In the current times, personal loans are availed by several people for many reasons. More often than not, personal loans help with quick fund needs. However, most financial institutions and banks ensure to verify certain parameters before providing a personal loan. So, it is best to stay aware of the factors that will be checked and maintain good records for a smooth process.
Factors that Affect a Personal Loan
1. Your financial credibility
One of the first aspects that are considered when it comes to granting a personal loan is your financial credibility. Your financial credibility is mainly assessed by your credit score. So, ensure to keep track of your current credit and try to mitigate liabilities.
2. Your current financial health
The number of assets and your finances you currently hold will determine your capability to repay the amount of loan you request from a bank or a financial institution.
3. Your source of income
Finally, your current stream of income will also determine your eligibility to repay the loan. This, further, impacts the chances of you availing of a personal loan as banks consider this to gauge your financial repayment capacity.
How to Boost Your Chances of Availing a Personal Loan?
1. Employment status
An important factor that can improve your eligibility to successfully avail of a personal loan is your employment status. Some financial institutions also waive a certain portion of the interest rate based on your employment profile. In general, salaried employees are given preference over non-salaried ones when it comes to granting a personal loan.
2. EMI repayment
Almost every lender calculates the potential of the borrower to repay loans. This is very important as banks would like to ensure timely repayment of EMI on the loans that are disbursed. If you have low repayment obligations, the chances of you being granted a personal loan are high.
3. Credit score
Your Credit score is one of the most important factors that are considered by lending institutions before granting a loan. It is mainly used as an indication to understand your spending and credit habits. It is recommended to maintain your credit score at a minimum of 750. The higher your credit score, the more likely it is for you to successfully avail of a personal loan.
4. Your relation with the lender
If you already have an existing relationship with the lender of the loan, you are in a better position to avail of a personal loan. Your existing relation could be in the means of a bank account, a previous loan, a fixed deposit account, etc.
How to Calculate Personal Loan EMI?
You can calculate personal loan EMI by taking into account 3 key parameters. The first factor you need is the capital required. Then, you would need to know the period of tenure and the interest rate. Based on these 3 parameters, you can calculate personal loan EMI with the help of the Bajaj FINSERV personal loan EMI calculator.
In a Nutshell
Now that you have gained some insight into what parameters weigh in while applying for a personal loan, you can stay a step ahead. Meanwhile, ensure to have a good credit score to boost your chances of availing a personal loan.