Knowing the factors which would increase your chances of getting approved gives you an upper hand on CA loan application. You can work specifically on those factors and boost your chances of getting approved. So, what are the factors a lender would check in your loan application? Below is the answer.
Financial state of the person: First of all a lender would send request to your local banks to find out your financial state i.e. how much savings do you have and your monthly financial history. This gives the lenders an idea of how much you earn and how much you spend every month.
Debt burden or FOIR: Secondly, they would check your debt burden ratio which also stands for Fixed Income to Obligation Ratio - the ratio of what you earn to what you pay as EMI against your existing loans. This is basically done to find out how much you can pay as EMI for your next loan. Also, if the ratio of your obligations to your income is more than 43%, consider your loan application to get rejected.
Liabilities: Liabilities here refers to financial obligations apart from your EMIs that you shoulder on such as your kid’s education (if you’re married and have a kid), your living expenses etc.
Repayment history and credit score: Lastly, they will check the repayment history associated with your existing loans. This would give them an idea about your repayment capacity and your financial habit.