An engineer loan, as the name suggests, is a short-term unsecured loan specifically customised for engineers. Leading financial institutions provide two types of loans under this category:
Personal loans – Ideal for expenses like weddings, home improvement, medical emergencies, exotic vacations, higher education, etc.
Business loans – Ideal for business-related expenses like purchasing new equipment, upgrading machinery, increasing working capital, etc.
NBFCs have a less-complicated process that reduces the hassle involved in availing these personal finance for engineers. The straightforward procedure also enables you to avail the funds in your account within 24 hours.
Meeting the eligibility criteria is necessary to ensure your loan application is approved. Few of the ways you can increase your chances of availing an engineer’s loan
Improve your credit score
Your credit score is the first thing lenders check when you apply for a loan. A CIBIL score of 750 or more is one of the factors to qualify for a loan for engineers.
If you have a low credit score, you must concentrate on improving it if you are planning to apply for an engineer loan.
Availing a credit card is one of the fastest ways to do so. Manage the credit card responsibly, always paying the total outstanding instead of the minimum amount due within time and utilising not more than 40% of your credit limit to increase your CIBIL score.
Note that some credit card companies may also need a high credit score to sanction a product. In such cases, you can opt for a secured credit card approved against a fixed deposit.
Provide all the necessary documents
An engineering degree certificate is a mandatory requirement to apply for these unsecured loans.
Additional documents that you have to provide to apply for an engineer loan:
- KYC documents (Passport, Driving Licence, Voter ID, Aadhaar, PAN, etc.).
- Salary slips of the previous 3 months.
- Bank account statement of the last 3 months.
Increase your occupational experience
You need to have a minimum experience of 3 years either as a salaried or as a self-employed to apply for an engineer loan.
Having a more profound occupational experience improves your chances of availing a loan for engineers.
Lower your debt-to-income ratio
The debt-to-income ratio or Fixed Obligation to Income Ratio is the comparison between your fixed monthly obligations and income. It is a parameter that some NBFCs check as part of determining your eligibility.
They will give more preference if your debt-to-income ratio is 50% or lower. A low ratio enables you to pay the EMIs with ease even after taking care of your monthly expenses.
Foreclosing your existing loans is an ideal way to reduce your FOIR and increase your chances of availing an engineer loan with the most beneficial terms and features.
Apply for the right loan amount
You can avail up to Rs. 30 Lakh with an engineer’s loan. However, the loan amount you avail depends on your income and other factors. Applying for an amount that the lender considers too high will result in a rejection.
Hence, take help of a loan eligibility calculator. This online tool tells you the loan amount you are eligible for by evaluating your income, fixed monthly expenses, etc.
Abiding by these 5 points mentioned above increases your chances of availing a loan. Also, do make sure that you know all about engineer loan before you apply.