Why Calculate Eligibility Before Applying for a Personal Loan? Points to Know

Why Calculate Eligibility Before Applying for a Personal Loan? Points to Know

The importance of an emergency cash fund has never been as rampant as today. For fixed salary individuals to self-employed, everyone wants to have access to cash fast. Despite instant cash loans via mobile apps and online lending platforms, borrowers are seeking fast Personal Loans from large banks like SBI & HDFC. However, before you go ahead in your search for Personal Loan, you must know how to assess the eligibility for the loan.

It is important to meet the eligibility criteria specified by the lender before applying for a loan. Every lender follows a specific process to determine the Personal Loan eligibility of the applicant. This helps them determine if your credit profile matches their requirements and whether you will be able to repay the money in time. They calculate the risk factor involved before accepting your loan application.

Personal Loan on Aadhar Card Calculate Personal Loan EMI

Thus it is paramount that before you Apply for a Personal Loan, you determine your eligibility for a Personal Loan. Also, all Personal Loan applications are accompanied by the payment of processing fee as well as a footprint on your credit report. If you end up applying with lenders whose eligibility criteria you cannot match, then the entire exercise will burn a hole in your pocket and dent your credit score.

How to calculate your Personal Loan eligibility?

In the present times, assessing personal loan eligibility is straight forwards. While the details regarding the Personal Loan Documents and eligibility criteria are specified on the website of the respective financial institution, there is also a useful online tool to help you with the process i.e., Personal loan eligibility calculator.

You just need to enter the following details into the calculator:

  • The loan amount that you intend to borrow.
  • Repayment tenor over which you intend to repay the loan.
  • Rate of interest which you will be serving during repayments.

Once you have entered all the information, you will be able to see the EMIs you will have to serve as well as the interest cost you will be serving. By calculating your Personal Loan eligibility, you can easily understand if you will be able to afford the EMIs for the loan or not.

Personal Loan Documents

In most instances, you are required to submit the following list of  documents:

  • Income Tax Statement for the last 3 years.
  • Savings account statement for the last 6 months of all the banks.
  • Salary slips for the last 6 months.
  • Form 16 for the last 2 years.
  • KYC Documents
  • Experience Certificate to prove work experience.
  • Loan repayment statement for any running loans.

Once you submit all these documents, the lenders use their preferred approach to determine your Personal Loan eligibility.

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Factors that determine your eligibility

Following are the various factors that lenders use to determine your loan eligibility:

  • Age of the applicant (Usually between 21 years to 60 years)
  • Work Experience (At least 2 years, including 1 year with the current employer)
  • Monthly Income (Varies across lenders, but the minimum requirement is Rs. 12,000 per month)
  • Credit Score (CIBIL score should be above 650)
  • Bank Balance (To determine the liquidity of the applicant)
  • Repayment track record (to understand the credit behaviour of the applicant)

Why should you calculate your personal loan eligibility?

There are various benefits that you can enjoy by calculating your Personal Loan eligibility:

Determine the loan amount and tenor:

The online Personal Loan Eligibility Calculator helps you determine the size of EMI basis the loan amount, tenure, and interest rate you feed in. You can use the calculator multiple times and learn about the best combination of EMI, loan amount, and tenure as per your repayment capacity. This helps you make an informed decision, thus reducing the chances of default later on.

Understand the affordability of the loan:

You can compare several offers from different lenders and choose the most affordable option. In all, you can save a significant sum of money by availing the best offer for yourself.

Avoid unnecessary applications:

Every time you apply for a Personal Loan, whether through online channels or offline channels, you are supposed to provide various documents and pay the application fee. Moreover, every Personal Loan application initiates hard queries in your credit report and, in fact, reduces your credit score if you apply for multiple loans simultaneously. If you end up applying with lenders whose eligibility criteria you cannot meet, the entire exercise will be futile. Therefore, by calculating your personal loan eligibility beforehand, you can easily avoid unnecessary applications.

Calculating your personal loan eligibility before applying for a personal loan is an essential step to avoid unnecessary hassles later on. Always remember that being an informed borrower is extremely essential to maximize the benefits of the Personal Loan in the long run.

 

Also Read: Getting Personal Loan Approval in 24 Hrs with Less Documentation & Low EMIs

 

To apply online for Home Loan, Personal Loan, Credit Card, Business Loan & LAP visit www.mymoneymantra.com, the leading online lending marketplace that offers financial products from 100+ Banks and NBFCs. We have served 4 million+ happy customers since 1989.

 

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Category: Personal Loan