A personal loan is an easy way to fulfil a short-term cash need. This loan is easy to avail and requires no asset to be offered as security. A personal loan is a viable borrowing option because lenders also offer pre-approved offers to those who have a good track record.
While availing a personal loan seems easy, there are certain factors which you need to be aware of. Here are five tips which will can help you in getting your loan application approved without much hassle.
Ensure That You Meet The Eligibility Criteria: When looking to avail a personal loan, the first thing you need to do is to check whether you are eligible for it. Lenders have eligibility criteria for their loans, and it is imperative to go through them in detail before putting in your loan application for approval. Your eligibility is usually decided based on your age, income, job stability and credit score.
Compare To Bag The Best Deal For Yourself: Once you have done your recce for banks from where you can avail a personal loan, compare them on the interest rate at which the loan is being offered. Additionally, give a thought to processing fees, other charges, pre-closure facility etc. Exercise due diligence while comparing the banks on all these factors before applying to secure the loan from the perfect lender.
Maintain A Healthy Credit Score: Having a good credit score makes the chance of approval higher. So, before applying for a personal loan, go through your credit report and fix any type of discrepancy. Banks reserve the best interest rate offers for customers with credit scores above 750 while those below may have to pay higher rates.
Borrow What You Need: Banks can loan you a large amount, but you must borrow only what you need and what you can comfortably repay. Doing this will make sure that your expenses are managed well and you don’t feel the burden of paying a hefty sum as Equated Monthly Instalments (EMIs). Banks will also consider your debt to income ratio before sanctioning the loan amount request by you.
Do Not Apply With Multiple Lenders: While applying to multiple banks for getting a personal loan approved is tempting, you should avoid doing so. The reason being that each fresh loan application triggers a credit score inquiry, which reduces your score marginally. Successive applications, therefore, can hit your score.
By following these simple tips, you can improve your chances of getting a personal loan at a lower interest rate.