Taking a personal loan for one’s urgent or non-urgent needs has become commonplace among the younger, upwardly mobile crowd. There are times when one wishes to make an expensive purchase without swiping their debit or credit card. At other times, there are emergencies such as funding a medical procedure or paying your child’s semester fees. Personal loans can also pay for major milestones such as one’s wedding, or a foreign holiday, or even closing older loans.
As a first time applicant, you will come across several technical terms when researching the short term loan. One of the most significant ones is the ‘loan eligibility’. Let’s study it in some detail in the following sections.
What is loan eligibility?
Simply put, the ‘loan eligibility’ is the sum of money that is approved against your financial and personal credentials, by a lending institution. It is computed on the basis of your age, annual income, city of residence, credit score, repayment history, etc. Every loan applicant has a different loan eligibility, but it is broadly the same across most lending institutions. Lenders check the eligibility along with credit score when approving or rejecting loan requests.
Why does it matter?
The loan eligibility is the most important factor to take into account when applying for a loan, whether a secured or unsecured one. As mentioned above, it is a number or amount of money that is approved against your name based on various factors. You cannot get more loan money sanctioned over and above what you are eligible to get. For instance, if your personal loan eligibility is Rs 3 lakh, you cannot apply for and get Rs 5 lakh loan. However, you have the liberty to borrow a lower amount of money than the sum you are eligible for. The eligibility amount is the upper limit for your borrowing from the lending institution.
How does one check it?
The personal loan eligibility is not a magic number that only the lending institution is privy to. You can find out your eligibility by using a loan eligibility calculator. This calculator is available for free use on loan aggregator sites. You can use the loan eligibility calculator on the instant personal loan app on your smartphone as well.
The calculator asks you to input some basic information such as income, age and other basics. Based on the information provided, you can find out your loan eligibility. But do note that the online calculator shows the closest approximation to the actual amount of money that can be sanctioned – do allow for a minor upper or lower deflection. For the most accurate amount, it is best to contact the lender and ask them for a final eligibility computation.
How to get a short-term loan from an app
Now that you are more cognisant with the concept of loan eligibility, it’s time to check it and apply for a quick loan from the instant personal loan app.
- Download the preferred loan app on your smartphone. You can find it on the Google Play Store (for Android users) or App Store (for iPhone users). Set it up as directed by keying in your financial and personal information as asked.
- The app now analyses the data you inputted in the previous step and checks your credit score. It lets you know your personal loan eligibility based on this information.
- Meanwhile, you can study the various aspects of the loan in detail. Reputed loan apps in India offer up to Rs 5 lakh short term loans, with minimal paperwork and quick approval processes. Before proceeding, understand your eligibility, interest rate being offered, penalties and processing fee schedule, list of documents required, and the terms of repayment.
- Self-attest copies of your documents and have them picked up from your residence.
- Once credit scores, eligibility and documents are thoroughly vetted, the app approves the personal loan request. Prior to approval, you are informed about the monthly EMI amount, processing fees to be paid and other particulars.
- Repay the loan amount from your salary or business income in a series of monthly instalments.
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