Showing posts with label Loans. Show all posts
Showing posts with label Loans. Show all posts
Personal Loan, Loan for Individual Person, Personal Loan Eligibility, Free Personal Loan Eligibility.
Personal loans are provided by various banks and non banking financial companies (NBFCs). There are various factors which effect the your personal loan eligibility. Below mentioned are some of the few factors which the bank or the NBFC will consider while they decide on your personal loan eligibility.
Financial Background This is the most important parameter that determines if you are eligible for a personal loan and also the quantum of personal loan you are eligible for. It will help the bank understand how well you can pay back your loan. Every bank will have a minimum level of income to be eligible for a personal loan.
Credit History This will help the bank ascertain your track record for payment of EMI of any loan or the payment of the credit card bills. In case you have paid all your previous EMIs and credit card bills on time, chances of your getting the loan is higher.
Company in which you are employed Personal loan eligibility may depend upon the company you are working for. In case your company is a public ltd or among the A class companies, which the banks call them as, the chances of you getting a loan becomes very easy. If you are working for a B class company, then getting a personal loan may be difficult for you or it maybe costlier also compared to a person who is working in an A class company. Which means that if you are working for a company which belongs to the A class according to the bank, then the personal loan rate would be comparatively lower to a person who belongs to a B class company.
Any other loans you may be holding In case you are having any other loan at the given point of time, then your eligibility for personal loan may go down as you are already paying towards EMI of the previous loan and the income in your hand would be lower compared to a case where you are not paying any EMI.
Financial Background This is the most important parameter that determines if you are eligible for a personal loan and also the quantum of personal loan you are eligible for. It will help the bank understand how well you can pay back your loan. Every bank will have a minimum level of income to be eligible for a personal loan.
Credit History This will help the bank ascertain your track record for payment of EMI of any loan or the payment of the credit card bills. In case you have paid all your previous EMIs and credit card bills on time, chances of your getting the loan is higher.
Company in which you are employed Personal loan eligibility may depend upon the company you are working for. In case your company is a public ltd or among the A class companies, which the banks call them as, the chances of you getting a loan becomes very easy. If you are working for a B class company, then getting a personal loan may be difficult for you or it maybe costlier also compared to a person who is working in an A class company. Which means that if you are working for a company which belongs to the A class according to the bank, then the personal loan rate would be comparatively lower to a person who belongs to a B class company.
Any other loans you may be holding In case you are having any other loan at the given point of time, then your eligibility for personal loan may go down as you are already paying towards EMI of the previous loan and the income in your hand would be lower compared to a case where you are not paying any EMI.
In case you are self employed, you can use this calculator to find out your personal loan eligibility based upon certain factors.
Types of Loan
Bank loans are an excellent source of finance for short-term and long-term credit needs. Borrowers typically qualify for bank loans on the basis of their creditworthiness. Most lenders fix interest rates on the basis of the borrower’s credit rating. A higher credit rating is demonstrative of a borrower’s sound financial standing, which enables lock-in at a lower interest rate.
Bank loans are an excellent source of finance for short-term and long-term credit needs. Borrowers typically qualify for bank loans on the basis of their creditworthiness. Most lenders fix interest rates on the basis of the borrower’s credit rating. A higher credit rating is demonstrative of a borrower’s sound financial standing, which enables lock-in at a lower interest rate.
The scope and coverage of bank loans vary from lender to lender. Most lenders have strict terms governing the loan proceeds. Depending on need, borrowers can consider the following dedicated loans:
Business Loans: These loans may be long-term for funding asset procurement or short-term for financing working capital requirements. Startup entrepreneurs may be required to offer collateral. Moreover, borrowers are asked to present a business plan to become eligible for such loans.
Student Loans: These loans are intended for funding higher education in the absence of scholarships and grants. Initially, student loans only covered tuition. Currently, education loans cover other expenses pertinent to a college education, including accommodation, books and supplies. Student loans in the US are offered by private financial institutions, as well as the US federal government. The latter accompanies lower interest rates and flexible repayment terms.
Home Loans: These are long-term loans, with repayment periods as high as 30 years. The interest rate on such loans may be fixed or adjustable, varying according to the financial market. A borrower may also opt for balloon rate home loans, where interest rates are very low for 7-10 years of the loan duration, after which they have to repay the entire loan balance at once.
Car Loans: These loans may be acquired to purchase new or used cars. The average payment duration on a car loan is usually five years. Most car loans are unsecured, since the vehicle itself is put up as collateral and may be repossessed should the borrower fail to meet loan payments.
Finally, one may consider applying for a cash loan, if they do not fit into the following categories. However, note that cash loans have extremely high interest rates and must only be used as a last resort to fund short-term credit needs.
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