Factors impacting the personal loan application

Personal loans are Sanctioned to individuals on the basis of their past credit and income. It is a holistic approach, where the borrower borrows money from the lender and had to repay the debt in a fixed tenure. Loans are taken to fulfill the personal needs of an individual. Sometimes these loans are considered as ‘Unsecured loans’ because there is no collateral to secure personal loans. While applying for a loan it is advised to check the numerous bank’s personal loan interest rate.

5 factors that impact the personal loan application:

Below are the 5 factors that play a vital role in impacting your loan application:

1. Credit score:-

• According to the credit bureau of India, it is advised to have a CIBIL score of 750 or above for getting a loan sanctioned. You can get various online platforms where you can check your live credit score.

• Try to maintain an ideal credit score, otherwise, you can also opt for a co-borrower process. In an unsecured loan, the credit score is an important aspect to qualify.

2. Your Income scale:-

• The higher the income the lower will be the interest rate, the lower the income higher will be the interest rate on loans. Because banks consider that the borrower has the least chances of getting into the defaulted debt repayment stage.
• Every bank/NBFCs have some lower-income limit to get qualify for a loan. If the borrower is below the expectations of a lower limit, then there are fewer chances of getting a loan approved.  

3. Debt repayment history:-

• If you are an old customer of the bank, then the bank will have a look at your repayment history in order to approve a loan to you.
• If you had a good repayment history, then there are major chances of getting a lower interest rate from the side of the bank. So always try to maintain a good repayment history with your respective bank.

4. Your reputation with the bank:-

• Don’t be a defaulter in the bank you are going to apply for a loan, otherwise either they will offer you high-interest rate or they will reject your loan application. 
• Financial institutions also consider the relationship you are having with them. A borrower having good credit and income history can end up with a rejected loan application because of a bad relationship with the bank.
• While you can go and check the Axis Bank personal loan.

5.  Incomplete documents:-

• In the application verification process, if the bank finds your documents incomplete then the bank has the power to reject your loan application.
• You can go online and check the various documents that are required for a loan. 

We live in the world of digitization and it is very easy for a borrower to garner the knowledge about the eligibility criteria. So try to avoid these small mistakes and earn a loan for yourself.

Must read:- Personal Loans For Everything