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Personal loans are loans granted to individuals for personal use, which includes home renovation, rent, holidays, emergency medical bills. Many people opt for personal loans because they are usually not secured by collateral. However, before a personal loan can be granted, there are many factors banks put into consideration. Some of which are stated below:
Employment status
In order for you to be considered for a personal loan, you need to have a steady and stable source of income in a reputable organization. The bank has to be sure that you can pay back the loan at the stipulated time. There are also other benefits associated with your employment status when you want to get a loan. Besides, your employment status goes a long way to determine if you would get a loan or not and how much you can receive.
Work experience
Banks also put into consideration the number of years you’ve been working at your organization. Usually, an applicant who has been working for 5 years and more may be considered before an applicant who has been working for less than 5 years.
Credit history
Another key thing banks put into consideration before granting personal loans is your credit history. If you’ve ever defaulted on a loan or have other bad records, it is most likely for you not to get a personal loan.
Relationship with the bank
Generally, most banks consider customers that are in good standing and have been doing business with them for quite some time. When you build a strong relationship with your bank, in the future if you are looking to take a personal loan you will most likely get it.
Repayment period
Banks usually want you to repay in a few months. Although they offer repayment periods as long as 60 months. So if you are thinking of exhausting the whole 60 months, you may want to rethink again.
According to the Central Bank of Nigeria, to be qualified for personal loans, you must have a bank account with the bank you want to borrow from; you must be credible, psychologically fit with a good credit rating and you must be able to pay back the loan.
Good luck!!
