A personal loan can be described as an unsecured loan with few to no limits that can be used to satisfy a variety of end-use needs. Compared to other secured loan products, this one has a larger risk component for the lenders because it is not a guaranteed loan. This indicates that a variety of criteria and circumstances are taken into account by banks and other financial organisations before establishing a loan applicant's eligibility. You may determine your loan eligibility based on your income and ability to repay with the Sahaj Loan Personal Loan Eligibility Calculator. This robust AI-powered calculator takes into account a number of variables, including your credit history, income, employment, and other financial obligations, in order to present you with the loan offers that are best suited to your needs.
Formula for Determining Eligibility for Personal Loans
Your eligibility for a personal loan is determined by various lenders and loan providers depending on several variables.
The two most typical techniques for determining a potential borrower's eligibility for a personal loan are listed below:
Method 1: Multiplier Formula
The personal loan eligibility is calculated in this method by using a simple mathematical formula:
Personal Loan Eligibility = (Applicant’s Salary) x (number between 9 and 18)
Every applicant is given a multiplier number by banks and other financial organisations, and these numbers range from 9 to 18. This score represents a rating that takes into account your income, credit history, and place of employment.
Method 2: Fixed Obligation to Income Ratio
Lenders typically employ this technique to evaluate an applicant's capacity for repayment. They subtract it from your monthly income and take into account any past fixed obligations you may have had, such as EMIs. The formula to determine eligibility using this approach is provided below:
FOIR = (Total Existing Obligations/Monthly Salary) x 100
To help you better comprehend this idea, let's look at an example:
If your monthly salary is Rs. 70,000 and you now owe the following debts:
1. Personal loan monthly payments of Rs. 6,000.
2. Car loan monthly payments of Rs. 9,000.
Lenders estimate the applicant's capacity for repayment by assuming that they can only devote 50% of their income to debt repayment. In this case, Rs. 35,000 will be taken into account.
Total Debts = 9000 + 6000 = Rs. 15,000
Disposable income for new loan = 50% of monthly income - total existing liabilities = Rs. 35,000 - Rs. 15,000 = Rs. 20,000 FOIR = (15,000/70,000) * 100 = 21%
Your loan application won't be authorised in such circumstances if the EMI for the new loan exceeds Rs. 20,000 per month, even for the longest term. However, your application would be approved if the new loan EMI is less than Rs. 20,000.
Use of Sahaj Loan Calculator for Personal Loan Eligibility
An instant assessment of your personal loan eligibility is provided by the straightforward and effective AI-powered Sahaj Loan personal loan eligibility calculator. The steps for using this useful web tool are provided below.
1. Choose a location.
2. The applicant's age, please. At the time of loan maturity, the applicant must be at least 21 years old and no older than 65 years.
3. Type in your monthly net income or profit after taxes. Both of these sums must be mentioned after taxes have been deducted.
4. Enter your EMI payments due each month. This sum should include any outstanding credit card debt in addition to all current EMIs.
The personal loan offers that you qualify for can then be seen by you. The loan term and interest rate can be customised to your preferences.
Note: This calculation, which is based on data you provided, is intended to provide you with a general idea of your loan eligibility. Actual loan eligibility is determined by a number of additional factors, including geography, income, age, and credit history.
Using the Sahaj Loan Personal Loan Eligibility Calculator Benefits
The advantages of using the Sahaj Loan personal loan eligibility calculator are listed below:
Regarding Salary Applicant
Knowing your loan eligibility is usually a good idea if you're a salaried person seeking to apply for a personal loan. The total amount of the loan, the length of the loan, and the interest rates are a few variables that determine the total cost of the loan. The first step in guaranteeing a hassle-free lending experience is knowing your precise loan eligibility. The following examples show how using this loan eligibility checker may be very helpful to you:
1. Based on your capacity to make monthly payments, this sophisticated AI-powered calculator calculates your loan eligibility. The amount is calculated by deducting your monthly obligation from your income.
2. To ensure there is no additional repayment stress, the entire loan amount is estimated based on your income after taking into account your monthly obligations, interest rate, loan tenure, location, and age.
Applicants who are self-employed
You may quickly and easily determine your loan eligibility with the Sahaj Loan Eligibility Calculator. This dynamic calculator takes several things into account to provide you with accurate findings and loan offers. The calculator has a number of characteristics that contribute to its value, some of which are listed below:
1. This calculator determines your ideal loan amount by calculating your eligibility after subtracting any existing EMIs from your monthly income. It also takes location, interest rate, date of birth, and duration into account.
2. You may apply for the predetermined loan amount or even a smaller loan amount.
What Affects Your Eligibility for a Personal Loan?
While various lenders may use different criteria to determine your loan eligibility, there are a few important elements that all lenders take into account. We'll look at a few of the elements that determine your eligibility for a personal loan in this section:
. Credit Score: Any credit score over 750 is regarded as a reliable indicator of a borrower's capacity for repayment. Less than 750 applicants may still be authorised for loans, but they may face higher interest rates. The greater your chances are of having a loan authorised on your selected terms, the closer your credit score is to 900.
. Employer Reputation and Employment Type: Loans are easily approved for paid workers in the public sector, private sector, or multinational corporations by banks and other loan providers. Self-employed professions including architects, physicians, businesspeople, and doctors are also eligible for personal loans. People who have a good job history and are employed by respected companies typically have no trouble getting loans on the terms they want.
. Applicant’s Age: Although the majority of financial institutions and lenders view 65 as the maximum age to sanction a loan. Applicants between the ages of 21 and 60 are more likely to be granted personal loans. Pension loans are frequently authorised for retirees with terms that differ from those of standard personal loans.
. Monthly Income: Most banks grant personal loans to salaried workers who earn at least Rs.15,000 a month. However, the majority of lenders readily grant loans to applicants who make at least Rs. 25,000 each month. Self-employed individuals must earn at least Rs. 5 lakhs in annual salary.
. Work Experience: Most lenders and financial institutions demand that applicants have a minimum of 6 months of work experience in the current organisation and a minimum of 2 years of overall job experience. Self-employed candidates must have been operating their present firm for at least two years in order to qualify for a personal loan.
