Applying for a loan can be a very unnerving and anxious process. You fill in lengthy forms, collect and submit various documents to multiple banks and then find yourself waiting with bated breath for loan approval while your plans for that dream home, your first car or your child’s education are kept waiting.
The good news is your loan approval is not always dependent on complex algorithms. You can assess the probability of getting a loan approval using 2 simple criteria. They are:
1. Your Credit Score
The first thing you should do is purchase your Credit Score (including the Credit Information Report) from a Credit Bureau. Usually, a Credit Score of 750 or more puts you in contention for a loan approval but does not guarantee it. Of course, if your score is below 750, all is not lost. There are financial institutions who will lend to individuals with a low score.
DETERMINING YOUR CREDIT ELIGIBILITY
2. Your Credit Eligibility
Your credit eligibility is the second criteria reviewed by a lender. Your credit eligibility is determined using your CIR and your bank statements as follows:
Review for payment irregularities : As a first step, lenders will review your CIR for abnormalities in your payment patterns. Missed payments, overdue amounts and settled accounts in the recent past indicate financial duress and are likely to result in a loan rejection.
If you see any of these conditions on your CIR, it would be better to pay all your dues consistently for 12 months before applying for a loan. If you feel that a lender mayhave reported your data incorrectly to us. Approach us to help you get this corrected.If your CIR is clear, you should move on to Step 2.
As you can see, you have all the tools required to figure out your credit eligibility. So, before you apply for a loan, ensure that you make these simple calculations to not only save yourself the embarrassment of being rejected but also to put yourself in a better position to bargain for a better deal.
Check your loan eligibility by clicking here.