Is it worth to calculate personal loan eligibility? Why do so? When Banks anyways does it, right? These are the questions that could come in one’s mind whenever there is the talk of personal loan eligibility calculator. And if you are having some kind of questions, then this article may help you out.
Let’s first understand what personal loan eligibility is all about.
Personal loan eligibility varies based on the lender as well as the type of availed loan. It is primarily calculated based on various factors like rate of interest, repayment tenure, and nature of borrower’s employment and others.
It is important to check whether the personal loan eligibility before applying for it. The eligibility criteria of the personal loan depend on the certain parameters which a borrower needs to fulfill. These parameters vary based on the loan amount; the type of loan for the borrower is applying for.
Now a day’s checking the personal loan eligibility has become so easy with the online available loan eligibility calculators. A borrower can find n number of personal loan eligibility calculators online. These online calculators are user-friendly hence a borrower can simply enter the required details and the eligibility can be checked within a few minutes.
Benefits of Personal Loan Eligibility Calculator
A Personal loan is a collateral-free loan, which means lenders do not ask borrowers to provide any security to put against the loan. Typically, this puts the lenders in a delicate position. They evaluate an applicant based on various criteria such as the monthly income, credit score, etc. Though, before applying for personal loan a borrower needs to be sure about his/her eligibility.
Few benefits of the personal loan eligibility calculator are listed below:
Experimenting with the loan amount
A great feature of an online personal loan eligibility calculator is that it can be easily customized as the borrower requirements. A borrower can enter different numbers in the column (loan amount, repayment term, interest rate, and others) to get tailored results using which a borrower can figure out the configuration that suits the best to his/her income. These calculators are free of cost even if a borrower is not a client of that particular lender.
Easy to plan partial or complete prepayment:
This feature of the personal loan eligibility calculator is quite a convenient option that may bring down the stress of long tenures. If a borrower happens to have some extra earning like a bonus, pay hike, etc., he/she can use it to pay an extra EMI, which will lead to lesser the EMIs of remaining months. Furthermore, a borrower can also use a personal loan eligibility calculator to plan the repayment tenure. This is especially helpful when the rate of interest fluctuates.
It is better to check the personal loan online eligibility before applying as if in case a loan application gets rejected it can damage the CIBIL Score drastically. Having an idea of the minimum EMI expected by the lender for a particular amount can help a borrower to understand how much loan amount he/she can apply. And also increases the chances of the loan application getting approved.
Personal Loan Eligibility
Personal loans are considered as one of the best support to fulfill the financial requirements. It is a multiple purpose loan hence can be used for contingency plans, holidays, or consolidating the debts. While applying for it, a borrower is required to submit basic documents like income proof, bank statements, address proof, ID, etc.
The personal loan eligibility majorly depends on the borrower’s current earnings, loan repayment capacity, existing EMIs, etc. Here is a few other eligibility factors is given which need to be considered while applying for a personal loan:
- Type of employment
- Last few months income tax returns
- Minimum earning requirements which usually based on the location
- Minimum and maximum age requirements generally are between 21years to 60 years
- The total work experience and also in the current organization
Tips to improve Personal Loan Eligibility
A few points are mentioned below which can help a borrower to boost his/her personal loan eligibility.
1. Settlement of all previous loans
2. Maintain a great credit score
3. Choose longer repayment tenure
4. Duly pay the credit card bills
5. Residential or Commercial Rental Income
6. Good Variable Pay
Let’s have a brief understanding of these tips.
Settlement of all Previous Loans
When a borrower applies for a personal loan, he/she should make sure that any other loan payments are not in line. As, if there are other loans to pay for, then the borrower loan repayment capacity becomes a risk for a lender as the borrower already has to pay other EMIs at the end of every month. So also try to pay off or settle the previous loans before applying for a new one.
Maintain a great Credit Score
Regardless of the lender, credit score always remains the most important factor for the lender. If a borrower has an impressive credit score for a constant period, then the lenders consider his/her as a credible borrower rather than a risk.
Choose Longer Repayment Tenure
When a borrower chooses longer repayment tenure, it increases his/her loan eligibility. Longer tenure reflects that the borrower can repay the loan for a certain period in the future. A borrower can take help from the personal loan EMI calculator to plan the EMIs.
Duly payment of Credit Card Bills
Timely payment of the credit card bills shows that a borrower is disciplined and responsible when it comes to making the payments. This can boost personal loan eligibility.
Residential or Commercial Rental Income
If a borrower has any residential or commercial property on rent then the rent he/she earns from it is known as rental income. A rental income is considered as a good add-on to the existing financial situation when a borrower applies for a personal loan.
Good Variable Pay
Those borrowers who earn variable pay, and keep an updated record of the same at work. The more variable pay a borrower earns increases the chances of personal loan eligibility.