Before applying for a personal loan, it’s essential to understand
how banks determine the loan amount and the role of your
CIBIL score in approval.
1. How Banks Calculate Your Loan Eligibility
·
Income-based calculation: Banks generally approve personal loans
up to 20 times your monthly income.o Example: If your monthly salary is ₹50,000, your eligible loan amount could be
₹10 lakh.·
Other factors include age, employment stability, and existing financial obligations.Higher income usually means
higher loan eligibility, but your credit history also matters.
2. The Importance of Your CIBIL Score
·
CIBIL score is a three-digit number (300–900) that represents your
creditworthiness.· A
higher score increases your chances of loan approval and may also get you
lower interest rates.· Scores are interpreted roughly as follows:o 750–900 → Excellento 700–749 → Goodo 650–699 → Fairo Below 650 → Poor
3. How to Check Your CIBIL Score
Method 1: Official CIBIL Website
1. Visit
www.cibil.com2. Register with your
personal details3. Verify via
OTP and get your credit report
Method 2: bank or Financial Apps
· Many banks and fintech apps provide
free monthly CIBIL score updates.
Method 3: Credit Card Statements or Loan Portals
· Some lenders provide
instant score checks when you apply for loans online.
4. Tips to Improve Your Loan Eligibility
·
Pay all previous loans and credit card dues on time·
Keep your CIBIL score above 750· Avoid applying for multiple loans in a short period· Maintain a healthy
credit utilization ratio5. Conclusion
Your
CIBIL score and
monthly income are the two most important factors that determine
how much loan you can get.Checking your CIBIL score before applying helps you
plan better and
avoid unnecessary rejections.
Disclaimer:The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.