Some lenders put weight on the loan amount and your plans for using it. For instance, you could have a good credit score and a reliable source of income, but the lender might consider the loan amount to be too risky to take on. While some banks check your loan repayment history, others might consider your relationship with the organization.
Lenders want to get a holistic understanding of your candidature to calculate the safety of extending a loan to you. So, they seek any information that might affect this decision.
You must furnish all pertinent details timely for quick loan approval.
Attractive personal loans at Tata Capital
Personal loans are a smart way to meet your financial needs without disturbing your savings. From medical bills and house renovation to an urgent need for funds, a personal loan helps you finance it all. And now that you know the personal loan eligibility criteria, you can apply for a loan without hesitation.
Personal loans at Tata Capital are designed to suit your unique needs while offering a great degree of flexibility. Get easy finance at competitive interest rates to fund your needs – big or small. Avail a loan amount from Rs. 75,000 – 25,00,000, with interest rates starting at 11.25%. Apply for a personal loan at Tata Capital today!