When you apply for a loan, lenders judge your capability to repay the loan. This evaluation is based upon your age, income, job profile, and Credit Profile. The Credit Profile is the reflection of your creditworthiness. You need to understand how a good Credit Profile affects your profile and will help you to obtain a loan without much hassle.
1. Age is crucial: Usually, a loan like the home loan is offered for a maximum period of around 20-25 years. However, whether you can avail a maximum loan tenure or not, is dependent on the age at which you apply for a loan. Age plays a crucial role in your available loan tenure especially when you are close to retirement.
2. Gender: Earlier banks were reluctant to offer loans to a single woman because of the credit profile. The major reason was the fear of loss of income after marriage. Nowadays, this perception has been changed, as women continue to work even after marriage. Therefore, gender plays less role in the approval of the loan. There are some cases when banks ask for a guarantor in case of an individual woman applicant.
3. Previous repayment record: It is another critical reason for the processing of your loan application. In case you have a bad repayment record with missing EMI’s, then you may hardly get a loan or may end up with a high rate of interest because of your credit profile.
4. Place of employment and job stability: The job stability is the major factor that a bank looks upon while offering a Loan. Moreover, banks offer loans to a person who is employed with a particular concern for over one to four years.
The following are some points that can help you prepare for your loan:
- Make sure that your backup funds are enough to pay your EMI for a bunch of months, for emergencies like a job loss, etc.
- Pay high down payment and prepare well ahead to close the loan quickly.
- Analyze your capability to afford the loan.
- Keep a record of your credit score and review it periodically.
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Special Note: An individual must examine the whole EMI amount payable to the lender with the Personal loan EMI calculator.