5 Major Factors That Can Influence Loan Approval for Engineers |
Posted: December 14, 2018 |
An engineer loan is a professional loan geared for engineers that help them meet diverse needs. This loan is available for salaried as well as self-employed engineers. While it’s easy to apply for this loan, here are five major factors that can influence its approval. Credit scoreThe first parameter evaluated by lenders to gauge creditworthiness, credit score plays an essential role in the engineer loan approval process. It’s a three-digit number, from 300-900, that reflects an individual’s money-management skills, serving past debt. The higher the score, the better are the chances of quick approval. Generally, a score above 750 is considered a good one by lenders. Timely payment of bills, outstanding credit card dues (if any) and EMIs of loans taken helps to consolidate this score. Before applying for a loan, engineers must check this score. It can be easily checked for free from various third-party websites or from credit information companies (CICs) in India. However, in case of CICs, the score can be checked for free only once a year. A healthy credit score helps you qualify for a bigger loan amount. Both these collateral-free loans come with Flexi Loan facility that allows withdrawal from the approved limit as and when required, with interest being charged only on the amount utilised, thereby keeping EMIs low. Current financial commitmentsWhile a credit score reflects prudence with serving past debts, it doesn’t say anything regarding the ability to serve a new one. Loan underwriters while evaluating an application closely look at one’s current financial commitments to analyse whether they can serve a new debt or not. In case, a major chunk of your income/cash flow goes in paying high EMIs on big-ticket loans, question marks are raised on your ability to take a fresh debt. Therefore, it’s essential to keep current financial commitments low for quick approval of the loan amount. IncomePrior to availing this professional loan, engineers must match the minimum income criteria set by loan providers. Today, this information is readily available on the lender’s website. Generally, most lenders are reluctant to lend and approve a loan below the income specified. And if they do, it comes with strict terms and conditions and at a higher rate of interest. Also, for self-employed engineers, business vintage matters. A high vintage expedites the loan application process and vice versa. Proper documentsDocumentation plays a critical role in the loan application process. Attaching/uploading the right documents with the loan application form quickens the borrowing exercise. Though the list of documents varies across lenders, the most common ones asked for are:
Engineers may also be asked about their engineering degree certificate. The list is readily available on a lender’s website. The number of lenders approached in a short noticeThough digital disruption has made it easy to avail this professional loan, approaching too many lenders in a short span of time or simultaneously can backfire. Such a move paints one as a credit hungry borrower and delays the approval process. With advanced analytics and algorithms in place, it’s very easy for lenders to track multiple applications. Hence, it’s essential to approach one lender at a time and in case of a rejection wait for some time before making a fresh application. Keeping the above factors in mind will not only boost chances of loan approval but will also help getting it at a competitive interest rate.
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