A personal loan eligibility calculator is a tool that helps one calculate one’s capability of taking a personal loan from a lender according to their terms and conditions. For checking this eligibility the calculator considers different factors such as monthly income nature of employment, CIBIL score, etc. So, to experience a smooth approval process one must know these criteria. These calculators can be used by both self-employed and salaried people. One only needs to enter the essential details like loan amount, interest rate and tenure and they can understand whether they’re capable or not. This article will cover everything about the personal loan eligibility calculator from benefits to the documentation required.
Factors Affecting Personal Loan Eligibility
Various lenders offer personal loans and the easiest way to get these loans is through an app. Research the best app for personal loans before applying. Apart from selecting the app, one must consider various factors that affect loan eligibility. These factors are mentioned below.
Age
Lenders consider your age during the approval process because this determines your ability to repay the loan. So a borrower must be 18 or above.
Monthly Income
Another considerable factor is the monthly income earned. Most lenders consider this to check your repayment ability. Also, the higher will be your income, the higher the amount of loan you’ll be able to apply for.
Credit Score
This is one of the crucial factors lenders consider when deciding to approve your application or not. This indicates the lenders about your repayment ability and how well you settled your earlier debts. Most lenders ask for a minimum score of 750.
Employment Nature
A personal loan can only be applied for if one has a stable income. This stale income can come from two sources, either from your job or from your business. So lenders check whether you have stable employment to repay the loan or not.
Documents Required for Personal Loan
A loan application requires some documents to be submitted to get the approval. Some of the essential required documents include the following.
Identity Proof
Lenders ask for your identity proof to save themselves from the risk of defaulting borrowers. An ID helps to inform the lenders that you’re a permanent citizen of India and will not leave the country after taking a loan. One can provide Aadhar, PAN, etc for this proof.
Address Proof
Lenders ask for your address proof to be sure that you have a residential address. For this, they might ask you for documents like electricity bills, utility bills etc.
Income Proof
They ask for your income proof to be sure that you’re capable of repaying the loan. For this, they ask for your salary slips or if you’re a business owner then your profit & loss statements. So, one must arrange everything in advance.
Employment Proof
Lenders ask for employment proof because this helps them know you’re capable of repaying the loan. Also, this reduces the risk of defaulting on the loan. So make sure you can provide the offer letter or any other employment proof.
Benefits of Personal Loan Eligibility Calculator
Personal loan eligibility calculators offer various benefits. The best app for personal loan can provide an intuitive and accurate calculator which will help you in many ways. Let’s look at the key advantages offered by the personal loan eligibility calculator.
Select the Right Loan Amount
The eligibility calculator suggests the maximum amount you can apply for based on your financial situation. This helps in selecting the right loan amount which can be easily repaid by you. This will improve your chances of approval.
Knowing EMIs in Advance
After you decide on the loan amount you want to take, the next step is to check the EMIs. If the EMIs are higher, one can lower the amount of loan that they wish to take.
Finding Alternate Sources
Another benefit of using an eligibility calculator is that it tells you whether a particular lender will meet your requirements. This in turn helps consider other alternatives that can help you get financing.
Quick Calculation
The calculator offers a quick and convenient way to check eligibility. These calculators require a few inputs to provide you with the calculation. They include loan amount, tenure, interest rate, etc.
Conclusion
A personal loan eligibility calculator helps one check their eligibility before applying for a personal loan from a particular lender. This helps one understand whether the lender meets their requirements or not. Apart from this, various other eligibility calculators offer several benefits like selecting the right loan amount, knowing EMIs in advance, considering alternate sources, quick calculation, etc. However, only considering the benefits is not enough. You must research thoroughly which calculator might suit your requirements.
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