One may need loans for many reasons. Many banking firms can assist them. Each lender has its own criteria for the types of people to whom they extend their services. These factors affect one’s personal loan eligibility.
One can now check their eligibility using an online personal loan eligibility calculator. They can simply access their pros and work on their cons to improve their chances of getting a loan.
In this article, one will look at all the factors and what one can do to improve their chances of getting a loan.
What is a Personal Loan Eligibility Calculator?
The personal loan eligibility calculator helps one find the highest personal loan amount one is eligible for; it is also known as a personal loan checker or personal loan limit calculator.
Simple information like the desired tenure, net monthly income (in Rs.), and monthly costs (in Rs.) must be entered (in months). A person can determine how much money he can get after entering all the information into the personal loan eligibility calculator.
Many lenders use various methods to check loan eligibility. Personal loan eligibility is decided based on the person’s fixed monthly income status. Some lenders use the FOIR (Fixed Obligations to Income Ratio) method to figure out who can get a personal loan and what the terms of the rebate are.
The formula for checking a lender’s eligibility through FOIR is:
FOIR = (Total Existing Obligations/Net Monthly Salary) x 100
People can also check EMI amounts using this method. The Net Monthly income (NMI) method is another great way to check a person’s eligibility.
Lenders use a multiplier based on the person’s net monthly income to determine the highest loan amount. NMI allows one to get up to 30 times their net monthly income.
How Does an Online Personal Loan Eligibility Calculator Work?
It is very simple to use the online personal loan eligibility calculator. One only needs to type in the data given below:
- Months of Tenure: One should choose a number from the list.
- Qualification: The person should choose their job qualification. It includes Company Secretary (CS), Chartered Accountant (CA), doctor, etc.
- Net Monthly Salary: A minimum net monthly salary of Rs. 20,000 is needed.
- Fixed Monthly Funds: This involves any other EMIs one may be carrying and the basic monthly living costs.
The person should enter these values into the personal loan eligibility calculator. They can see how much they can get this way.
Factors That Affect Personal Loan Eligibility
The factors affecting personal loan eligibility are given below:
One of the most vital factors affecting personal loan eligibility is the credit score. If a person has a credit score of 700 or higher, they will be regarded as more financially stable. They will find it easier to get a personal loan.
As a result, banks and NBFCs choose to provide loans to people with good credit. If one has a good credit score, they can also benefit from many interest rate deals and special offers. So, it is always advised to keep the credit score as close to 900 as possible.
One of the many factors that may impact personal loan eligibility is the employer’s reputation. Many banks give personal loans to self-employed and salaried people. But, people with a stable income may get a lower interest rate than self-employed people.
Usually, government workers are chosen first, followed by reputable corporations and MNCs. For salaried people, if they have more work experience and have been good workers for their company, they can get a referral from their company. It will make their personal loan much easier to get.
Age is one of the most vital factors in deciding whether a person is eligible for a personal loan. One’s monetary stability is determined by their age. They will not be able to take a personal loan if they are too young or too old. Many banks have a set of criteria for people who wish to avail themselves of a personal loan. If the person is over the age of 60, they are no longer eligible for a personal loan. Personal loans are usually available to people aged 21 to 60.
A person’s income is the most crucial factor in deciding their personal loan eligibility. When a person takes out a loan, they must be financially stable enough to pay back the loan amount plus interest. A personal loan will not be given if they do not have a stable source of income.
Most banks give personal loans to those who have an EMI ratio between 50% and 55%. Also, the loan amount cannot be greater than 50% of the person’s yearly income.
Benefits of the Personal Loan Eligibility Calculator
There are many benefits to loan eligibility calculators. These are given below:
One Can Avoid Loan Rejection
If the personal loan eligibility calculator shows that the person is not eligible for a specific loan amount, they can work on ways to boost their monetary status. They can lower the chance that their loan request will be denied in this way.
Save Time and Energy
With the help of a personal loan eligibility checker, one can check in less than a minute whether they meet the criteria for a personal loan from a single lender or from many lenders. So, it saves people time and energy.
Quick and Accurate Results
It only takes a few clicks to determine a person’s eligibility for a personal loan using a calculator. It automates the calculation, fulfills it in a matter of minutes, and gives a precise estimate of the amount of the loan.
Accessibility and Usability
Even if one lacks much financial background, one can still use the eligibility calculator. They are accessible and available online.
The best way to figure out a person’s loan eligibility is to use a personal loan eligibility calculator. The person will find the monthly EMI, total interest costs, and total rebate amount.
Many factors affect the eligibility of a person wishing to avail themselves of a loan. But, once the person has considered all of the factors that go into defining how reliable they are from a lender’s point of view, they can work to boost their chances.
This service is provided by many lending firms, including banks and NBFCs. All one has to do is find the best match for their needs.
One can visit Piramal Finance for more details related to a personal loan eligibility calculator. They can also explore their products and services.