Getting approval for a loan, whether secured or unsecured, depends on your ability to repay. In order to secure approval, you must demonstrate that you have sufficient earnings to comfortably repay the debt. However, this is just one aspect of the equation.
In addition to your income, lenders take into account a variety of other factors when determining your eligibility. By satisfying the eligibility requirements, you can receive prompt approval for your loan. Other than that, let us discuss a few important factors.
Important factors in determining personal loan approval besides the income of an applicant
Here are some factors apart from the salary that determines your eligibility for a loan –
· Credit score
A credit score is a significant factor in getting a loan with quick approval. Check your credit score before applying. Usually, lenders prefer a credit score of above 750, but you need to check with the lender beforehand.
Note: A personal loan with low CIBIL is possible, but the terms will be difficult to manage.
· Age
Most lenders looking for borrowers come from the working age group, meaning your age should be between 21 and 60 years. But there is an age relaxation for self-employed people, which can go up to 65 years.
The idea here is the age of the applicant is indirectly related to the eligibility for the loan. So, an aged applicant will have trouble receiving approval.
· Work experience
Work experience shows the stability of your income history. The lenders approve your personal loan quickly if you have a longer work experience. Generally, lenders prefer borrowers working in the current organisation for at least 6 months.
However, if you are someone with a frequent job-changing history, it will give a negative impression to the lenders, indicating that you do not have the employment stability needed for the approval.
· Tenure
The loan tenure is a crucial factor in this process. It’s best to select a loan tenure based on your monthly income, so having a proper financial plan is important. Keep in mind that the maximum and minimum tenure of personal loans in hyderabad with low interest rate can vary among different lenders.
Opting for the maximum tenure allows you to repay with lower monthly EMIs. On the contrary, it will increase your total debt as the interest payment will increase. So, you need to get a personal loan to keep the repayment in check.
Hence, choosing a shorter loan tenure to reduce interest payments will result in higher monthly EMIs. This can stretch your finances, potentially raising a red flag for the lender and leading to the rejection of your loan application.
· Current liabilities
Your current liabilities will also factor into the assessment of your eligibility for a personal loan. If you are currently managing one or more loans, lenders may be hesitant to approve another one as it could increase the risk of a payment default. To increase your chances of getting the best deal on a personal loan, consider paying off your existing debts before applying.
Wrapping up
In addition to your salary, there are several other significant factors that can impact the approval of a personal loan. As a prospective borrower, it’s important to keep these factors in mind and plan ahead to minimise the risk of facing difficulties or delays during the approval process.