What influences the Personal loan eligibility calculator

Posted by Pravansh Mehta on January 13th, 2021

A personal loan is an unsecured and offered by banks or NBFCs to meet your funding purposes. The borrowed money must get repaid along with the interest rate over the said duration. Since a personal loan is unsecured, you need to be aware of your eligibility, which simplifies the application process. This is where the personal loan eligibility calculator comes in handy.  

What is a personal loan eligibility calculator? 

If you need some money and seek to apply for credit, you can check if you are eligible to get a personal loan. This can be done with the help of a personal loan eligibility calculator. Many banks offer this facility on their websites, or else you can check on a third-party financial services website as well.  

Factors affecting the eligibility criteria for a personal loan 

• Income – one of the most crucial factors is that an applicant must have a steady and regular income source. If you earn a high salary or above-average standards, the chances of getting a personal loan are high. Higher the income, the better the chances. 
• Credit score – a bad credit score can affect your eligibility for personal loan. Before granting a loan, the bank or any financial institution will seek the borrower's repayment and his credit history to support the fact. The bank will not give a loan based on the words that you have a good credit score. Your previous loan history and repayment will be cross-checked to see if you have any default in the payment.
• Employment history – a fresher who has just got a job has fewer chances of getting a personal loan. The eligibility is high when the borrower is having a good number in the experience history. If the borrower has a good experience history with the same company, they are likely to get personal loans. If the borrower switches between his jobs and has so many employers' records, the chances are low for getting a loan. 
• Repayment capacity - if you are earning a low income, consider choosing longer tenures, resulting in lower EMIs. If you have a low income and are looking for short terms, the bank might not approve your loan application.  

Personal loan eligibility gets determined, considering these factors mentioned above. Apart from these, there are several minor factors that a bank considers while granting a loan. Make sure; you borrow funds that meet your income and expense table.