What Are the Ways to Perfect Your Personal Loan Application?
When it is about personal loans, it is crucial for lenders or banks to be thoroughly aware of how you as a borrower will repay the personal loan. If you are maintaining a strong credit history by repaying your outstanding debts on time and in full, then there is nothing like it. It will enhance your credibility as a personal loan applicant and enhance your loan approval chances.
Besides making timely repayments and reinforcing your creditworthiness as a borrower, there are various other steps that you must consider to accelerate your personal loan application process. Before this, you must ensure to choose the best bank for personal loan as per your suitability. In case you are in urgent need of funds, you may apply for an instant loan without CIBIL. These are pre-approved loans that are approved based on your credit profile.
Are you looking to renovate your home or make a massive purchase for an important event? A personal loan can assist you in covering such additional expenditures as it is a crucial financing solution to avail funds. Moreover, due to the ongoing COVID pandemic times, you might require a personal loan to mitigate your unanticipated expenditures at any time. In such uncertain times, personal loans owing to their security or collateral-free nature and lower personal loan interest rates, have gained massive popularity amongst working professionals.
In case you are also contemplating avail of a personal loan, here are important tips to enhance your chances of availing personal loan approval –
Maintain a strong credit score –
A credit score decides your financial standing. Having a healthy credit score shows you as a low-risk element & vice versa. Here are a few of the quick tips to form a strong credit score –
∙ Ensure all your liabilities are paid on time.
∙ Clear all your outstanding credit card debts.
∙ Periodically keep a check on your credit score for a personal loan.
∙ Manage your credit and keep your usage of credit cards as low as possible.
∙ Avoid applying for a lot of credit.
You can rebuild the credit history in the above-mentioned ways. However, it may take time as negative info like late payments or bankruptcy, if any, remains for a while in your credit report. If you do not hold a good credit history, form it by availing a credit card and clearing off your repayments on time in full. It would be a prudent move to take up healthy financial practices to maintain a strong credit score so that you may negotiate favourable terms and conditions.
State all the income sources
In your personal loan application, ensure to mention all your income sources as they will decide your risk eligibility. Holding more than 1 income source will create a positive impact. Also, lenders will consider your existing loans and other important liabilities before approving the loan. Moreover, your occupation makes a massive difference. Applicants with stable job profiles and who are self-employed professionals like chartered accountants, doctors, and lawyers are usually placed in the risky category.
Pay all your pending liabilities.
Pending liabilities are like a bottleneck, compelling you to turn down your personal loan application. A poor repayment history, particularly the debt that has been unpaid for over 7 years, will probably make an excellent impression on your financial health. In simpler terms, ensure to make all your payments upfront and review that you do not hold any outstanding liabilities.
Review if you mitigate the eligibility criteria
Before you apply for a personal loan, compare your eligibility needs of distinct lenders. Most financial institutions in India hold a minimum age of 21 years and a maximum age requirement of sixty years. However, this differs from one lender to another. Additionally, banks even have a different age requirement for self-employed and salaried professionals.
Likewise, most banks even hold a minimum income requirement and specific employment requirements. Like age requirement, income and employment criteria even differ from one bank to another. Before you apply for a loan from a specific lender, ensure to check if you mitigate its eligibility needs for speedy loan approval.
Keep your documents handy.
Major documents that you will require are listed below –
∙ Identity proof with ID proof like PAN card, driving license, or passport.
∙ Age proof – documents like voter ID card, PAN card, and driving license are required.
∙ Address proof – documents like voter ID card, passport, driving license, passport, ration card, Aadhaar card or utility bills.
∙ Income proof – current or past 3 months’ bank statements and pay slips.
Avoid skipping the research.
One of the major errors you must avoid is not researching. Distinct banks provide a distinct rate of interest. Before you settle for a personal loan from a bank, consider all the crucial options. If you go for the very first lender that provides a personal loan, you may miss out on better personal loan offers from various other personal loan lenders. Do not forget to have a look at the Personal Loan Processing Fee and other important applicable fees. Compare all such factors before you select a specific loan scheme and lender for a personal loan.
Lastly, lenders will for sure want to review your credit history. If your credit score is anywhere less than expected or if you default on your repayments, it may be very difficult for you to avail a personal loan. So, it is always advisable to ensure that your finances are always in order. Also, always ensure to review your credit report before you make your application for a personal loan. In case there are any errors or inaccuracies, ensure to get them corrected before you apply for a personal loan.
Here’s a pro tip just for you – Always ensure to match your loan and proceed with your requirement. Regardless of whether you are taking up a long-term or short-term loan, always ensure to borrow the amount that you require. It is advisable that you avail a loan that you simply can pay off. Also, ensure to steer clear of your existing loan borrowings to enhance your eligibility for a higher loan proceed.