Getting a personal loan might seem like a child’s play as you might have seen a plethora of emails and SMS about instant personal loan approval. This might not be as simple as it seems. But we have listed 5 useful tips which can make getting a personal loan hassle-free.
1. Fix Your Credit Score
This is an often repeated statement but is worth repeating again – a good credit score is a must have for any kind of loan you want to avail. Low credit score signifies that the probability of you defaulting on your future loan payments is high. Therefore, if you have a low credit score it becomes imperative that you improve it before applying for a personal loan. Get your Free Equifax credit report and check for the factors that have resulted into a low credit score and work towards improving it.
2. Calculate Your Affordability
Applying for a loan amount that you won’t be able to repay will lead to rejection of your application. Before sanctioning a loan, the lender will always calculate your repayment capabilities based on your regular income. There are many calculators that are available online. We have one on Paisabazaar.com – Loan Eligibility Calculator which you can use to know your eligibility. The best way will be to know your eligibility before applying for a loan to avoid rejection.
3. Find the Right Lender
Different lenders have different eligibility criteria and loan charges. Therefore, instead of randomly applying to a few banks, it is better that you do the comparison online to know which bank’s eligibility criteria you meet. Under Paisabazaar.com’s Personal loan section, after providing your personal and previous loan details, you will be able to know instantly the best offers that you can avail from banks whose eligibility criteria you meet. To help your comparison, we at Paisabazaar.com also provide all the information regarding various charges such as interest rates, processing fees, prepayment charges that banks will levy on you. So, choose the best option that fits your bill.
4. Check Required Documents at the Earliest
Right documentation is the key for a hassle-free loan. In case of personal loan, the documentation required is relatively lower compared to other loan such as home loan. Therefore, the documentation process is fast is an unsecured loan but still there is a documentation process that has to be followed. Banks will usually ask for your identity proof, residence proof and income proofs before lending you the money. So, keeping the documents ready will speed up the loan approval process.
5. Be Patient
Never apply for too many loans all at once because enquiries by the lenders about your credit score will be recorded as hard enquires in your credit report and banks might picture out that you really are into a financial trap. Therefore, the bank might consider lending you a risky proposition and possibility of approval reduces.
So, if you work on the above key areas and present yourself as a credible borrower with good credit score and proper documentation, it will be difficult for the lender to deny a personal loan to you.