Whenever we need a loan, the first thing that comes to our mind is our CIBIL score range, and it should be so because your CIBIL score range (like CIBIL, Experian, Equifax) indicates whether you are eligible to get a loan, a good CIBIL score range means that the interest rates will probably be cheaper and you will get a chance to get a loan.
Apart from CIBIL score range, this is also important
But do you know that despite your good CIBIL score range, the bank and the loan institution also look at your job profile, business profile and if this also does not match with their policy then they reject any type of your loan’s. Let us understand this in detail.
1. Income Stability.
How much you earn is important for banks but how much you have saved from your income also matters a lot for taking a loan.
2. What banks look and why ?
The bank will ask you about your monthly and yearly income along with whether your monthly income is coming continuously for years or not, source of income like salary, business, rent income.The bank ensures that you have sufficient and regular income to repay the EMI of the loan you are taking. People who have a stable income like employees of a government job or an MNC company find it easy to get a loan but freelancers or businessmen have to provide a solid proof of income.
3. Work History
The bank also looks at what you do and for how long you have been doing it, this also helps in loan approval along with CIBIL score range. are you employed or doing business, which company do you work in, how many years of experience do you have and for how long have you been working currently. Why do banks look into this? Because a stable job shows the ability to pay EMIs, banks and NBFCs feel uncomfortable giving loans to people who change jobs frequently and have unstable businesses.
4. Purpose of loan and use of loan.
Banks and NBFCs also see where you are going to use the loan you are taking. It is possible that you are using the loan for building a house or buying a car or buying a house. If you are taking the loan for any other reason than these, then the chances of your loan getting rejected will increase. So be cautious while taking a loan. Banks give immediate approval for secured loans. Problems increase with unsecured loans. So if your CIBIL score range is also bad, then first apply for a secured loan.
5. Debt to income ratio- DTI
This is a very important factor for loan takers. DTI simply means how much of your income is going towards paying EMI of existing loans like home loan, car loan, personal loan etc. If your DTI is high (40% to 50%) then the bank feels that you are already under the burden of debt and you will delay in repaying the loan, hence your loan may get rejected. Hence, it is very important to have low DTI to get a loan and get fast approval for loan.
No need EMI pay per month,Half of India does not know that salaried persons get special loans.
Impact of transactions from bank account while taking a loan.
If you are taking a loan from the same bank in which you have a savings account or salary account, then it will prove beneficial for you. How old is your account? How much money is there in the account on average? Have you taken a loan from that bank before? Have you repaid the loan on time or has any cheque bounced? A good banking record increases your credibility. The bank looks at your financial behaviour.
We request to you please maintain good banking and Cibil score range for taking loan.
