Not Eligible for personal loan? K2D FinServ App might help you.
Whether it is about a financial emergency or taking loan for buying any asset, a personal loan can help in many ways. It is the quickest way to get usable cash without keeping any valuable asset as collateral in case of unsecured loan. However, personal loan is one of the costliest forms of loan because it is not backed by any asset and banks are at higher risk by giving unsecured loans. If not managed properly, personal loan might do more harm than good. So, as a smart borrower, you need to keep few things in mind before applying for a personal loan. To know more about it please refer article “Things to keep in mind before and after applying for loan”.
Following are the criteria on the basis of loans are disbursed:
- Eligibility Criteria:
Although it varies from bank to bank, the general criteria include your age, occupation, income, capacity to repay the loan and place of residence. To avail a personal loan, you must have a regular income source, whether you are a salaried employee, self-employed business person or a professional.
- Maximum loan duration:
it can 1 to 5 years or 12 to 60 months. Shorter or longer tenure may be allowed on a case to case basis, but it is rare.
- Disbursal of loan amount:
Typically, it gets disbursed in 7 working days of the loan application to the lender. You either receive a cheque or directly in the saving bank’s account.
- How much one can borrow?
It varies based on your source of income whether you are salaried employee or self-employed. Usually, banks restrict the loan amount to 30%-40% of your monthly income.
Any existing loans that are being serviced by the applicant are also considered when calculating the loan amount.
- How do bank decide on the maximum loan amount:
The things banks look is your credit score, current income level as well as liabilities. Your current income level and liabilities( outstanding credit card dues, unpaid loans, current EMIs , etc.) have a direct bearing on your repayment capacity.
- Key documents required when applying for a loan:
Though the documentation requirements vary from one financial institution to another, some key documents you will have to provide with your personal loan application include:
a) Income Proof (salary slip for salaried/ recent acknowledged ITR for self-employed)
b) Address proof documents
c) Identity proof documents
d) Certified copies of degree/license (in case of self-employed individuals)
Reasons because of which lender rejects personal loans:
1) Bad Credit History: If you have made multiple late payments, defaulted on a loan or been in bankruptcy, a lender is unlikely to approve your loan application.
2) Insufficient Income: A lender won’t approve your application if you can’t afford the monthly payments that come with borrowing a loan.
3) Your loan purpose: Lender is more likely to approve for debt consolidation or home improvement than vacation or secondary education. If your loan purpose does not match with a lender’s expectations, you won’t be approved.
4) Missing Information: Lender will verify the details you put in your application. If you have entered something incorrectly, your lender will probably reject your request for funding.
5) Unstable employment: Lenders are very meticulous about the stability of your job. A number of lenders insist that you should have a stable job or at least a regular source of income.
6) Too many loans: If you have a loan or extra debt, you might be rejected. this is because your debt-to-income ratio will be relatively high, indicating you may not be able to pay off your loan.
If in case you are not eligible for personal loan due to any of the above reason, raise your request at K2D FINSERV app for used vehicle loan. At K2D FinServ, we have a channel of various private financiers which will still provide you loan if you fall short in any of the points mentioned above. You will be made available with different amounts and with different rates out of which you can select the best one which suits your demand.
K2D FinServ is the place for all those applicants who have been refused for personal loan by the various financial institutions, as Private Financiers understand that it might be possible that the applicant may not qualify on all the parameters but that does not mean that they can’t repay.