Important Factors that Affect Your Engineer Loan Approval


Whenever you apply for a loan, your application goes through a stringent screening process before getting approved. Financial institutions follow a strict set of rules to decide whether the borrower is creditworthy or not.

These are especially apparent when you apply for an unsecured professional loan like Loan for Engineers.

An engineer loan can be used in many ways. The top 3 ways to utilise an engineer loan can be to increase the working capital, pay for new machinery, or use it to fund various personal purpose like marriage, vacation, home renovation or higher education costs.

However, you have to keep in mind the eligibility factors that affect the chances of approval so that your application does not get rejected. Rejections will ultimately hamper an individual’s CIBIL score.

Although the eligibility criteria varies between financial institutions, the primary eligibility criteria that lenders look for are –

If you are a salaried individual –

  • Your work experience and job stability.
  • Engineering degree and relevance of your education with your work.
  • Your repayment potential according to your monthly income.
  • Financial habits including your savings.
  • Your credit rating and credit history.
  • Any monthly obligations like whether you are paying any EMI or not etc.

If you are a self-employed or consultant engineer –

  • Your business tenure.
  • Industry development, margin, future project reach and scope, etc.
  • Economic stance.
  • Business turnover.
  • CRISIL rating.
  • Your CIBIL score.
  • History in the chosen line of business and profitability to determine repayment potential.

All these factors come into play when you apply for a professional Loan for Engineers. Various financial institutions will assign different weightage to each one of these conditions. Follow this simple checklist to apply for an engineer loan and get your loan approved in a jiffy–

  • Credit score – Financial institutions will always prefer an applicant with a good CIBIL score. It is a 3 digit score to assess the credible risk of repayment of the due amount. It ranges from 300 to 900, and anything above 750 is considered a good credit score.

A good credit score will help you get a quick approval. According to TransUnion CIBIL, someone with a credit score of 750 or more has a 79% approval rate with the very first application in India. You will also get the opportunity to negotiate your engineer loan interest rate with a decent score.

  • Financial responsibility – A lender will also take into account your income consistency. This, along with other factors like credit history and overall financial track records prove whether the borrower is responsible with his/her financial obligations or not.

If you are a salaried individual, your employment record and company profile will play a crucial role. In case of a business, the profitability and the annual turnover will be vital.

The lender will also check if your FOIR is below 50% or not. It is another important criterion that affects the approval of an engineer loan.

  • Repayment ability – Another important factor that is considered when you apply for a  loan for engineers is your repayment ability. A financial institution conducts a detailed analysis of your fixed and variable income before approving the loan request.

Your financial history plays an important role in determining your repayment ability. It will also play a role in determining your engineer loan interest rate.

All these factors play an important role in the approval of your loan application.


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