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Advanced Loan Assessment Tool
📘 How to Use the Loan Assessment Tool
This guide explains how to use the tool, what each field means, and how results are evaluated.
🔍 Step-by-Step Instructions
- Name, Age, Occupation: Basic identity and risk profiling. Ideal age: 25–60.
- Income & EMI: Used to calculate FOIR. EMI should be < 40–50% of income.
- ITR & PAT: ITR shows declared income; PAT is profitability after taxes.
- Interest, Liabilities, Net Worth: Used to assess debt load and risk.
- Assets: Helps estimate repayment buffer and wealth status.
- Gross Turnover & EBITDA: Business health indicators.
📊 Financial Ratios Calculated
- FOIR: Fixed Obligation to Income Ratio. Ideal: < 50%
- DSCR: Debt Service Coverage Ratio. Ideal: ≥ 1.2
- TOL/TNW: Total Liabilities / Net Worth. Ideal: < 2
- EBITDA Margin: EBITDA ÷ Turnover × 100. Ideal: > 10%
🧠 Psychometric Inputs
- Credit Score: Ideal: 750 to 900
- Job/Business Stability: 5+ years = low risk
- Education: Higher education → better score
- Repayment History: No default = +2 points
- Behavioral Score (1–5): Rated by RM
- Digital Footprint (1–5): Professional presence helps
- Family Stability (1–5): Reflects support network
📈 Interpreting Results
- Score 11–14: ✅ Low Risk → Eligible
- Score 8–10: ⚠️ Moderate Risk → Caution
- Below 8: ❌ High Risk → Avoid or require collateral
💡 Additional Tips
- Verify all documents (KYC, CIC, Tax Receipt, Audit UDIN, Valuator's NEC No. etc.)
- Don’t rely on one ratio; use the full picture
- Use for quick screening, not final sanctioning
- Consider manual override for special cases
Ask 9842334585 to enhance this tool further!
📚 Financial Full Forms & Their Use
This glossary explains commonly used financial terms, their full forms, meanings, and where to locate them in documents.
| Abbreviation | Full Form | Meaning / Use | Found In |
|---|---|---|---|
| FOIR | Fixed Obligation to Income Ratio | Indicates what % of income is already committed toward fixed obligations like EMIs | Self-declared income & EMI details |
| DSCR | Debt Service Coverage Ratio | Measures ability to repay loan from business profit | Profit & Loss Statement, Balance Sheet |
| TOL/TNW | Total Outside Liabilities / Tangible Net Worth | Shows total debt relative to net worth | Balance Sheet |
| ITR | Income Tax Return | Declared annual income to Income Tax Dept. | ITR Acknowledgement |
| PAT | Profit After Tax | Net profit remaining after tax deduction | Profit & Loss Statement |
| EBITDA | Earnings Before Interest, Taxes, Depreciation, and Amortization | Used to assess core operational profitability | Profit & Loss Statement |
| CIC | Credit Information Centre | Tracks credit score & history (300–900) | Credit Report (CIC) |
| EMI | Equated Monthly Installment | Monthly repayment toward loans | Loan Statements, Bank Account |
| WC Loan | Working Capital Loan | Loan used for daily operations of a business | Sanction Letters, Application |
| OD | Overdraft | Facility to withdraw more than account balance | Bank Account, OD Agreement |
This glossary helps ensure clarity and transparency while reviewing or explaining loan eligibility. Always refer to audited financials or authenticated documents, Check UDIN too.
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