Keep These In Mind When Seeking Personal Loans
Each one of us looks forward to borrow personal loans from the banks at least once in life. As the name suggests, these loans are borrowed when you’re in need of a household product, financing your child’s education, going on an exotic trip with those cheerful people in your lives, etc. Personal loans, generally known as unsecured loans, do not demand any kind of security from the borrowers. Planning to finance a personal loan for a specific reason? I would suggest you focus on the following points, which banks strongly consider before sanctioning the loan:
- Your Present Salary
The income that you are earning today will play a direct role in banks figuring out your capacity to repay the loan. Along with that, banks are keen to know the amount of debt which you are presently owing. The authorities check the debt-to-income ratio to know if you will be able to pay loan conveniently, after fulfilling your basic necessities. The lower this ratio, the more are the chances to be in the good books of banks.
- Employment Records
Individuals with stable employment history have a fairer chance of getting their personal loans approved, than the ones who just keep on switching their jobs every now and then. However, independently self-employed people like myself will have to make a few extra efforts of providing in-depth knowledge of the financial stability for getting loans approved. Sounds scary, but is actually not!
- Calculating Equated Monthly Installments
Equated Monthly Installments are calculated on the grounds of your current income and monetary commitments. For knowing how much EMI you need to pay every month with respect to your financial sources, you may either use an e-EMI calculator or ask the bank authorities to assess the right amount for you.
- Your Credit Score
When banks are not paying much attention to the security norms, it is well understood that they will like to judge your potential of loan-repayment with the credit score. Having a credit score that crosses the 700 mark? If this is your current situation, you are going to be entertained by every reputed bank for personal loans. The persons with less than this mark should start looking for certified online lenders, who are especially serving the borrowers with lesser credit rating.
- Sound Repayment Capability
If you have struggled somewhere in life for repaying loans, unfortunately, it is going to be against you. Banks always prefer candidates who gently pay their EMIs on time, and don’t create any fuss later on. Why only banks are to be cursed? Don’t we just feel embittered when someone not pays us the money back on time? Wink!
Other crucial factors such as your age, utilization of the money lent, relationship with the bank, etc. can also play the role of a hero or villain for you in this scenario. In case, you have been sanctioned the first personal loan of your life, then focus more on its timely repayment. Trust me, this will ultimately add brownie points to your prospective loan application (be it of any kind).