Major factors that impact your ICICI personal loan eligibility

ICICI personal loan

Icici personal loan, Personal Loan Interest Rates

ICICI personal loan is one of the simplest and quickest loan options to opt for. With zero collateral or security, quick loan disbursement, the documentations involved to avail ICICI personal loan or personal loan through other lenders is far less in comparison to other loan types.

The interest rates for personal loans range between 9 % and 24 % pa. Just like companies consider the work profile of an individual. Financial institutions review the profile of the applicant for determining the eligibility. And personal loan interest rates before approving it.

Listed below are 6 factors that may impact your ICICI personal loan eligibility or personal loan eligibility for other lenders:

Employment profile

Since ICICI personal loans or personal loans available by other lenders are unsecured loans. Therefore the type of employer you are working with is given importance while determining the eligibility for a personal loan. Hence, the public-sector employees and well established private-sector employees are eligible for getting their personal loan approved in comparison to others because there is stability in their income.

Credit Profile

The credit history of the applicant is the next aspect that the lenders like ICICI look upon when evaluating your ICICI personal loan application. Defaults and delays in paying the credit card dues or EMIs of other loans can lower the eligibility for a personal loan. A good credit rating of 750 and above enhances the possibility of attaining the loan at lower personal loan interest rates. A poor credit score may make you pay a high-interest rate on a personal loan.

Note that your credit score is the first parameter reviewed by the lenders to assess your ICICI personal loan application or application for a personal loan with another lender. Those with a score of 750 and above are looked upon as creditworthy and hence hold a higher chance of availing of personal loan application approval.

Also, few lenders provide personal loans at a preferential rate with a good score of over 750. As those with a score of below 750 are generally looked upon as the ones lacking credit discipline. Lenders might either turn down their application for a personal loan or charge higher rates for making up for the involvement of higher credit default risk.

Personal loan 

As the need for a personal loan can come up anytime. Reviewing your score just before making personal loan application submission might not be useful. In place, develop the habit of assessing your credit report at periodic intervals. This will permit you with the required time to take up corrective actions to ameliorate their score.

Adopting healthy credit practices like repaying your credit card dues and loan EMIs by their due dates. Containing the CUR under 30%, regularly monitoring the co-signed or guaranteed loans by you, avoiding various credit card. Loan applications within a short time period etc. will assist you in improving and maintaining your score.

Periodical review can even assist you to recognize the incorrect info or clerical errors. If any present in your credit report and report them to the concerned bureaus and lenders for rectification. A corrected credit report can automatically increase your credit score and boost your eligibility for a personal loan.

FOIR (Fixed Obligation to Income Ratio)

FOIR is a parameter using by lenders or banks to determine the applicant’s loan repayment capacity. It takes into consideration all the fixed obligations that the applicant is currently serving on a monthly basis. Which involves loan instalments, credit card bills etc. The ideal ratio accepted differs from bank to bank and varies in different scenarios.

However, the applicant’s required FOIR for loan eligibility ideally ranges between 50 % and 60 %. Lower FOIR implies a good balance between the income and debt. Indicating higher repayment capacity than the applicant having higher FOIR.

Income and work history

Applicant’s employment stability forms a crucial eligibility criterion. For instance, in case you are a salaried person, you may require to employe for a minimum of 1 year.  with a minimum annual net income of around Rs.1,80,000 pa to avail a personal loan. While a self-employed person must employed for 5 years of total earning tenure with at least 2 years in present profession. Business with a minimum annual business turnover of greater than 25 lakhs. However, these criteria are flexible as it depends on other factors like the type of company you are working with. And housing situation etc.

Age Criteria

Age of the person is one of the essential criteria considering at the time of reviewing ICICI personal loan. Or personal loan offered by other lenders. For most of the PSUs, the eligibility criteria are that – the minimum age of the applicant must be 18 years. He must be a salaried employee, professional, individual with high net worth, family pensioner or regular pensioner drawing regular pension via branch, a retired employee, staff member of the bank.

For private banks like ICICI providing ICICI personal loans, the eligibility criteria are that – the minimum age must be 21 years while the maximum age must be 60 years. He must an employee of a private limited company, an employee from public sector undertakings, including state, central and local bodies.

Relationship with bank

Most of you tend to open a savings account and then a fixed deposit or recurring deposit in the same bank, thereby becoming a loyal customer of the bank. Due to this loyalty, you generally manage to share an impersonal relationship, which likely may fetch a pre-approved offer when the requirement for a personal loan arises. As an existing customer, you would genuinely have some leverage by your side.  As your bank would not pleased to lose you as a customer.

Bottom line

As the lender’s risk appetite and their credit assessment processes can widely vary, your eligibility for a personal loan and the personal loan interest rates charged can widely vary across lenders. Hence, ensure to enquire with numerous lenders as possible about your personal loan eligibility. One of the prudent ways to do so is to approach online financial markets, which would provide you with numerous options on a personal loan based upon your income, credit score, employer’s profile etc.

It would eliminate the adverse impact on your score for making loan enquiries with multiple personal loan lenders. Requests for credit reports made by such online financial markets. While providing numerous personal loan options are considering to be soft enquiries.  Which do not lower your score in any way.

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