Six tips to get your personal loan approved in no time: Personal loans have become most sought after choices for meeting immediate financial needs. In the case of personal loans, one can enjoy the flexibility of usage and quick processing. Being unsecured in nature, they require no collateral security. The only thing that matters most is your credit history. However, one must ensure certain basic things before he goes to apply for a personal loan. Ensuring these things will increase the chances of your personal loan sanction:
Six tips to get your personal loan approved in no time
1. Ensure that you have a good credit score:
Credit score is the marks given to you based on your past performance and regularity in honoring the credit bills and loan repayments. If you are the one who never lets the installment become overdue, paying all the credit card bills on-time, then your credit score would be very good. A good credit score is 750+ which means that you have a higher chance of getting your loan approved.
In case you have never got a credit rating done, then check with the credit rating agencies providing all the necessary details. It is very important to check your credit score before you apply for the loan. In case you still have few more bills that are due, try to clear them as soon as possible and then go for the loan. Remember the fact that each rejection will negatively affect your credit score.
2. Choose the reasonable loan amount:
The first thing bank or any other loan provider checks is your repayment capacity. So, before deciding up on the amount of loan you want to apply for, ensure that it is in line with your income level and repayment capacity. If you have gone to the bank for a hefty loan that is no way near to your income level, then the banker will out rightly reject it. There are various loan eligibility tools available online. Check your eligible amount using these and decide the amount within this level in accordance with your financial needs.
3. Avoid multiple loan applications:
If you think that applying to more banks will increase your chances of getting the loan, you are in fact wrong as this is true in exactly the opposite way. Applying for multiple banks during the same period of time is not at all good for you. Each application you make with the bank will request for a credit report with the credit rating agency. So, if a bunch of applications have been given by you to a handful of banks in the same timeline, this will make look ‘credit hungry’ leading to a possibility of more rejections.
4. Don’t Apply for Personal Loan While Paying Off another Loan:
Banks generally do not show interest in lending to those having a loan outstanding. Ensure that you haven’t taken another loan in at least the past six months. Unless you have a rapid rise in your income or a new high-paying job, don’t go for a second loan while you are still in the process of clearing out the existing one. Apply only after discharging the 1st loan. The chances of approval are relatively high for the applicant with no existing loan than the guy with one.
5. Cultivate a habit of diversifying your credit:
A good mix of secured and unsecured loans along with limited overdraft is an indication of healthy way of managing the financial needs. This may give an impression to the bank that you are good with your credit management.
6. Get all your documents ready:
Carefully read the loan applications to know what the documents required are. Ensure that no discrepancy between the different papers. For example, your date of birth could be different between Aadhar and PAN card. So, correct such discrepancies before applying. Because the banks will never accept such applications though everything else is right in every respect.