1. Age
- Minimum Age: Usually 18 or 21 years, depending on the lender.
- Maximum Age: Often set at 60 to 65 years at the time of loan maturity.
2. Income
- Minimum Income: Lenders require a minimum monthly or annual income to ensure that borrowers have the capacity to repay the loan. This amount can vary based on the borrower’s location (urban vs. rural) and the lender’s policies.
3. Employment Status
- Stable Employment: Applicants should have a stable job, with many lenders requiring a minimum of 1-2 years in employment, particularly at the current job.
4. Credit Score
- Credit Score Requirement: A good credit score (typically 650 and above) is crucial for loan approval. It reflects the borrower’s creditworthiness and history of debt repayment. Higher scores can also help secure lower interest rates.
5. Debt-to-Income Ratio (DTI)
- DTI Limits: This ratio measures how much of your gross monthly income goes towards paying debts. A lower DTI ratio indicates better financial health. Lenders often prefer a DTI ratio under 36%, though this can vary.
6. Nationality or Residency
- Citizenship Requirements: Applicants may need to be citizens or permanent residents of the country where they are applying for a loan.
7. Credit History
- Length of Credit History: A longer credit history can provide lenders with more information on your borrowing and repayment behavior.
8. Additional Criteria
- Bank Account: Borrowers typically need an active bank account for loan disbursement and repayments.
- Documentation: Proof of identity, income, employment, and residence are commonly required during the application process.
9. Special Considerations
- Co-applicant/Guarantor: Some lenders allow or require a co-applicant or guarantor to improve the chances of loan approval, especially if the primary applicant’s credit score or income is borderline.
