diff --git a/src/checkLoanEligibility.c b/src/checkLoanEligibility.c
new file mode 100644
index 0000000..e3ba64c
--- /dev/null
+++ b/src/checkLoanEligibility.c
@@ -0,0 +1,30 @@
+#include "checkLoanEligibility.h"
+#include "_file_information.h"
+
+bool checkLoanEligibility(int user_id) {
+
+    // Eligible only when user is present in CustomerDataFile 
+
+    bool keep_reading = true;
+    bool eligibility  = false;
+    char buffer[MAX_LENGTH];
+
+    FILE *file = fopen(CUSTOMER_DATA_FILE, "r");
+
+    while(keep_reading) {
+        fgets(buffer, MAX_LENGTH, file);
+
+        if (feof(file)) {
+            keep_reading = false;
+        }
+        if(user_id == atoi(buffer)) {
+            eligibility  = true;
+            keep_reading = false;
+        }
+
+    }
+
+    fclose(file);
+    return eligibility;
+
+}
\ No newline at end of file
diff --git a/src/checkLoanEligibility.h b/src/checkLoanEligibility.h
new file mode 100644
index 0000000..4415c60
--- /dev/null
+++ b/src/checkLoanEligibility.h
@@ -0,0 +1,10 @@
+#ifndef CHECKLOANELIGIBILITY_H_
+#define CHECKLOANELIGIBILITY_H_
+
+#include <stdio.h>
+#include <stdbool.h>
+#include <stdlib.h>
+
+bool checkLoanEligibility(int user_id);
+
+#endif
\ No newline at end of file
diff --git a/tests/test_checkLoanEligibility.c b/tests/test_checkLoanEligibility.c
new file mode 100644
index 0000000..4107a62
--- /dev/null
+++ b/tests/test_checkLoanEligibility.c
@@ -0,0 +1,57 @@
+#ifdef TEST
+
+#include "unity.h"
+#include "checkLoanEligibility.h"
+
+void setUp(void)
+{
+}
+
+void tearDown(void)
+{
+}
+
+void test_checkLoanEligibilitySuccess(void) {
+
+    /* Arrange */
+
+   int user_id[3]   = {1234, 1327, 1666}; // user_ids from file for testing
+
+   bool result[3];
+
+   /* Act */
+   
+   for (int i = 0; i < 3; i++) {
+        result[i] = checkLoanEligibility(user_id[i]);
+    }   
+
+    /* Assert */
+    
+    for (int i = 0; i < 3; i++) {
+        TEST_ASSERT_TRUE(result[i]);     // Pass if user_id is found in the file
+    }
+}
+
+void test_checkLoanEligibilityFailure(void) {
+
+    /* Arrange */
+
+   int user_id[3]   = {12314, 127, 166}; // Random wrong user_ids
+
+   bool result[3];
+
+   /* Act */
+   
+   for (int i = 0; i < 3; i++) {
+        result[i] = checkLoanEligibility(user_id[i]);
+    }   
+
+    /* Assert */
+    
+    for (int i = 0; i < 3; i++) {
+        TEST_ASSERT_FALSE(result[i]);     // Pass if the returned result is false
+    }
+}
+
+
+#endif // TEST
\ No newline at end of file