Behind The Numbers: How Lenders Assess Your Loan Eligibility

Whether you are someone who has experience applying for a personal loan or someone for whom it is the first time that they are applying for a loan, Whatever may be the case, it is true that for everyone, there are certain criteria for loans that need to be fulfilled. Additionally, some factors play a big role in deciding whether you are approved for a personal loan or are rejected from it.

The bigger question is, how do the lending institution assess who is eligible and approved for an instant loan and who is rejected? If you are someone who is looking for those answers, too, you are at the right place.

Credit score

In financial terms, it is also known as the CIBIL score. It is one of the crucial factors that the lenders consider. Irrespective of what lending institution you may have chosen, there is a certain score, which is the minimum requirement for the lender to consider your qualification for a loan. The magic number which you are looking for in terms of credit score is 750. It is a must that your score is above that, as the higher the score, the better interest rate you will get.

Minimum income

Put yourself in their shoes; if you were a large enterprise owner, would you recruit people barely qualified for a position or overqualified ones? It is the same with the banks or NBFCs. Regarding personal loan eligibility, income plays a crucial factor for lenders. In their eyes, the higher the income, the better an individual can pay off a loan. Therefore, if you have multiple income sources, consider including those when you go through the loan application process.

Age requirement

Age definitely matters in the eyes of the lenders. In fact, most of them require the loan applicants to be Indian citizens and be at least 21 years old to apply for a loan. In addition to that, they should also have part-time or full-time employment, which allows them a minimum income to be considered for a loan.

Co-applicant

This is more of a tip for you. If you have a family member with a good credit score, you may add them as a co-applicant on your application, as it will allow the lenders to mark you as someone who fulfills the loan eligibility. If you are particularly applying for a home loan, it will assist you further, as having a co-applicant who has a higher credit score will let you borrow a higher amount.

Capacity of repayment

In addition to all these, lenders also look at the credit history and other contributing factors to see if you can carry out the repayment process smoothly.

Wrapping Up

So there you have it! While a personal loan eligibility calculator may help you with the insights, it is understandable that it can be difficult for a first-timer to get around it. Along with quick approval of your loan and no documentation offering, FIRSTmoney smart personal loan allows you access to their beginner-friendly calculator to better clarify the loan you seek.