Personal loans have recorded a sizable growth in new accounts between 2018 and 2019, making it the fastest-growing category in India’s lending sector. This notable growth can be attributed to the fact that these credits have become much more easily accessible over the years, making it simpler for borrowers to avail of them.
The trend also indicates that financial institutions have eased their personal loan eligibility criteria and other adjacent terms that have made such advances readily available for all.
While such loans demand minimal eligibility requirements, some borrowers may fall short to comply with them. Following are a few crucial tips that one should note for elevated eligibility to improve their chances of loan application approval.
How to improve personal loan eligibility?
Several factors to calculate personal loan EMI to avail personal loan . Paying attention to such factors can certainly improve your chances to get your loan approved without hassle. These include –
i.Maintain a healthy credit score
Credit or CIBIL score is one of the primary factors on which lenders base their decisions to disburse credits to individuals.
Since personal loans are unsecured in nature, an individual’s capacity to repay the loan is based on his/her ability to maintain a healthy credit score. Ideally, an individual should try to maintain a minimum credit score of 750 to ensure hassle-free approval of their application. A low or bad credit score can impact one’s personal loan eligibility to quite an extent.
ii.Keep a check on monthly debt
If an individual’s monthly debt exceeds 50% of their total income, it might impede his/her chances of availing a personal loan. It is, thus, imperative to maintain a healthy debt-to-income ratio. Therefore, to increase your chances of getting a loan, you should clear off any existing debt and curb the monthly credit usage to the accepted limits.
Furthermore, you can implement simple ways to manage your debt effectively. This way, you can improve your chances of hassle-free approval of loans.
iii.Check the eligibility requirements beforehand
One of the best ways to increase one’s personal loan eligibility is to check the criteria put forth by lenders beforehand and ensure compliance with them. Simple eligibility terms also act as a parameter to choose the right personal loan lender.
For instance, lenders like Bajaj Finserv have put forth simple criteria pertaining to one’s age, nationality, employment status, income and credit score to deem them eligible to avail the advance. Thus, taking special care to fulfil such criteria can boost one’s chances of availing of the loan to quite an extent.
Furthermore, the lender also provides pre-approved offers that make obtaining such advances much easier. Potential borrowers can get these offers on various types of financial products, including personal loans and business loans. You can check your pre-approved offer by submitting basic details such as your name and phone number.
Before applying for the loan, borrowers can also make use of online personal loan eligibility calculators to ascertain their chances of availing the amount applied for.
iv.Avoid multiple application for credit
Making multiple loan applications during a short period can make a borrower seem credit hungry. This can hurt their eligibility to avail of loans. Furthermore, frequent applications can lead to multiple credit score inquiries from different lending institutions and, in turn, hinder one’s chances to avail credits without hassle.
It is thus best to have a six months’ gap between consecutive loan applications to bolster one’s eligibility to get a loan.
v.Apply with a co-borrower
In case of a low credit score, individuals can apply with a co-applicant to increase their chances of getting the loan without difficulty. A good credit profile of a co-borrower also brings other advantages such as a higher loan amount and better interest rates, along with improved personal loan eligibility.
Following these few tips can certainly help potential borrowers to boost their loan eligibility. Furthermore, to avail of the best personal loan features and benefits, one should also be careful while choosing a lender.
You can also visit personal loan apps for personal loans.