About the 5 factors that affect personal loan eligibility

Are you looking for personal loans in Chennai? If yes, it is understandable, as the cost of living in Chennai is high. The monthly estimated cost for a single person is around 25,000, even if they own the house. If you go in for a rented house in Chennai, the rent ranges from Rs. 7,700 to Rs. 34,000, depending on the locality.

The rent would be higher in the heart of the city. In a paying guest or hostel accommodation, the rent would start from Rs. 8,900 to 13,000, depending on the room sharing. You will have to pay more rent if you prefer a single room. Weather is another concern in Chennai. You would experience hot and humid weather and short winters. Almost everyone in Chennai keeps an air-conditioner, which increases the electricity despite getting some relief from the sea breeze.

If you need funds to meet your immediate financial needs, availing of a personal loan is one of the possible solutions that you could get. However, it would help you attain personal loan eligibility to enjoy the benefits.

What are the factors that affect personal loan eligibility?

Credit score

Banks have become cautious in lending money because of delinquency and defaults. Just as an employer checks the candidates’ references before selecting them, the financial institutes also determine the borrowers’ credit history before approving their loan application. The credit score is the credit history of the borrowers. It is one of the factors that decide personal loan eligibility. The banks and financial companies provide personal loans in Chennai to borrowers having a CIBIL score of 750 and above.

Employment status/company

The salaried individuals and professionals working in a reputed organization would stand a better chance of securing personal loans in Chennai. The banks also decide on the personal loan eligibility of the salaried professionals based on parameters like the number of years working in an organization. If a loan applicant has served the organization for more than two years, banks will get confidence that applicants will get their EMIs on time.

Bank loyalty

Bank loyalty is another determinant of personal loan eligibility. Banks would trust the borrower who has availed many services from them. Hence, owing to the excellent relationship with the bank, the borrowers would have a chance to obtain personal loans in Chennai.

Age & minimum income

The banks have set the following personal loan eligibility criteria on age and minimum income for approving personal loans in Chennai.

  • The borrower should have attained a minimum age of 18/21, with 60 being the maximum age limit.
  • The minimum income of the borrower should be Rs. 15,000 to Rs. 25,000.

Geographical location or housing situation

Banks would have determined the serviceable areas for the borrower’s loan eligibility. If borrowers’ locations are within that range, at least for a year, they would have a chance to secure personal loans.

Multiple loans

If a borrower obtains multiple loans, it will reduce their chance of getting a loan as it would add to their repayment burden. Hence, it would be better for a borrower to clear or reduce the existing debts to get new loans from a new lender. Banks would approve the loan application immediately if the borrower holds a good banking track record and is disciplined in their transactions.

Co-borrower/Guarantor

If your parents or spouses are the co-borrowers, it will improve the chances of procuring a loan from the bank. In such cases, banks lend money to borrowers even if they don’t have an excellent CIBIL score or don’t meet the income criteria. The co-borrower would also act as a guarantor to the lenders.

The banks also decide on the personal loan eligibility of the salaried professionals based on parameters like the number of years working in an organization. If a loan applicant has served the organization for more than two years, banks will get confidence that applicants will get their EMIs on time.

Conclusion

The banks set personal loan eligibility criteria for safeguarding their business in the abovementioned points.  They would issue personal loans in Chennai to the borrowers based on their financial standings, credit scores, lower number of debts, etc. Some banks also insist on a security or a guarantor before processing the loan application. The credit score is the credit history of the borrowers. It is one of the factors that decide personal loan eligibility. The banks and financial companies provide personal loans in Chennai to borrowers having a CIBIL score of 750 and above.

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