A few people might wonder about the how does a lender decide the eligibility of a person, whether he can borrow or not and how much, these things are like puzzles for a majority of the people. Along with the lenders it is also very important for the borrowers to know about their loan eligibility.
The few things that the lenders are most concerned about is the credit report and the total fund inflow and the age of the applicant; with these factors they estimate the amount of loan that they can lend to him or actually whether they should lend loan to him or not.
To decide the loan eligibility of the applicant the lenders deduct his monthly expenses and then from the remaining amount it considers 40-50% that the lender can use to repay his loan and then on the basis of the years remaining before his retirement they decide the upper limit for the loan.
After that it is the credit history that is taken into consideration, a high credit score is evident if the credit-worthiness of the applicant and hence the lender can be bit optimistic about repayment of his lend amount in time by the borrower. If the credit score is not that good then it could also affect the chances for a borrower to receive the loan.
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