A loan is a great way to fulfill any financial requirements or assist in financial expenditures. In addition to this, you can opt for loans that will suit your need to perfection, for example, a car loan to purchase a car, or a business loan to finance one’s business. However, as a part of the loan application process, you will need to satisfy certain loan criteria. These criteria may differ from the type of loan you may need to apply for. While you can always use the loan calculator to check your loan eligibility and avoid the possibility of loan rejections, here are some factors you can consider when applying for the loan.
• Joint loan with your sister or friends:
As a part of the loan application process, another individual may apply for a joint application. However, certain banks have restrictions when it comes to fulfilling the criteria for the joint loan application. For one, there is a restriction when it comes to sisters applying for a co – applicant. Alternatively, banks do not provide a co – applicant status to friends of the applicant. However, you can choose to opt for a loan with your parents as co – applicants.
• Your loan application has been rejected before
It is not a wise move to keep applying for a loan impulsively and without proper rationalization. If your loan application gets rejected, it will be recorded in your CIBIL record. Therefore, you must weigh the pros and cons before applying for loans anywhere. With every loan application you make, wait for a feedback or an offer before applying for a loan in a different institute. This will give you a chance to rectify any error or even update your credit score before you apply for you next loan application
• You are a compulsive job hopper:
Banks place a lot of importance on job stability when it comes to applying for a loan. Certain banks even insist that an applicant should be employed with their workplace for a certain tenure before they are eligible for any loan. However, this tenure can change depending on the institute and loan type you are applying for. Additionally, if your company’s future indicates that it is not financially stable, the bank you are applying for a loan, has a right to reject your applicant.
• You had to pay when you were a loan guarantor
When you stand as a loan guarantor for other loan applicants, you have to stand responsible in the event that the individual does not repay the borrowed funds. When this occurs, you will be responsible enough to repay back the funds. This in turn, will affect your CIBIL score, and consequently your future loan applications.