Applying for a bank loan? Here is how you can ensure success

While buying a two-wheeler, four wheeler or a home, people prefer to avail bank loans instead of spending their savings.

From middle class to upper class, taking loans from banks is a common practice these days. While buying a two-wheeler, four wheeler or a home, people prefer to avail bank loans instead of spending their savings. However, while applying for such loans, the borrower needs to take care of some important factors and if this is done, then success is virtually guaranteed.

Speaking on the important factors that play an important role in loan approval, SEBI registered tax and investment expert, Jitendra Solanki said, “Some of the factors like eligibility, job stability, cibil score, banking history and one’s age at the time of bank loan apply are some important parameters that play an important role in approval or rejection of a loan application.”

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Asked about the top 5 factors that will help loan applicant to avoid rejection of one’s application Solanki listed out the following:

1] Eligibility: Whether you are eligible to avail of bank loan or not, is one of the most important factors that can be checked before applying for the bank loan. To know one’s eligibility, most of the banks have mentioned the eligibility criteria for approval of the particular bank loan. One can go to the website of the bank (from which they are planning to avail of loan) and check one’s loan eligibility.

2] Job stability: While approving a loan, a bank checks the job profile of the loan applicant. They check for how long the employee has been working with the current organisation and prior to that where he or she worked and for how much time. They do this to check loan borrower’s job stability only.

3] Cibil Score: A bank also checks the cibil score of the loan applicant. Generally a Cibil Score of 750 or above is considered better and leads to approval of bank loans. These days various sites, which are available in single google search, are giving cibil score online without any charges. So, it’s better to check one’s cibil score before applying for a bank loan.

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4] Age of the applicant: Age of the loan applicant is important if the application is for the home loan. Generally, banks prefer people around 35 years of age for the home loan as the borrower will have more time to repay the home loan as has around 25 more years to earn.

5] Income of loan applicant: Apart from this, the bank also looks at the annual income or monthly income of the loan applicant. It helps them realise how much loan has to be approved to the applicant. Generally, banks prefer to approve loans to the tune where the maximum monthly EMI gets fixed at around 40 per cent of one’s monthly income. If the applicant has already taken some loan, then its EMI gets added while approval of the loan he or she has applied for.