Wed. Feb 1st, 2023
Personal Loan Eligibility

A personal loan can help you get through a financial crunch in life under many circumstances. Be it a marriage function that you need to pay for or a medical procedure that you must foot the bills for or a sudden major repair at your home, the personal loan is here for you to make use of. With the personal loan, you have no need to break your well invested savings all of a sudden when it is not financially smart to do so. But this entirely hinges on your personal loan eligibility criteria. If you are in need of funds urgently but you are not eligible for some reason, you are left with no choice but to dip into hard earned savings or ask friends or family to help you out. This is why it is important for you to understand eligibility criteria for a personal loan in Chennai and know how to improve it.

The basics- why do lenders have eligibility norms

The lender’s business hinges on his ability to loan money to good borrowers who are likely to pay back the money with interest. Only when the borrower stays true to his commitment does the lender make his earnings and profit. Defaulted loans leave the lender with a loss. Since this is obviously not the ideal situation for him, before he approves personal loan in Chennai, the lender ensures that the borrower, that is you, matches certain eligibility criteria. These criteria are designed to facilitate a verification that the applicant can repay the loan.

Some of these may be very basic, such as age or address verification, that tell the lender whether or not you are capable of earning an income and whether your credentials are authentic. There are others that enable the lender to gauge how well you can repay the loan.

The two main personal loan eligibility factors

When you apply for a personal loan in Chennai or any other kind of loan, one of the first things the lender will check is your credit score. Your credit score tells them how good you have been at managing your finances, especially your debts. This is, in fact, a kind of preview for the lender about how well you can be expected to manage the loan they propose to give to you.

The second prime eligibility criterion they check is your income. If you are someone who earns a significant income on a steady basis, say, by way of salary, then you are a good risk well worth taking for the lender. Since you have a steady income, the chances that you will easily be able to meet repayment requirements is high and the risk of defaulting on the loan, low. When you are making your application, the lender asks for your salary slips for this reason. They allow him to verify how much you earn and how steady the income is.

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Shoring up your eligibility

A credit score of over 700 is a great help in helping you get a loan easily and quickly. This is deemed a very good credit score underpinning your status as a good risk for any lender. Making sure that you pay back your dues in time and keeping your credit score high is one way to make yourself most eligible for a loan.

Providing salary slips and also showing all other kinds of regular income that you earn is another good way of improving your eligibility for a loan. If you are self-employed or own a business, then your bank statements and business accounts statements do the same job as your salary slips.

Your ability to quickly and easily get a personal loan is in your hands in these respects. Simply by paying attention to these factors you can make yourself an attractive borrower so that the lender is keen to give you a personal loan and to make it appealing to you, offer better terms too. Improving and maintaining your personal loan eligibility criteria will not only make it easier for you to get the loan but also save you money in the long run. Keep these tips in mind when you apply for your loan so that you can leverage the lender’s eligibility criteria to your advantage.

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