Apart from credit score, keep these things in mind for loan approval, otherwise trouble will occur
Lenders look at the credit score while giving a loan. They offer different interest rates and loan duration depending on your credit score. Gradually, it is becoming an important part of the appointment. While having a high credit score increases your chances of taking a loan, along with this there are other important criteria which are useful when assessing the application of the holder by the lender.
Age of borrower
While assessing the eligibility of the person taking the loan, the lender also looks at the age at the end of his loan term along with the current age. Those who do not come in the maximum and minimum age of cantilevered loan are generally denied.
In general, applicants who are close to retirement often find it difficult to get their credit application approved because the borrower usually prefers completion of the loan repayment time until the person retires. In such a situation, you can add a co-applicant to increase your loan eligibility and expectation of approval.
Minimum income qualification
Lending can be difficult for the borrower if the person does not meet the minimum income criteria set by the borrower. The minimum income requirement is determined by the geographical location of the borrower, which is metro, urban, semi-urban and rural.
Job profile and stability
Apart from your income, the lenders also look at your job type, job stability and your employer profile. For example, lenders are more comfortable in giving loans to government, corporate or MNC employees. They find it difficult in the case of employees of low-risk or high-risk companies. With this, the applicants whose job profile is dangerous, their chances of loan approval are also less. Apart from this, one who changes jobs repeatedly can also be difficult.
Fixed Obligation to Income Ratio (FOIR) refers to the ratio of total income that is being spent on repayment of loans, such as loan EMIs, credit card dues, etc. Lenders generally give priority to applicants whose FOIR ranges between 40 percent and 50 percent. If more than this, the loan application can be rejected.
Do not do research before loan guarantor
By becoming the guarantor of a loan of a person, you become equally responsible for his repayment. You will be responsible for the repayment of arrears on default of the primary lender. Therefore, it is important to look at your short and midterm financial needs before becoming a loan guarantor.