Reasons To Check Personal Loan Eligibility Before Applying
by Giselle Lobo Writer & BloggerCompared to secure credit options, Personal Loans are immensely popular. They let you borrow funds without collateral. This relieves your burden of arranging a surety in an emergency. Also, you need not wait for long to get approval. With increased digitisation, most banks and financial institutions offer it on their websites.
You only must visit their profile and go through simple steps. But as this Loan type comes with flexible terms, lenders have stringent parameters. They require your profile to be risk aversive. For this, you need to meet their specific requirements. Knowing the eligibility criteria helps in being prepared. You also get a tool called Personal Loan calculator for the same. The reasons to check eligibility includes:
Fix credit history
The biggest part of the eligibility criteria is a credit score. Lenders emphasise this aspect as it shows them your creditworthiness. They even disregard other parameters to some extent if you have a higher credit ranking. Hence, you should ensure you have a favourable rating. Ideally, this ranges between 750-900. Check this by fetching your credit report before applying.
Work on income sources
Your revenue decides your repayment capacity. It impacts the disposable income you have after covering other expenses. For Personal Loans, the minimum income requirement is Rs. 25,000. But the Loan amount you get depends on your qualification. You get to check this by using the Personal Loan eligibility calculator. You work on building your income sources if the loan amount is not as expected.
Clear existing debts
Getting a Loan is a huge financial responsibility. This requires you to stay equipped with financial resources. But this applies to the funds remaining after fulfilling your expenses and obligation. If you have any existing debts in this mix, your income distribution becomes a haywire. It also results in reduced disposable income. This component is included in the eligibility calculator.
Arrange documentation
When you know the eligibility criteria, you automatically understand the paperwork required. For instance, you need income statements to prove your revenue status. The same goes for other parameters. This assists you in arranging the required documents beforehand. As a result, you save the trouble of last-minute hassle. With prepared paperwork, applying for Loan online is a smooth process.
Apply carefully
The common mistake most applicants make is applying to multiple lenders. This makes them appear as credit hungry borrowers. The main reason for this is not understanding the eligibility criteria and Loan terms. A Personal Loan calculator eliminates this problem. It shows you the lenders' expectations accurately before applying. This way, you apply only to the feasible options. It is a crucial aspect as sending out multiple applications affects your credit score.
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Created on Nov 12th 2021 06:53. Viewed 295 times.