We all have many personal goals that we wish to accomplish, sooner rather than later. However, a vast majority of these goals, such a supporting our child’s education, or taking that much-awaited family vacation needs us to have enough funding, which is easier said than done. In a bid to fulfill such goals, quite often we look towards an additional source of finances such as a Personal Loan.
Thankfully for us all, availing a Personal Loan has become more accessible than ever before, owing to the simplified process incorporated by banks and online lenders! That being said, if you are planning to apply for a Personal Loan, adhering to the following tips can help you get a swifter approval.
Know Your Credit Score
As must be known to you, your credit score is one of the primary factors that determine the approval of your loan application. You may be lead to think that simply paying your bills on time will ensure a good credit score.
However, it is essential to understand that the credit score depends on numerous other factors such as – Credit Utilisation Ratio, and other loans in your name and/or guaranteed by you. Besides, sometimes reporting errors or even frauds can lead you to a poor credit score.
Hence, you must obtain a credit report before filing your application. Not only will it save you from any last minute disappointments, but will also give you the necessary time to rectify your score beforehand so that it is easier for you to get instant loan approval.
Ask Only for What You Can Repay
It is an unsaid rule that your EMI should be less than or equal to half of your monthly income. So, before filing your application, make sure that the amount you ask for is in line with your monthly income, and that you can justify the same through your salary slip or income tax statements. If you place a request for a loan that is exorbitantly high, the chances are that your application will be turned down.
Remember, your lender will only approve the loan if they are convinced that you will be able to repay the same, within the stipulated tenure. Therefore, keep the principal sum as low as possible.
Apply to Only One Institute
In a bid to get the loan approved at the earliest possible, many people apply for Personal Loans to various lenders simultaneously. However, you must note that such a trick can lead you into serious trouble. To begin with, lenders will take a note of your numerous simultaneous applications, and may consider that you are in a financial crisis. This will lead them to question your ability to repay the loan, thereby drastically reducing the chances of approval. Consequentially, the higher the number of loan rejections, the poorer will it reflect on your credit history, thus diminishing your chances of getting a loan approved, even in the coming future.
Hence, make sure that you apply for a Personal Loan only to a single lender at any given point in time.
Have a Steady Source of Income
Since Personal Loans are unsecured, the lenders are at a heightened risk of incurring losses should you fail to repay the same. To minimize the risk of default, lending institutions often check your source of income and its stability. Hence, it is crucial that when you apply for a Personal Loan, you can give evidence of at least six months of employment in a company, or at least one year of running your business with constant revenue generation.
If you haven’t completed this minimum requirement, it is advisable for you to wait before you apply for the loan.
Keep EMI Expenditure to the Minimum
If you are already servicing a home or a car loan, it is convenient to say a significant amount of your monthly income is going towards tour EMIs (Equated Monthly Instalments). To obtain a Personal Loan, in addition to your existing credits, it is crucial for you to give evidence to the lending institution that your EMIs towards the other loans does not exceed thirty percent of your monthly income. Only after you do so, will the lender be assured of your ability to repay the loan, and will readily approve your application.
Wait for 6 Months between Two Loan Applications
Continually applying for loans usually lead the banks to believe that you have insufficient funds and poor financial discipline. Needless to mention, this will reduce the chance of loan approvals. Hence, it is advisable for you to maintain a gap of at least six months or more between two applications for Personal Loans.
We hope that you are now more informed and better equipped to file your loan application. Just follow the tips mentioned above, and you can rest assured of getting a quick approval on All Types of Personal Loans.
To apply online for Credit Cards, Secured Loans and Unsecured Loans, visit www.mymoneymantra.com, the leading online lending marketplace that offers financial products from 60+ Banks and NBFCs. We have served 2 million+ happy customers since 1989.
Also Read: Few Things About Credit Scores You Must Know if You’re New to the Loan World
Talk to our Loan Specialists toll-free at 1800 103 4004 to know more about our products and offers.
