When you apply for a personal loan, you would want the lowest interest rate and an easy approval process. But before you apply, make sure to check if you’re eligible. If you apply right away, it can cause a hard enquiry and lower your credit score. It’s a good idea to use an online eligibility calculator first. This tool lets you see your chances of approval and possible loan terms without hurting your credit score, so you can get ready to apply with more confidence. Read ahead to learn how that works.
Impact of personal loan eligibility on credit score
Checking your personal loan eligibility online helps you in the following ways so that your credit score is protected:
Let’s you know if you qualify
Many applicants are unsure and think the best way to ensure approval is to apply with multiple lenders. This attracts hard enquiries, which affects your credit score. By checking your eligibility, you can apply when you’re really sure. For instance, the Personal Loan eligibility calculator for FIRSTmoney by IDFC FIRST Bank allows you to check eligibility instantly without impacting your credit score. It also helps in avoiding unnecessary hard enquiries.
Promotes conscious borrowing
When you check your eligibility, you know how much you can realistically borrow. This allows you to take stock of your needs clearly and borrow only what you can afford. It is always better to keep your loan amount low to avoid hefty interest rates and easily manage the loan. This ultimately leads to a better score.
Lets you decide on the right tenure
A calculator to help gauge your personal loan eligibility lets you see the eligible loan amount based on the tenure and income. The shorter the tenure, the lower the interest and vice versa. When you decide on the right tenure based on this information, you manage repayments better and protect your credit score.
Reveals gaps in profile
Checking your personal loan eligibility is important as it reveals the areas you need to work on. If your income is low and unstable, you can work on strengthening your profile with additional sources. In the same way, you can boost your credit score for better terms.
Using a personal loan eligibility calculator online
An eligibility calculator for a personal loan is a simple tool that lenders like IDFC FIRST Bank provide for their personal loan offerings to help you plan your application better. You can follow these simple steps to use it:
Enter monthly income
You can enter your monthly salary as a salaried employee. In the case of business, enter the average income every month to get a realistic view of your eligibility.
Set the loan tenure
Choose a loan tenure that works for your monthly budget but also clears the loan early. You don’t want to stretch it too much, as it can affect the loan cost. In case of a FIRSTmoney personal loan, you can choose a tenure between 9 to 60 months as per your convenience.
Get a monthly obligation estimate
Once you enter these details, the calculator will quickly compute the amount you owe each month. This can help you prepare your monthly budget for the repayment.
Find the eligible loan amount
You also get an estimate of the loan amount that you qualify for based on how comfortably you can repay.
Take necessary actions
The eligibility calculator gives you a practical estimate of the loan that is manageable for your profile. You can either use this insight to boost your profile for better terms or lower your borrowing expectations.
FIRSTmoney also allows eligible borrowers to proceed seamlessly from eligibility check to application, offering benefits like:
Quick approvals and disbursal in 30 minutes,
Competitive interest rates starting at 9.99% p.a., and
Multiple on-demand loans with flexible repayment options.
Other tips to protect your credit score
Besides the personal loan eligibility check, you can also protect your credit score through these consistent habits:
Keep EMIs manageable
How you manage your EMIs directly influences your credit score. So, plan repayments with IDFC FIRST Bank’s EMI calculator for better management.
Track credit report
Sometimes, certain transactions are wrongly recorded in the credit report, which negatively impacts your credit score. Regularly tracking this helps you avoid such errors.
Maintain a low credit utilisation ratio
Borrowing less is also a sign of responsible credit behaviour. Thus, keep your credit limited to necessary needs to boost your score.
Final words
Checking your eligibility online is a small step towards a smart personal loan application. It gives you an edge as an applicant since you can boost your profile for better offers. Plus, you can consciously apply to avoid unnecessary credit enquiries. The more responsible you are with your application and loan repayment, the better it is for your credit score.
Disclaimer: This content is part of a marketing initiative.