Personal Loans are beneficial to pay your debts, buy cars, host weddings or manage other personal expenses. Now, applying for Personal Loans and receiving them has become easier than ever with new-age NBFCs like Clix Capital. Now, you have a reliable financial partner to help you find the most suitable Personal Loan option.
With the objective of empowering youth with financial freedom, Clix Capital has been sharing resources and facts consistently. In the same breath, we want to help you understand factors that affect personal loan eligibility. Read on.
6 Factors that Affect Your Personal Loans
Listed below are six factors affecting a Personal Loan application. You need to take care of these parameters to qualify for a Personal Loan and get instant approvals.
Your Current Income
One of the most important factors affecting a Personal Loan is your current income.
NBFCs often consider whether you can pay back the amount you borrow. A borrower with a stable monthly and yearly income is much more reliable than a borrower with an inconsistent income.
If you cannot show a steady income source, you must pledge some collateral to convince the loan provider that you can repay the loan amount and EMIs without any hassles.
Existing debt is another major factor that affects your loan eligibility. Usually, if the borrower has a history of taking debts and not returning them or returning them late, NBFCs hesitate to give them Personal Loans.
Debts include credit card debt, education loans, mortgages, and other loans. Hence, it is advisable to clear all your previous debts on time so you can get loan approval without any hassles.
Repaying loans on time also shows that you are a reliable borrower and can be offered the loan without much scrutiny.
Your Existing Credit Score
Your credit score is an important factor that affects your Personal Loans. A credit score is a number that reflects your credit history. This number lets the NBFC determine how punctual and particular you have been in your financial dealings.
Clix Capital undertakes Experian Score to check the creditworthiness of a borrower. The Experian Credit Score numerically summarises your credit information report and is calculated by Experian India. It ranges from 300 to 900. The idea is that the closer your score is to 900, the higher your chances of getting a loan.
Maintaining a good credit score is important to make the personal loan application process smoother. For example – Clix Capital asks for an Experian score of 630 as a good credit score to provide Personal Loans.
If you do not have a credit history, you can consider taking a small loan and paying it back on time. You can also pay back any credit card bills you may have on time to maintain a good credit history.
Personal Loan Types
The kind of Personal Loan you want to apply for is another major factor that may affect your Personal Loan eligibility criteria.
There are essentially two types of Personal Loans- secured and unsecured. You need to mortgage an asset for secured Personal Loans but unsecured loans are collateral-free.
Unsecured Personal Loans are also easier to apply for. So, you can go for an unsecured Personal Loan instead of a secured one and avoid risking your collateral security.
When you take an unsecured Personal Loan from Clix Capital, you can choose from several options like travel, education, home, wedding, medical emergency and home renovation, or expansion.
Your Employer’s Background
Another factor affecting your Personal Loan eligibility is your employer’s status, history, and background.
When you work in an esteemed or well-known organisation, there is a possibility that the NBFC will sanction the loan faster. Plus, there are times when NBFCs may give you flexible payback terms if you belong to an esteemed organisation or an organisation known to the lending institution.
An important Personal Loan eligibility criterion to consider is the repayment term. Some borrowers choose a shorter term for a bigger loan amount and struggle to pay the instalments on time, adversely affecting their credit score. When you take a Personal Loan, consider a tenure that allows you to repay the loan easily.
You can use the Free Personal Loan EMI Calculator on Clix Capital to estimate your loan EMI amount, tenure and interest rate. Make sure to pick one that suits you best and is not too stressful. At Clix Capital, you get flexible tenures of 12 to 48 months with the facility of repayment in easy instalments, making it easier for the borrowers to repay the loans on time.
These are six of the most important factors that affect your loan eligibility. While applying for Personal Loans, keep all documents ready and check Personal Loan eligibility to make the process simpler and hassle-free.
You can get instant Personal Loans with quick approvals and flexible repayment terms. The process can be completed online, making it easier for anyone to obtain a loan anytime, anywhere.
Clix Capital asks for minimum documentation to apply for a loan. The best part is that you can easily check your Personal Loan eligibility criteria on their website. You can also use the Personal Loan Calculator to calculate your EMIs before applying for a loan.