Monday, January 20, 2014

What factors determine your loan approval or rejection?



We often don't feel that in spite of not taking any loan before, our loan application will be rejected and unfortunately, we don't even understand the reason for it.

                 Your Loan approvals or rejections at first depends on what type of loan do you want to take? If you are planning to take an unsecured loan such as Personal Loan, you can get a loan easily as it does not require any guarantor and the interest rates are also greater, so you should avail it without any problems. If you are planning to take a secured loan with low interest rates, such as Mortgage Loan/ Loan against Property, a thorough background check is required regarding your Profit and Loss account and your personal account stability, which determines you are eligible to take the loan.




             Also, there are many other factors that determine the loan approvals, and the time taken to disbursal of your loans. You are judged by the ability to repay these loans on various factors and some of these factors includes, your present age at the time of loan application, your present income, the job stability i.e. Are you planning to change the organization you are working, your CIBIL score(which is determined by your financial account stability), how much monthly installment you can pay that is agreeable to the finance funders, the time duration for which you take the loan, the most suitable type of loan for your purpose that means there’s no point to taking a car loan if you are not planning to take a car!

        Ensuring you have a high credit score can obviously get you a higher probability of getting a loan easily, but a high credit score completely depends on your history of personal accounts, such as late payments on credit cards. Also, if you have an existing loan, you should pay all your mortgage Emi’s in time, which will ensure you are eligible for a good credit score and thus, for another personal loan or mortgage loan.

      



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