Individuals new to the world of borrowing often find themselves stumbling across various personal loan aspects. Among all the borrowing information they essentially need, the amount they should borrow baffles the most. Even though these cash loans are readily available and come with simple eligibility requirements, financial prudence requires one to borrow affordably. This conveys that one must borrow only as much as is suitably accommodated in their monthly income. A crucial aspect of ascertaining this amount is also that it must not burden one’s finances now exhaust the total financing capacity available. Calculating the right loan amount thus aspects various factors that need consideration.
An individual in their beginning stage of borrowing also needs to consider other essential factors to help make an informed loan decision. Below given are the two crucial aspects related to the instant personal loan amount one needs to calculate before applying for the advance.
The eligibility for the maximum personal loan amount varies from one borrower to another. The amount that one can borrow is affected by various eligibility factors related to their financial profile. For instance, the lender would consider the following aspects when checking the cash loan amount eligibility for a borrower, which is applicable for beginner borrowers too.
Monthly income: An individual with a high income can easily afford a high loan value and make timely repayment in EMIs.
Age: A borrowers must be within the specified age range of 22 to 58 years to avail an instant personal loan. Those near the minimum age requirement stand a better chance of receiving a high loan value than those towards the maximum end.
Remaining years of service: The years of service remaining in the borrower’s career also define their extent of borrowing.
Existing liabilities: If your financial profile is loaded with repayment liabilities and little scope remains for accommodating a new one, the chances of high loan eligibility reduce.
City of residence: Your city of residence also impacts the total financing value you can avail irrespective of whether you are a beginner or a repeat borrower.
However, credit score remains a matter of consideration for beginner borrowers as they are likely to not have any score when availing a cash loan for the first time. In such cases, they can apply for the advance with platforms like dedicated loan apps as they do not mandate holding a credit score. Also, they provide financing up to Rs.1.5 Lakh with ease against simple requirements.
Before applying, use a personal loan eligibility calculator to check how much you should avail to get easy approval. The above-mentioned factors are most likely considered for loan amount eligibility computation. For beginners, it can be a great tool to start with and check the maximum loan availability for their financial profile.
Overall affordability check is another crucial cash loan amount calculation a beginner borrower must undertake. This typically involves considering if the loan amount selected renders a suitable total and monthly loan liability for repayment or not based on their income. The best way to go through this calculation would be with the use of an easy personal loan EMI calculator.
The calculating tool allows you to compute the following crucial repayment values based on your borrowing choices.
The total loan liability payable by the tenure’s end
The EMIs payable every month until tenure completion
The total interest accumulating for the loan tenure based
You can arrive at these results by entering a suitable loan amount, a tenure for repayment, and the applicable interest rate on the loan.
Once you have made these entries and checked the loan repayment values, you can adjust the loan amount and tenure entries to change the liability as per your affordability. It is crucial to choose a loan amount that keeps your repayment liability affordable. This should help with timely loan repayment, thus assisting in convenient loan management over the tenure.
Apart from the above calculations that a beginner instant personal loan borrower must make, following are some important considerations as well.
The overall affordability of your loan largely depends on the applicable interest rate. Research the market to find a lender that levies the lowest rates possible.
Your choice of interest rate system, i.e., fixed vs. Floating rate levy, also determine the overall affordability. Make sure to choose between the two based on the current interest rate trends in the market.
Your choice of repayment tenure matters critically as it impacts multiple aspects. For instance, it will affect the interest rate levy, the total interest accumulation, the total time involved in servicing the loan, etc. So, consider all these aspects and choose the tenure accordingly.
When applying for your cash loan, also make sure to check if you meet all eligibility requirements your lender has specified. Check document availability and keep all documents handy before sending your loan application. Choose to apply with a reputed personal loan app to experience fast loan processing with quick approval and disbursal.