Salary composition

A lot depends on the salary structure also. Companies paying higher perks than in-hand salary are good from income tax perspective but not from borrowing perspectives. This is because the allowances in a month might not be same in another month, thus disabling banks to decide on one's repayment capacity. Therefore some banks ask customers to fill up their basic salaries in the forms. In case the basic salary drawn is less the banks would not even listen to the explanation about allowances. However, in such a situation a person can provide evidence stating that the allowances that he draws are huge and form a sizeable income together with the salary. Some banks might consider these proofs to decide whether it should grant a loan to you or not.

Other financial liabilities

Besides income, lenders check if a person has any other dues or expenses. Credit card dues are also a part of expenses and play a very important role in deciding whether a person is eligible for a loan or not. The lenders look if an individual has obtained other loans before applying for this. In a situation where a person has a large number of loans with tenures above one year, the banks might reject the loan application or reduce the amount of loan to be sanctioned. The banks get the required information from CIBIL, a credit bureau in India. CIBIL provides details about the borrowing habits of the customers to the banks. It lists all accounts of an individual and indicates whether he has been paying his dues regularly or not.