How can I get a loan?

Bank Loan  Updated date : January 6, 2018 47

Loan is to bridge cash flow gap. If there is an earning stream , subject to investment, loan can fill the gap between available fund and required fund. Normally banks insist on significant contribution by promoter , so that risk is less for the bank. Further there should be surplus generated from the venture , so that the cost of capital is covered by the surplus generated over a period of time. Lenders also look for security, so that in case the obligor defaults bank can cover the loan by sale of the securities lodged. There are different loan ,w.g corporate loan, consumer loan, agriculture loan and sanction process is separate for separate type of loans.

Obtaining a personal loan is based on three criteria:

1. Your credit scores

2. Your historic income

3. A good purpose

Assume this question speaks to a bank loan and not a credit card. I will also assume that this is for a personal loan and not a business loan.

There are many places on the Internet to find out how to obtain credit, what effects credit scores, and how to keep high credit scores (680 +). Suggest you become your own expert on this subject.

Banks want to see that a person has the ability to pay for a loan on a monthly basis. To meet this criteria, the person must show income stability or income growth over a minimum two year period. Why this lengthy period? Because the bank wants to make sure that you have a stable employment history and that this employment history shows excess income to pay for a loan.

What is excess income? Income not needed for your personal expenses. And, the bank will use something called “Debt to Income Ratio” to determine if your income qualifies you for a loan.

Banks use a percentage figure as the criteria for the ratio. In other words, a bank will set a maximum ratio (say 50%) for what all of your expenses need to be as compared to what bills you have to pay and then another ratio which includes the loan payment.

Purpose seems self evident. You have to have a purpose for borrowing the money. And, if this will be your first loan, think in terms of borrowing way lower then your maximum ratio(s) will allow.

The above information is basic to a personal loan. A business loan has its own set of basics as well as specific criteria depending on the purpose of the business loan.


Vote
Result 0 votes
Not Useful Happy Somewhat Useful Useful Very Useful

Apply Loan Loan Calculator Share

Most View Loan

  • Home Loan Interest Rates
    Home Loan Interest Rates
    Bank Loan

    Check Interest Rates 2018, Processing fee ✓ Per lakh EMI ✓ ROI floating Rates ✓ Lowest fixed rates for salaried, Women and Self-employed/Professionals from Nationalized / Government Banks / Private Banks through Deal4loans.Are you looking forward to ...

  • Can I get a loan with very low CIBIL score in India?
    Can I get a loan with very low CIBIL score in India?
    Bank Loan

    A healthy credit score is for sure a prerequisite to be approved for loans. Post the recent economic crash, credit institutions have tightened their credit policies. Any bank or NBFC would lend to you when they are convinced of your repayment capacit...

  • Apply for Consumer Durable Loan in HDFC Bank
    Apply for Consumer Durable Loan in HDFC Bank
    Bank Loan

    Apply for our consumer durable loans to fund your purchase of household electronic goods, from refrigerators to recliners.With up to 100% financing and quick approval of consumer durable loans, enjoy a hassle-free process when you apply for our consu...

  • Apply Tractor Finance, Loan for Tractor in HDFC Bank
    Apply Tractor Finance, Loan for Tractor in HDFC Bank
    Bank Loan

    With simplified documentation, and speedy approval, HDFC Bank offers Tractor Loans, making it easy for farmers and non farmers alike to invest in upgrading their machinery by buying new or pre-owned tractors.✔ Tractor Loans 30 Minutes Approval ✔ 30 M...

  • Apply for Loan for Professionals online HDFC Bank
    Apply for Loan for Professionals online HDFC Bank
    Bank Loan

    Grow your business the easy way with loans for professionals from HDFC Bank.Use funds from your professional loan to expand your business, upgrade equipment and much more. In addition, you don’t require security when you apply for professional loans ...

  • Lease Rental Discounting Loan Bajaj Finserv
    Lease Rental Discounting Loan Bajaj Finserv
    Bank Loan

    If you own a property, you are liable to earn fixed rentals from the same at regular intervals. With Lease Rental Discounting from Bajaj Finserv, you can now get a loan on the discounted value of rentals and the underlying property value.Benefits of ...

Loan Query / Support / Feedback

    Eligibility criteria required for Personal Loan by Rajesh Singh:

    Getting personal loan is very easy if you are meeting all eligibility criteria. Many banks and NBFC are providing personal loans.

    Eligibility criteria required for Personal Loan

    Age Criteria: The younger you are, there is more probability. General guideline followed by most banks for personal loan for salaried employees is they must be between 21 to 60 years aged. However for self-employed it is between 25 to 65 years.
    Employment Stability: This is a very crucial aspect for personal loan consideration. Unless you are salaried and employed for more than 2 years in the current profession or if self-employed minimum 5 years of total tenure of earnings, you will not be considered as eligible.
    Credit Rating: Apart from your company’s performance, individual credit rating holds a lot of value. Having good credit rating increases the probability of getting loan with more flexible option on tenure, amount, EMI and interest rates. In case of any default payment records, huge outstanding loan, fraudulent track records, the banks has every right to cancel the loan or charge higher interest rate. CIBIL score should be above 750.
    Financial Situation: It’s not always about the present, the past financial records will also have a great call on deciding whether you are eligible for a personal loan or not. Having good financial records is the key, will eradicate rating issues and will increase the total amount eligibility. Monthly income should be 50k per month.
    Employer: The employer with whom the applicant is working with is the best way to gauge the credibility of the applicant. Being a part of reputed and high turnover companies is an asset when it comes to applying for personal loan.

    Here is the list of common documents that should be submitted irrespective of which bank you are applying and where you are located.

    Complete loan application form with one passport size photograph.
    Valid Proof of Applicant's Identity: Voter ID card, passport, pan cad, driving license.
    Proof of Residence: Ration card, passport and utility bill.
    Proof of Age: Voter ID card, passport, pan cad, driving license.
    Financial Documents:
    a. Salaried Individuals: Latest 3 months’ Salary Slips and Form 16, bank statements for 6 months
    b. Self Employed Individuals: Latest 1 year bank statement for both savings and current account

    If you are applying for personal loan then compare the interest rates and apply for best bank.