5 Qualities of a Good and Responsible Borrower

Posted by Bhavna Singhal on December 7th, 2018

 Lenders are often on the lookout for good and responsible borrowers. They favor such borrowers because they know that their loans would be repaid in time. Even the interest rates for good borrowers are reduced by lenders to attract them to borrow a loan against Property. The loan terms and conditions are also flexible and lenders are open to negotiating if the borrower is good. With so many advantages which good borrowers get, don’t you wonder who such borrowers are? What are the traits which make borrowers good and responsible in the eyes of the lenders?

You don’t have to wonder any more. Here are the five main qualities of borrowers who are considered to be good and responsible by lenders –

1. They have good eligibility qualifications

The first thing which determines the borrower to be good is his eligibility qualification. Good borrowers are those who fall in the perfect age group, have good income levels, steady occupation and also have all documents handy. They are neither too young nor old, earn a very good income every month, have a good financial standing and don’t have too many existing debts.

2. Their credit score is high

Good borrowers always have a credit score which is more than 700. This shows that they have been responsible in repaying their debts on time in the past and would continue to do so even in the future. Moreover, a good credit score also shows that the borrower has a good credit mix and a low credit utilisation ratio which assures lenders of the repayment of their loans on time.

3. They choose affordable loan amounts

Even when good borrowers can avail high quantum of loans, they are always careful in choosing the loan amount. They know the exact financial requirement that they have and the possible sources of fulfilling such requirements. They resort to loans only when needed and even then they choose limited and affordable loan amounts so that they can repay the loan easily without straining their finances.

4. They always pay the loan on time

Responsible borrowers are those who always stick to the repayment date of the EMI. Their EMIs are never late and they, usually, arrange for ECS facilities to repay the loan every month on time. This prevents them from forgetting their loan repayment dates and the repayment is ensured every month on or by the due date.

5. They are accountable for the loan

Good borrowers always take personal accountability for the loan which they avail. Even if the loan has a co-applicant or a guarantor, good borrowers repay their loans themselves. Even in dire circumstances when they fail to pay the EMI on time, they take the responsibility to pay the interest on the defaulted EMI. Thus, good and responsible borrowers always take their debts seriously which makes them less likely to default on the loans availed.

Which of these traits do you have?

As many traits as you have the better would be your chances of availing the loan. Moreover, having these traits would also make you a good and responsible borrower.