Cosmos Bank Personal Loan Eligibility

The following are the eligibility criteria for Cosmos Bank Personal Loan:

• Salaried individuals, self-employed individuals/professionals, and businessmen are eligible for the loan.
• Salaried individuals employed with State/Central Government Organizations, PSUs, Companies of repute, MNCs, and Reputed educational institutions are eligible for the loan.
• A minimum of 2 years of overall work experience with a minimum of 1 year of work experience in the current organization is required for salaried individuals.
• A business vintage of at least 2 years in the present line of activity is required for the self-employed.
• A satisfactory credit score, preferably over 700 is required.

The following are the factors affecting the eligibility of Cosmos Bank Personal Loans:

Income: The net income of the borrower i.e., the income after statutory deductions and regular expenses incurred for sustenance like rent, utility bills, food bills, etc., and EMI payable for existing loans, if any from the gross income is very crucial for the assessment of eligibility of a personal loan. This gives an idea to the lender about the affordability of the borrower towards the proposed EMI. There is a stipulation of the percentage of net income to gross income after providing for the proposed EMI, which has to be met to be eligible for the loan. Normally it ranges between 30% to 50% depending on the lender.

Age: Unlike other loans like home loans where the repayment period is for over 20 years, the age of the borrower does not affect the eligibility to such a great extent since the repayment period does not go beyond seven years. However, a regular income with a minimum work experience of 1 year in the current employment is very essential. Even here, if the borrower is approaching retirement age, the eligibility will come down since the EMI will be higher. So, the younger the borrower, the lower the EMI, and the higher will be the eligibility.

Nature of employment: Both salaried individuals and the self-employed are eligible for Cosmos Bank Personal Loan. A regular source of income is very essential to get an approval of the loan. The institution you are working with is equally important. Salaried individuals employed with Government Organizations, Reputed Companies, MNCs, and Reputed Educational Institutions are viewed as borrowers who are more reliable and are more likely to get approval for the loan. A work experience of at least 1 year with the current employer. To convince about the stability of income, the self-employed should have an established business that is profit-making and should have existed at least for a period of 2 years.

Debt to Income Ratio: This ratio is very crucial in assessing personal loan eligibility. The required ratio ranges from 30% to 50% depending on the lender. This ratio is calculated based on the existing commitments that have to be provided for from the monthly income. The commitments include mandatory expenses like rent, utility bills, existing EMIs, etc. The lender arrives at the residual amount to gauge if the proposed EMI can be provided for while maintaining the debt-to-income ratio stipulated.

Credit Score: Credit Score is a mirror of your financial discipline. The credit history has details of the number of loans availed, the type of loans availed, and discipline in repaying the loans on the due date. All these factors are important to assess the responsibility of the borrower towards monetary commitments. The higher the score, the higher will be the eligibility and chances of getting the loan approval. Applicants with higher credit scores have the advantage of higher loan limit along with concessions in the rate of interest and other charges. They are considered as low-risk borrowers and are in great demand as borrowers in the banking scenario.

Relationship with the bank: It is easier to get a loan if you have a long-standing relationship with the Bank with a good track record. Your past transactions with the bank will prove your credibility which is a great advantage to improve chances of approval of the loan.

You can improve the eligibility for Cosmos Bank Personal Loan by following a few tips.

Improve your credit score: Credit Score is a very crucial factor while assessing the eligibility of a personal loan and to get the approval for a personal loan. Certain aspects impact your credit score and if you take care of these aspects you can improve your credit score.

First and foremost check your credit score. If the score is below the satisfactory level then you should work towards improving the same. Here are a few things you have to follow to improve the score.

• Make the payments of EMIs regularly well before the due date. Nowadays, with the provision to link the EMI payments to your credit cards, the payment automatically can be done on the due dates. This will avoid missing out on EMIs if you have several loans and you cannot remember the due dates of all of them.
• Clear all the short-term loans and credit card dues before approaching the bank for a personal loan.
• The foreclosure also should be done on a selective basis since foreclosure of all the loans can impact the credit score negatively. Closing long-term loans is not a good idea. If your credit history shows long-term loans being repaid regularly, your credit score will improve.
• Check your eligibility before applying for any loan. Rejections of loan applications can harm your credit score.
• Manage the usage of the credit card limit between 30% to 40%. Usage of the credit card limit to the maximum level is an indicator of your financial crunch and the banks infer that you are depending on credit for your expenses which is not viewed favourably.
• Do not resort to making the minimum payment due towards the credit card. Always clear the entire dues as indicated in the credit card statement. This will not only help you to take advantage of the interest-free period but also will improve your credit score.

Provide details of other income sources: Income is the main factor deciding the eligibility of the personal loan. The higher the income, the higher will be the eligibility. If the residual income after providing for the mandatory expenses is higher the repayment capacity will be gauged as being higher and the eligibility will also be higher. You can provide the details of other income sources like interest on fixed deposits, rental income, dividends on shares, etc., to improve the income factor. The bank will be convinced that you will be able to make the payment of the EMIs regularly and will ensure of the recovery of the loan.

The following are the documents required for Cosmos Bank Personal Loan and have to be submitted along with the relevant application form and 2 passport-size photographs.