A rising number of people are looking for Personal Loans to meet their needs & demands. These various salient features of Personal Loans allow people to choose this as one of the most preferred loan types when it comes to the instant financial help to accomplish many tasks and get rid of several inevitable financial crises.
People may need Personal Loans to accomplish their goals and urgent needs like covering medical dues, for Weddings, traveling on holiday, for debt consolidation, or covering various needs and demands. Personal Loans are unsecured. Thus, it doesn’t require any insurance to be pledged to avail Personal Loans. Well, Personal Loans attract higher rates of interest thereby. Personal Loans require an easy documentation process and involve minimal formalities for the completion of the whole process. Although these are the unsecured loans, the lending agencies conduct an eligibility criteria check of the loan seekers before they sanction the Personal Loans to ensure that the Loan doesn’t get the default.
This raises a serious question about how any loan seeker can boost the Personal loan eligibility to get approval for the Personal Loan. Now, here are the tips on how to effectively improve the eligibility criteria, Hence, successfully applying for the Personal Loan:
Getting a Higher Credit Score
Now, Getting a Higher Credit Score will always help you get lots of benefits when you apply for Loan, and a personal loan is no exception. A personal Loan is an unsecured loan, and the lending agencies cross-check some essential factors like CIBIL Score and other before finalizing the applicant’s repayment capability. The CIBIL Score is a crucial aspect, as it denotes the financial journey of the loan applicant. Well, Getting a higher credit score attached with your name allows building credibility of yours in the banks’ eyes and imbibe a sense of confidence among the banks for their Loan not getting default. So, getting the Higher CIBIL Score is a way to get better deals on Personal Loans & get their Loan approved.
So, What we you do to improve the Credit Score? This higher credit score can be achieved by gathering good rewards points on your name, which can be achieved by paying all your credit card dues on time, not defaulting on any loans, not defaulting on any EMIs for the month following a clear and tangible financial journey.
Selecting the lender which offer the highest loan amount
Selecting the lender which offers the highest loan amount ensures that you can get the loan amount required by you effortlessly. Consider a case where you want a loan amount of 10 lacs, & you applied to the lending agency, whose maximum cap is just eight lacs. What’s the point in using for those lending agencies, as ultimately, you will get rejected for your loan application? Therefore, applying for the Personal Loans, whose maximum cap is much higher than the required loan amount, ensures that you can quickly get the loan amount if all other conditions are met.
Apply for the smaller Loan Amount
It’s being said that “Borrow, what you need”. Analyze your goals and demands, thus evaluating the total amount you need to meet those demands and needs. Now, Apply for the loan amount, which is required, and even if you are entirely eligible for getting a higher loan amount, it is always recommended that you need to apply for the loan amount you need. The application for a smaller loan amount ensures that your application for the Personal Loan gets approved. At the same time borrowing only what you need allows you to get relieved from overburdening yourself.
Increase the Loan tenure
To boost your eligibility criteria, you can increase the loan tenure, which allows the lowering of your EMIs. The less is the EMI per month, the more eligible you are for getting a personal loan. The longer loan tenure reduces the EMI per month, and thus a person becomes exceptionally qualified in handling the incurring the EMIs, every month. You will feel relieved from the easy EMIs, and therefore your lifestyle may not get hampered because of higher EMIs.
Keep down your Credit Utilization Ratio
The credit utilization ratio indicates how much credit you are utilizing against what the total amount is available to you. The higher is the credit utilization ratio, the more it suggests that you are a credit hungry person. The higher credit utilization ratio indicates your need for more credit and imbibes a sense of suspicion on your capability to repay the loan amount. It is being said that the Credit Utilization ratio must be below 30%.
Keep your professional life intact.
Be steady in your Professional life. The more persistent you are in your professional life, the more eligible you are to avail of personal Loans. Don’t be a job hopper and try to stick to the same company for at least one year, to successfully apply for the Personal Loan. Even if you are self-employed, you need to be stable in the same. It is being said that a person needs to be in the job for at least two years to showcase the higher elgi8bility for your Loan. Simultaneously, for the self-employed, a person must be self-employed for the same duration of time. The loan seekers must be stable enough to imbibe the lenders’ confidence for the repayment of loans.
Ensure you have an excellent in-hand income
A good in-hand income allows the people with the eligibility of higher personal Loan. As per the study, a person can pay an EMI of 40% to bring in-home salary. Thus, the more is the person’s salary, and the more is the person’s eligibility to get the higher amount.
Ensure you are not defaulting on any loan
While you are applying for the Personal Loan, ensure that you are not defaulting on any other loan. You can also cross-check if there are any credit card dues on your name. The defaulting on any loans and dues on your name brings down your CIBIL Score and creates a bad reputation in front of your lenders. Always remember that defaulting on any loans and Credit Card dues will instantly reflect in your Credit Card report and will lower your CIBIL Score, and subsequently, lower down the chances of getting approval for the Personal Loan.
Be a joint applicant.
In case you have a low CIBIL Score, and you are feeling difficulty getting approval for the Personal Loan, there are many ways to boost your eligibility for the Personal Loan. Personal loans can be rejected for several reasons, among which the incapability of a person towards the repayment of a loan is one of the most important reasons. This incapability may be because of several reasons, and your low CIBIL Score, your low income are just some of the senses. You can get yourself attached to someone else in the personal Loan application in such a particular case. Getting someone (especially those who have high eligibility criteria) attached to your loan application can improve your Loan eligibility criteria. You may find it simple to get approval for your Loan, even if you are carrying low Eligibility criteria.
You can include the purpose of availing a Personal Loan.
While there’s no obligation of including the purpose of the Personal Loan, you may opt to have the goal to boost your chances to get an approval for the Personal Loan. By merely mentioning all the reasons you are availing the Personal Loan, it can help you get support for the Personal Loan. Mentioning the actual reason for the Personal Loan can help you in getting the Personal Loan quickly. For example, if you say that you need the loan amount for the treatment or cover wedding costs, they are considered a genuine case, and the banks may decide to sanction the loan amount.
Close down all smaller loans
Before you apply for the Personal Loans, if you are carrying any other smaller loans, try to close them. Your eligibility can drastically increase if you can close down your existing loans before applying for the larger personal Loan. How does the closing down of all other current loans impact on your Loan application? The effect of the closing down of existing loans increases your take-home income, thereby leading to higher eligibility and chances of getting approval for the higher loan amount.
Also, more are the existing loans on your name, and the lesser is the repayment capability of the person is; the current loans are indications of your need for more credit, thus bringing in more suspicion on your repayment capability, as chances of loans going default improves to a certain extent.
Don’t apply for too many Personal Loans at different banks.
Applying for a Personal Loan at various banks at the same time, lower your eligibility criteria. Thus, abide by applying for the Personal Loan at multiple banks. It would be better to analyze all the offers and schemes from different banks, thereby choosing the best offer and applying for the Personal Loan at the same bank. Never rush in for the numerous applications at other banks, and it would be better if you do your research and apply to the best deal.
Declare all sources of income
While the income proof is needed to be furnished to avail the Personal Loan, If you have different sources of income such as rentals and dividends drawn on investments, you can deliver all those information to the lending agencies and let the banker know it, which ultimately boost your eligibility for the Personal Loan. You can also include the details of any future bonuses (if any), to further increase your repayment capability and thus boost your eligibility criteria for getting the Personal Loan. Declaring al, your income sources will be a practical step to expand your Loan eligibility.
Make sure you need the Loan.
As we all know, the personal Loan carries a high-interest rate and has relatively shorter loan tenure. Make sure that you are in real need of a personal loan. There are different kinds of loans available in the market, and getting one of them in completing the required task, can be beneficial compared to getting a personal loan. The secured loans carry a much lower interest rate, and you can avail any one of them to accomplish your goals and demands. Thus, look towards various other loan types before deciding on the Personal Loan.
At the same time, before opting for any loan type, decide; are you in serious need of the Loan? Are the tasks for which you want the Personal Loans avoidable? If you feel certain aspects can be avoided and are not urgent, it would be better if you avoid taking a Personal Loan. You must remember that every Loan comes with a liability to pay, and this payment of Loan must be made without fail. You can also check various other money sources, like your near ones and your friends, who can lend you the money.
Also, Check :
Opting for the Personal Loan binds you in EMIs and, thus, analyzes your future liabilities, your stability in income source, and other aspects before making a final decision on availing a Personal Loan.