Loan Approval Process

Understand how your Credit Score facilitates the loan application process

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Loans have made our life easier, providing us the financial leverage that extends beyond our earnings. Be it Credit Card, Home Loan, Personal Loan or Auto Loan etc. loans are the credit extended to us by lenders on fulfilling certain key parameters. However, getting a loan in India can often be a tedious process for the un-initiated, but not for individuals with a good credit score.

Whenever you apply for a loan, banks check your CIBIL Score and Report to evaluate your credit history and credit worthiness. The higher your score the better are the chances of your loan application getting approved.

79% of loans or credit cards are approved for individuals with a CIBIL Score greater than 750.

WHAT DO BANKS BROADLY CHECK?

  1. 1. CIBIL Score and Report: It is one of the most important factor that affects your loan approval. A good credit score and report is a positive indicator of your credit health.
  2. 2. Employment Status: Apart from a good credit history, lenders also check for your steady income and employment status.
  3. 3. Account Details: Suit filed or written off cases are carefully examined by lenders.
  4. 4. Payment History: Lenders check for any default on payments or amount overdue cases, which might project a negative overview of your overall report.
  5. 5. EMI to Income Ratio: Banks also consider the proportion of your existing loans when compared to your salary at the time of loan application. Your chances of loan approval gets reduced if your total EMI’s exceed your monthly salary by 50%.


Click here to check your loan eligibility.

Apart from your CIBIL Score, loan eligibility criteria differs from lender to lender and across loan types. However, some of the basic requirements in terms of documentation are:

  • Identity Proof: Aadhar Card, Valid Passport, Driving License, Voters ID or PAN Card
  • Address Proof: Aadhar Card, Valid Passport, Driving License, Voters ID or Utility Bills
  • Proof of Employment: Salary slip, Official ID card or letter from company
  • Income Proof: Latest 3 months Bank Statement, salary slip for last 3 months
  • 3 Passport size photographs


Click here to check your CIBIL Score and Report for free and ensure that your credit history is in order so as to avoid rejection from a lender.