So How is your Personal Loan Eligibility Determined?
All banks, before giving you any type of loan, check your ability to repay - after which they will assess whether you are eligible for a loan or not. So, how do they determine the validity of your loan? There are a few procedures they are looking at, but more importantly, they are using some basic statistics to determine if you have the financial ability to repay the loan. You can check your loan eligibility by using your loan calculators available for free online.
Basic Calculation methods used by the banks to Determine Personal Loan Eligibility-
Installment Income to Ratio or IIR:
By calculating the IRR, banks determine your repayment capacity. Based on the understanding that the loan amount does not exceed your repayment amount. The average is usually 33% to 40% of your monthly salary. Banks use the IIR to determine the loan amount and repayment amount.
Fixed Obligations to Income Ratio or FOIR:
When deciding whether to repay your loan, banks use FOIR to determine if you have other loans you pay. FOIR is the most popular calculation used by banks to determine if you have the ability to repay the loan.
Loan to Value Ratio or LTV:
These calculations are used by banks to determine your eligibility for a home loan. Here, determining the value of a loan is based on the value of the asset. However, to determine your ability to pay, your salary is considered.
Although most banks and NBFCs offer personal loan, you can avoid unnecessary visits to banks and rush through paperwork using DialABank, a quick and easy way to apply for a personal loan. To avoid rejection of your application, you need to meet certain eligibility criteria and documents.
Factors Affecting the Eligibility of Canara Bank Personal Loans-
Monthly Income:
You can apply for a loan if you earn a minimum of INR 10,000 per month. But the disbursement of the loan will also depend on which EMI is proposed. If you exceed 60% of your monthly income, the loan amount may decrease.
Age:
Applicants over the age of 21 are eligible for a loan from Canara Bank Personal Loan, And your retirement age is the peak period for your loan growth.
Monthly Expenses:
The applicant's monthly expenses are taken into account to determine the applicant's creditworthiness. If your costs are high, they may affect your EMI or interest rate.
Any Other Loans:
If you have an existing debt you are required to state the EMI you are paying and the amount you are saving after payment. Because all the money you earn is a source for paying the Canara bank personal loan.
Credit history:
Your credit history or credit card debt plays an important role. Because it shows your creditworthiness.
Employment Stability:
Canara Bank approves individual loan applications for people with 2 to 3 years of work experience in the current organization
Bank Relations:
Canara Bank personal loan can be availed for credit cardholders only. Therefore, if you have a long-term salary and bank account, your personal loan application will be approved by a government-owned lender.
Your Employer Category:
Employees of well-known PSU, Joint Stock Companies have confirmed Central or Government Officials. Teachers, Asst. Professors, Professors of Colleges and Research institutes and Universities can get loans. And people working for IT or BT companies can also get a loan.
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