With digitized processes and instant approvals, a personal loan is one of the easiest and most convenient ways to fix your immediate financial concerns. Usually a personal loan is sought when the need of money is urgent, like in cases of medical emergencies, home renovations, impromptu trips, weddings etc. To ensure your personal loan is approved in quick time, here are some simple tips to follow:
- Do your homework: Before applying for a home loan, it is necessary to do your own research and explore various options of personal loans available out there. You will also learn about the rate of interest, tenure, documentation required and all the other necessary information. Most of the information regarding loan is available online and you just have to shortlist the bank and call its customer care for further formalities
- Know your Credit Score: Your credit score, which is based on your credit history, plays an important role in ensuring that you get approved for a personal loan. A high credit score i.e. one which is closer to 900 implies that you have an excellent chance of being approved for a personal loan while a score closer to 300 implies that your chances of approval are slim. Paisabazaar.com enables you to see the chance of approval against each loan option, according to your credit score. This allows you to apply for a loan from a bank where the chances of approval of your loan application are high. If you have a low credit score, figure out the areas lacking behind in your credit profile and improve them. In case you get rejected because of your bad score, it will drop even more, which will make it more difficult for you to rebuild it.
- Ensure that you have not applied for a personal loan in the past 6 months: If the lender checks your credit history, he will see that you have availed a loan in the recent past and might get the impression that you won’t be able to take the burden of paying more EMIs. To avoid this situation, you will have to ensure that there is at least a gap of 6 months between the loan applications.
- Compare options before choosing: Most applicants base their choice of a personal loan on one key feature – the interest rate. Instead of having such a restricted view, it is better to consider additional factors such as loan tenure, maximum loan amount, processing fees, pre-payment/foreclosure charges, etc. before you decide on a personal loan offer. Aggregators like Paisabazaar.com help you compare various loan options on key parameters. This will help you choose a loan option that is most suitable to you and you are eligible for, leading to quick approval and disbursal of the loan amount.
- Keep your documents ready: Due to availability of Aadhaar Card and digitalization, lenders do not need a long list of documents for processing your loan. The documentation process has become a lot convenient and simple these days. But still you have to be very careful as proper documentation makes sure that your loan is approved quickly. Double check your documents before submitting to avoid any delay in loan processing.
- Have a strong savings account: It not only signifies that you manage your finances properly and save money but also that you have a good amount of monthly income being credited to your account every month. This impresses lender and your chance of getting a loan quickly increases.
- Have a stable job: Ensure that you have some job security or have been working in your current organization from past 6 months. This condition is really important in case of an unsecured loan, where you do not put any collateral against the money offered. Therefore, the banks also feel safe to offer loan to those with minimum 2 years of experience and above because it ensures consistency of monthly income.
- Avoid simultaneous applications: Every personal loan application generates a credit report request from the prospective lender. This is termed as a “hard look” and the details of this credit report request show up on your credit report with date when this check was requested and purpose. If multiple queries are generated simultaneously, your report will show details of these requests within a short interval. This is deemed as “credit hungry” behavior by prospective lenders and can lead to rejection of your personal loan application. Getting rejected for a loan is a sure shot way to tank your credit score and would decrease your chances of being approved for new credit in the future.
- Choose the loan amount as per affordability: Your lender will definitely check your repayment ability before offering you the loan and for that he will refer to your current account. If you apply for a loan amount that is very high, your loan application might get rejected. It is your responsibility to choose tenure and check if you can repay the amount without any inconvenience.
While filling for your loan application, you need to be careful and patient at the same time. It is a make or break situation so you have to fulfill all the expectations of your lender and ensure that you don’t give him a single chance to question you.