Thursday, 31 May 2018

What is the age criteria for personal loan?


            Loans have made life easy. Once what you had thought you would buy after a few years, you can buy them all now. What an amazing fact it is to get something what you wanted! But the best things do not come free. Loans come with lot of responsibility. You get to use the credit you wanted once, but also comes the responsibility of paying a little extra. That extra is the percentage of interest you have to pay on the actual loan amount borrowed. The total loan amount what is to be paid consists of the addition of both of these factors.

            While the loans are floating in the market, different loans are acquired for different purposes. Suppose you want to take a loan to study, education loan is the option. If you want to start or grow business, business loan is to be taken. To buy a house, Home loan is taken. To take vehicle, auto loan is taken. For your personal needs like travels, wedding, medical emergencies, personal loan is taken. Personal loan is an unsecured type of revolving loan which can have tenure of upto 5 years. It ranges from the overall payback of 6 months upto the maximum limit.

            Now, let us look at the the conditions which would make you an eligible candidate for a personal loan.

Age: 21+
Income: 3,00,000/anum
DBR: 60:40
Tenure: 6months – 5years
Interest rate: Calculated according to CIBIL Report. (mostly between 105% - 28% excluding the processing fees)

The above mentioned criteria are not the standard once but are majorly checked upon or taken an average at! While we look at the criteria one by one, let’s explore them in detail.

            Age of course is take ans 21 years and a person in general cases would start working at that age. And thats when they start earning. While taking any loan, there are also conditions where the banks check your employment and the steadiness of it. Else it will be a risked profile for them. When the first criteria of age is conquered, then comes the income. Now how can this be calculated?
When the loan is given DBR is checked. DBR is Debt-Burden Ratio. DBR is basically the ratio which is calculated by your income. It is taken as if the loan EMI is 40% of what you earn, only then can one go through any loan. So, as the minimum amount to be considered as 50,000 of a loan with the stretch of 6 months. The EMI comes up to 8,333. if 8,333 is the 40% of your total income, the income would be around 21,000. which makes it a package of 2,52,000. No on this, even the Interest rate is calculated which makes it normally around 3,00,000 per anum.

            If you are dependent on family or the family is dependent on you, the DBR varies. And according to that even the eligibility criteria changes. Whatever you read or come across while planning to buy a loan or gathering information, everything changes from individual to individual. So there is no standard. All what you get is an average or multiple researches one has made. One thing is always to be taken care of is the credit score. The score which is derived by your credit repayment behavior.

            Suppose if we talk about ICICI personal loan, the interest rate varies from 11.5% to 22%. the processing fees counted are different from those of other bank. But if your CIBIL report is good, you have made the payments of your previous credits on time your score will definitely be good! A score which is 750+ is considered a good score. It needs no rocket science to understand what a perfect score costs. Be a responsible payer, do not over do and pay on time. Use the credits only which you can pay regularly and not with over burden. Even when few % interest is less, you save a lot of money which would be a help to you and no one else!

            Any article you read, any advice you take which is for any financial needs of credits, all will surround to only one thing. Use responsibly and pay responsibly. Better the credit score, lesser is the interest rate and which is a relief!

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