Planning is a great aspect of life. Being prepared gives anyone an advantage over uncertain situations. This is why planning your personal loan before taking it will be beneficial. This can be done by making the best use of available tools like personal loan eligibility calculator as they have many benefits. Read this article to have a better understanding of what loan eligibility calculators are, how you can use them, and more.
A personal loan is basically a sum of money you can take when you are in need of financial support. It is the perfect loan to take during emergencies due to its flexibility. However, taking a loan will mean an extra burden on expenses and financial independence. It requires a lot of management, planning, and preparedness. This is why calculating your eligibility for a loan is very important. It keeps you one step ahead of your financial situation.
What Does Personal Loan Eligibility Mean?
Personal loan eligibility refers to a set of criteria a person should meet in order to be considered eligible for a personal loan by banks and financial institutions. These criteria may include a variety of factors like the borrower’s age, location, credit score, income, employment status, and financial history.
Here’s a list of points you must consider while considering a personal loan:
- Lenders use factors like borrowers’ age, location, and credit score to check the risk associated with providing credit to an applicant.
- If borrowers have a high credit score, a steady job, and a decent income history, they may be readily qualified for a loan.
- Individuals with lower credit scores, unstable employment, or a history of missing EMI payments may find qualifying for a loan less simple.
- Personal loan eligibility criteria may differ from lender to lender and depend on the loan you apply for.
- Some lenders have more stringent eligibility criteria than others, and certain loans require additional documentation or collateral to be considered eligible. In such cases, applicants can use online loan eligibility calculators to increase their chances of approval.
Also Read: How to Get a Personal Loan: A Complete Guide on Eligibility and Documents
Therefore, an applicant needs to know the eligibility criteria and the factors affecting their eligibility for a personal loan before availing of the loan.
Factors Affecting Your Personal Loan Eligibility
Finding out the eligibility for a personal loan should be the first step one should take before availing of a personal loan. The applicant should know whether they are eligible for getting a loan.
Various factors determine whether a person is eligible to get a personal loan. Some of the factors are,
A good score would mean having a score of 750 or more. With a score of 750, the chances of getting a loan are not only high, but you can also get a good loan amount, better repayment plans, and even a low-interest rate. Anyone with a credit score below 750 will be eligible for a loan. However, the loan amount may be limited, and the interest rate may be higher.
A good credit score is crucial as it represents an applicant as creditworthy. Bankers give out loans to individuals with good credit scores as they have proved to be responsible borrowers who will be less likely to default on a loan.
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Income is a determining factor in whether an individual is eligible for a loan. It determines whether the applicant can afford the repayment of the loan. The more an individual earns, the more eligible they will be for a loan.
Usually, the minimum income requirement for applicants is Rs 15,000 – 25,000 per month, depending on the bank or financial institution. However, the minimum income eligibility may also vary depending on whether the applicant is a salaried or self-employed individual. This is because an applicant must have income stability in order to be eligible for a personal loan.
Fixed Obligations to Income ratio (FOIR):
Another critical determinant of loan eligibility is FOIR or Fixed Obligation to Income Ratio. FOIR is the applicant’s disposable income that they can use for loan repayment. Banks and financial institutions will calculate an applicant’s eligibility after considering their FOIR, as it determines the ability of an applicant to repay a loan. Repayment of loans is made through monthly EMIs, and many factors come into play while calculating an EMI, such as money for rent, food, transportation, and other necessities. These basic necessities must be met even after paying an EMI. Therefore, FOIR is strictly considered while designing the EMI according to an applicant’s income.
Place of employment:
Where you work also determines your personal loan eligibility. Working in big and prestigious companies will increase your chances of getting a loan. An applicant working in an MNC or a big company will be considered less risky than someone working for small businesses or companies. This is because MNC employees have more secure and stable jobs as the company is less likely to shut down their business. A steady income means the individual will be less likely to default on a loan. People with stable incomes will also get low-interest rates.
Financial stability is essential when it comes to personal loans. Therefore, banks and other financial organisations favour those who have steady work. This is due to the fact that, depending on the EMI plan, a loan payback may take a year or five years to complete. Therefore, a person with steady employment will be viewed as secure and stable.
The applicant’s age is another significant factor determining eligibility for a personal loan. Loans are given to people who are between 18 – 60 years of age. The younger the applicant, the more chances they have to get their loan approved. This is because younger applicants have a better chance of repaying the loan.
These are the factors that can affect the loan eligibility of an individual. Let’s look at the eligibility criteria of personal loans from different banks and top NBFCs.
Personal Loan Eligibility From Banks and Top NBFCs
|Lenders||Eligible Loan Amount||Minimum Eligible Income||Eligible Age|
|PaySense||Up to ₹5 lakh||₹18,000 per month||21 to 60 years||Apply Now|
|Bajaj Finserv||Up to Rs. 25 Lakh||Rs. 25,000 per month||23 to 55 Years||Apply Now|
|Aditya Birla Capital||Up to ₹15 lakh||₹15,000 per month||23 to 60 years||Apply Now|
|Money View||Rs. 10,000 to Rs. 5 Lakh||Rs. 13,500 per month||Above 18 Years||Apply Now|
|Canara Bank||Up to Rs. 5 Lakh||On a case by case basis||Above 18 Years||Apply Now|
|Indian Overseas Bank||Up to Rs. 5 Lakh||Over Rs. 5,000 per month||Up to 60 Years||Apply Now|
|Kotak Mahindra Bank||Rs. 50,000 to Rs. 15 Lakh||Rs. 20,000 per month (net)||21 to 58 Years||Apply Now|
|RBL Bank||Rs.1 Lakh to Rs. 20 Lakh||Rs. 20,000 per month||25 to 60 Years||Apply Now|
|Union Bank of India||Up to 10 Lakh||Rs. 15,000 per month||Above 18 Years||Apply Now|
|YES Bank||Rs 1 Lakh to Rs 40 Lakh||On a case by case basis||22 to 58 Years||Apply Now|
Note: The interest rates of banks are subject to change, so do visit their official website to get their updated rates.
It is wise to consider these factors beforehand and check if you are eligible for a personal loan using a personal loan amount eligibility calculator.
What Is A Personal Loan Eligibility Calculator?
Many banks, financial institutions and loan aggregators have online tools known as personal loan eligibility calculators. These calculators enable borrowers to check their eligibility for any personal loan. The calculators help determine whether the applicant is likely to be approved for the loan based on several factors. These factors include age, income, credit score, and employment status. Before applying for a loan, borrowers can quickly see if they fulfil the lender’s eligibility requirements by putting their information into an online personal loan eligibility calculator, which is available on their website.
Customers can also use eligibility calculators to analyse various loan products and determine which lenders might give them the best rates based on their financial situation. These calculators are helpful to applicants in letting them know the probability they have of getting their loan approved. This can help borrowers save time and avoid needlessly applying for loans that are unlikely to be accepted, which could harm their credit scores.
It’s important to remember that using an eligibility calculator does not ensure loan acceptance. At the end of the day, lenders will decide whether to accept or reject a loan application based on their methods and standards, which may differ from those utilised in the eligibility calculator.
An eligibility calculator is highly beneficial during the loan application process. Using a personal loan amount eligibility calculator comes with a list of benefits and advantages.
Also Read: Plan Your Finances Better with a Personal Loan EMI Calculator
Benefits Of A Personal Loan Eligibility Calculator
Using a personal loan eligibility calculator will help you understand the loan amount you are eligible to get depending on your income and repayment capacity. There are also many other benefits of using this online tool.
Some of the benefits of using a personal loan eligibility calculator include the following:
Helps in Preventing Loan Rejection:
Using a personal loan calculator will help you determine whether you are eligible for the loan amount you require. This way, you can apply for the amount you are sure to be approved instead of getting rejected.
You can input your details into the calculator to know the amount you can be eligible for. Different calculators will ask for different information, but some general ones will be your net income, expenses, date of birth, and location. After calculating the amount, you will get the estimated loan amount you are eligible for. Going by the estimated amount, you can either apply for the loan or choose to improve your eligibility.
Knowing your loan eligibility will help you avoid getting a loan application rejected. A rejected application will mean that you lose your processing fees, which will impact you negatively if the funds you require are for an emergency.
Prevents a Negative Impact on your Credit Score:
When applying for a personal loan, bankers and financial institutions will look into the applicant’s financial history. To determine their creditworthiness, they will assess the individual’s credit records and conduct a hard inquiry. If a loan gets rejected by multiple bankers, the applicant will have to apply to another institution which will again conduct a hard inquiry. More inquiries in a short time will cause the individual’s credit rating to be negatively affected and fall. Using an eligibility calculator will help to avoid lowering your credit score.
Helps to Understand an EMI:
Taking a personal loan will mean an added financial burden, as you must repay the loan in equal monthly instalments. Therefore, before availing of a loan, it is crucial to understand if you can afford to pay the monthly EMI. Calculating your eligibility beforehand will help you understand how equipped you are to take on a loan.
Paying an EMI every month will put a lot of stress on your income, and missing a payment will have many consequences. There are several fines and penalties that you will have to pay when you miss out on a payment. Your credit score will be affected as a missed payment will be reported to the credit bureaus. Using an online personal loan eligibility calculator, you can calculate the estimated EMI. You can increase your tenure or take a smaller loan if the estimated amount is too high.
Helps you Find the Best Lender:
In a competitive market where different banks offer different interest rates, tenures, and varied terms, finding the best lender that will suit your needs may be difficult. However, with the help of an eligibility calculator, you can compare the different rates and choose the best one.
You can compare loan offers from one bank to the other, the difference in interest rates, processing fees, and the different loan tenures each bank offers. Using an eligibility calculator will help you choose the best loan terms that are suitable for you.
Quick and Accurate Result:
Traditionally, an applicant’s eligibility will be determined by the bank after the application process. This takes a long time, and that is not ideal in emergencies. However, with the availability of online loan eligibility calculators, applicants can now get quick and accurate information regarding their eligibility. They can now apply for a personal loan with confidence and ease of mind as it is sure to get approved.
Now that we have learnt the benefits of using an online personal loan eligibility calculator, we should know in-depth information on how to determine loan repayment with an eligibility calculator.
Also Read: Buddy Loan: The Best Lender for an Instant Personal Loan
How To Calculate Loan Repayments With An Eligibility Calculator?
Determining loan repayment before applying for a personal loan is a smart move. Any responsible borrower will ensure they can repay a loan before availing it. This will help them make timely EMI payments and avoid penalties and fees. Timely repayment is also vital because it improves credit scores and financial stability. A personal loan eligibility calculator is one of the best ways to determine a loan repayment.
To determine loan repayment with an eligibility calculator, there are a few simple steps that you can follow:
Enter Correct Information:
Open the eligibility calculator website and input all the correct and necessary details of your personal information, like name, age, income, and employment status. Also, the details about the loan you are applying for, like the loan amount and tenure, should be entered. Correct information will get you a more accurate estimation of the loan repayment.
Eligibility is Important:
Before determining the repayment terms, the calculator will confirm whether the applicant is eligible for the loan. The applicant’s eligibility will be determined based on the criteria put down by the lender. This may include the applicant’s credit score, income, employment history, age, etc. Once the eligibility is confirmed, the details for the repayment will follow.
Based on the loan amount and tenure they need, the eligibility calculator will automatically give the applicant a rough estimate of the repayment terms. The estimate will include the EMI payable for each month, the interest that will be paid over the life of the loan, and other fees.
By using the personal loan eligibility calculator, an applicant will better understand their financial situation. If the repayment estimate is not up to the expectations of the borrower can adjust the loan amount or the loan tenure to fit their budget. Once the necessary changes are made, the borrower can go through the calculator process again to determine the new repayment estimate.
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Using a personal loan eligibility calculator, borrowers can make informed decisions about a loan and plan their finances accordingly. Furthermore, the importance of loan repayment cannot be overstated. It is crucial to make timely payments to avoid penalties and damage to credit scores. Now let’s delve into the importance of loan repayment.
Also Read: Good Credit Score But Still Rejected Loan? Top 10 Reasons For Loan Rejections
Importance Of Loan Repayment
Loan repayment is significant as it directly affects your financial history. It is vital to maintain a good credit score. Your repayment habit can either improve your credit rating or negatively impact it. Missing repayments will lead to penalties, fees, or even legal action, impacting your financial standing. Timely repayment of loans will help reduce your monthly financial obligations and improve financial stability. More importantly, regular repayment will reflect positively on your borrowing history and show you are a responsible borrower. This will enhance your credibility as a borrower for future financial needs.
Also Read: A Guide to Managing Personal Loan Repayment
The personal loan eligibility calculator is a crucial tool for finance. It will make the loan application process easier and the loan process quicker. While it is an excellent tool to determine the eligibility and repayment terms of the applicant, it should be noted that actual loan terms may vary slightly. This is because the loan terms will depend on the different lenders and factors such as interest rate, fees and terms and conditions of the loan agreement. However, making use of it will only benefit the borrower.
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Frequently Asked Questions
Is the result of a personal loan eligibility calculator accurate?
The result of a personal loan eligibility calculator is an estimate and not a guarantee of approval for a personal loan. The accuracy of the result depends on the accuracy of the information you provide. Lenders may have their criteria and policies for approving personal loans, which may differ from the criteria used by the calculator.
What information do I need to use a personal loan eligibility calculator?
To use a personal loan eligibility calculator, you typically need to provide information such as your income, expenses, credit score, employment status, and loan amount required. Some calculators may require additional information, such as age, residency status, and debt.
Can I use a personal loan eligibility calculator for all types of personal loans?
Personal loan eligibility calculators are designed to work for most personal loans, including secured and unsecured loans. However, some calculators may be specific to certain types of personal loans, such as payday loans or debt consolidation loans.
How can a personal loan eligibility calculator help me?
A personal loan eligibility calculator can help you determine your eligibility for a personal loan and estimate the loan amount you can qualify for. This can help you plan your finances better and make informed decisions about applying for a personal loan. Additionally, it can save you time by giving you an idea of your eligibility before you start the loan application process.