Personal loan is something that everyone wants to rely on for quick financial needs but it is not so easy to get. The main reason for this is insecurity. For this reason lenders will only approve each loan very carefully. This can sometimes lead to your loan application being rejected.
Let us look at the factors that banks and other financial institutions mainly consider in granting personal loans.
The most important is the credit score. Generally, applicants with a credit score of 750 and above are considered more financially disciplined and are more likely to get a loan. This means that lenders have a lower credit risk. Lenders also offer preferential interest rates to individual loan applicants with high credit scores.
Make sure you build and maintain a strong credit score to enhance your personal creditworthiness. Timely repayment of EMIs and credit card bills and limit credit utilization ratio to 30%. Avoid multiple loan or credit card applications within a short period of time.
Many banks and NBFCs offer personalized loans with interest rates ranging from 10% to 24%. Many lenders also offer pre-approved personal loans to existing customers at preferential interest rates. Existing forms can be in various forms, including current, savings, salary or fixed / recurring investment accounts, existing loans or credit cards.
Those wishing to obtain a personal loan should first contact the existing banking and / or lending relationship sharing bank and / or NBFCs. Interest rates and other loan features they offer can be used as a criterion for comparing interest rates offered by other lenders. Also, visit online financial marketing centers to compare personal loans offered by other lenders based on your credit score, income, employer profile, job profile, etc.
As with all other loans, the borrower’s repayment capacity is a critical factor. Lenders should generally have monthly loan repayment liabilities (including EMI for new loans) up to 50% of total monthly income. Those with high repayment liabilities are generally less likely to approve personal loans. Such applicants must choose a longer term.
Banks or financial institutions also consider the applicant’s employment characteristics before approving individual loan applications. Some lenders also consider their job profile when setting interest rates. In general, lenders prefer to lend to unpaid employees rather than unpaid employees.
