Are you looking for a loan? Use a Personal Loan Eligibility Calculator to Check Eligibility – The New Indian Express
Read on to understand how, using smart tools like the Eligibility Calculator, you can make an informed decision before applying for a loan.
Personal loans are a lifesaver in situations where you urgently need money. For home renovations, medical bills or vacations, a personal loan lets you deal with financial emergencies without dipping into your savings. Personal loans are unsecured, which means that you are not required to provide collateral to qualify. There are also no restrictions on how you want to use your loan amount. All of these factors make personal loans very convenient and user-friendly.
However, the strict eligibility criteria and relatively high interest rates on personal loans can be a drag. Before applying for a loan, we suggest you use a personal loan eligibility calculator. This will give you the utmost clarity on all aspects of your preferred loan program. An EMI calculator or interest rate calculator can also tell you the exact monthly debt you will face once your repayment schedule takes effect.
Eligibility criteria for obtaining a personal loan
Banks and other credit institutions follow strict eligibility criteria to assess the repayment capacity of potential borrowers. The personal loan eligibility criteria constitute several regulations as recommended by the Reserve Bank of India:
- Minimum age of 21 years and maximum age of 55-60 years (varying according to the different institutions) to guarantee the borrower a long employment horizon.
- Fixed monthly/annual income (preferably salaried people).
- Minimum wage limit in Tier 1 and Tier 2 cities (subject to change based on borrower’s residence/work location).
- A minimum work experience of 1-3 years (varies by different institutions) guarantees employment and income stability.
- Complete documentation, including KYC documents, ITR of the previous year, payslips and bank statements of the last 3 months.
- A credit score of 750 or higher to determine the borrower’s repayment history.
Now that you know the eligibility criteria, you can use the Bajaj Finserv Personal Loan Eligibility Calculator to check if you are cutting. If you run out, don’t worry; you can always improve your eligibility by following these simple steps.
How to improve your eligibility for a personal loan
• Consider your debt ratio
The debt-to-income ratio indicates your ability to repay. Most banks consider the ideal debt to income ratio around 30-40% for personal loans. If your debt ratio exceeds 50%, you will find it difficult to obtain a low-interest personal loan from banks. Always use a personal loan calculator to determine your potential EMIs.
• Build your credit score
Your credit score reflects your repayment history and the timeliness with which you repaid old loans. Most banks require a credit score of 750 and above before approving a personal loan application. A credit score below 750 indicates that you have delayed your previous loan payments/credit card bills, or may have defaulted as well. Before applying for a personal loan, work to increase your CIBIL score by getting ahead of all your repayments, whether for existing loans or credit cards.
• Provide details of all your sources of income
If you have more than one income (employment, self-employment, rental etc.), you must declare full details of each source of income. This will allow the bank to sanction a loan amount based on your total income from all sources. Multiple incomes are viewed favorably by banks when sanctioning personal loans at the lowest interest rates.
• Do not opt for several loans simultaneously
Multiple loans are a shortcut to financial disaster. Many loans affect your eligibility for a personal loan and decrease your chances of getting one at a low interest rate. Indeed, managing the repayments of several loans increases your debt ratio and reduces your ability to repay. Banks and credit institutions view such applicants as a bad investment and usually reject such applications outright.
A personal loan eligibility calculator is a great tool that clarifies what you need to do to qualify for a personal loan at the lowest interest rates. The repayment capacity of your loan is based on your monthly/annual income and the interest rate of the loan. A personal loan calculator or EMI calculator also allows you to play around with different interest rates and term options and come up with a combination that suits your financial situation. Remember that the longer the term, the higher the total accrued interest, while the shorter the term, the higher the amount of your EMI.
When it comes to availing hassle-free finance, you can avail a Bajaj Finserv personal loan and get a sanction of up to Rs. 25 million. Plus, you can get approved in minutes after meeting the lender’s simple eligibility criteria. Before applying, use the Bajaj Finserv Personal Loan EMI Calculator to get the necessary information on how to borrow effectively.
This content is distributed by Bajaj Finserv. No TNIE Group journalist is involved in the creation of this content.