If you want to apply for a personal loan, here are a few important tips you must consider to avoid any hiccups in the loan approval process.
Know and meet the eligibility criteria
There are plenty of banks and other financial institutions that offer personal loans. Each bank has their own eligibility criteria. Before you approach any bank make sure that you do a research of their requirements and ensure that that you meet the criteria so that your loan application is processed and the cash is disbursed quickly. Typically, most banks in India require the applicants to be at least 21 years and the maximum age for applying is 60 years.
Focus on improving your credit score
The credit score of the applicants is one of the most important criteria that the banks consider before approving the personal loan applications. A high credit score is a proof that you are a safe borrower and the banks will be confident that they can recover the loan. However, if you have a low credit score, you would be considered as a risky borrower and the chances of your loan application being reject is high. Hence, before you apply for a personal loan, make sure that you check your credit score and if your score is low take your time to improve the score.
Choose the amount carefully
Before you draft your personal loan application it is advisable that you first assess your current financial situation and know exactly your repayment ability. Every lender, before disbursing the loan amount checks the applicants’ repayment capacity based on their income and their debts. Hence, if you apply for a higher amount and if the bank feels that you won’t be able to repay the amount within the loan duration, chances are that your application would be rejected. To avoid this rejection, make sure that you apply for an amount that you can easily repay.
Don’t approach multiple banks
If you think you can improve your chances of getting the loan by approaching different banks, you are in for dejection. As a matter of fact, banks do not like the applicants who apply at different banks. This is because it reduces the chances of the applicant choosing that specific bank.
Do not apply for a personal loan while you have other debt
Before you apply for a personal loan make sure that you have not applied for any other loan in the past six months. This is important because the lenders usually avoid approving the loan of such applicants because it increases their liability and the banks would think that it would be difficult to recover the loan from them. So, if you want to apply for a personal loan, make sure that you pay off all your previous debts.
Now that you know the secret tips and tricks of getting your loan application approved, make sure that you follow these rules to improve your chances of getting the loan.