Tips to boost your Personal Loans eligibility
There have been a rising number of people, who are looking for the Personal Loans to meet their needs and demands. The various salient features of Personal Loans allow a people to choose this as one of the most preferred loan types when it comes to the instant financial help to accomplish many tasks and get rid of several unavoidable financial crises.
People may need Personal Loans to accomplish their goals and urgent needs like covering medical dues, for Weddings, travel on a holiday, for debt consolidation or to cover various needs and demands. Personal Loans are unsecured in nature, thus it doesn’t require any collateral to be pledged to avail Personal Loans. The Personal Loans attract higher rates of interest, thereby. The Personal Loans require easy documentation process and involve minimal formalities for the completion of the whole process. However, since these are the unsecured loans, the lending agencies conduct an eligibility criteria check of the loan seekers, before they sanction the Personal Loans, in order to make sure that the Loan doesn’t get default.
This raises a serious question, as to how any loan seeker can boost the Personal loans eligibility to get an approval for the Personal Loan. Here are the tips on how to effectively improve the eligibility criteria, thus successfully applying for the Personal Loan:
Getting a Higher Credit Score
Getting a Higher Credit Score will always help you in getting lots of benefits when you apply for loan and a personal loan is no exception. A Personal Loan is an unsecured loan and the lending agencies cross-check some important factors like CIBIL Score and other before finalizing the repayment capability of the applicant. The CIBIL Score is an important aspect, as it denotes the financial journey of the loan applicant. Getting a higher credit score attached with your name, allows building a credibility of yours in the eyes of the banks and imbibe a sense of confidence among the banks, for their Personal Loan not getting default. Thus, getting the Higher CIBIL Score is a way to get the better deals on the Personal Loans and get their loan approved.
What, can you do to improve the Credit Score? The higher credit score can be achieved by gathering good rewards points on your name, which can be achieved by paying all your credit card dues on time, not defaulting on any loans, not defaulting on any EMIs for the month and by following a clear and solid financial journey.
Choosing the lender which offer the highest loan amount
Choosing the lender which offers the highest loan amount ensures that you can get the loan amount required by you, easily. Consider a case, where you need a loan amount of 10 lacs, and you applied to the lending agency, whose maximum cap is just 8 lacs. What’s the point in applying for those lending agencies, as ultimately you are going to get rejected for your loan application? Thus, applying for the Personal Loans, whose maximum cap is much higher than the required loan amount, ensures that you can get the loan amount, easily, if all other conditions are met.
Apply for the smaller loan amount
It is being said that “Borrow, what you need”. Analyze your goals and demands, thus evaluating the total amount you need to meet those demands and needs. Apply for the loan amount, which is needed and even if you are quite eligible for getting a higher loan amount, it is always recommended that you need to apply for the loan amount, which you actually are in need of. The application for a smaller loan amount ensures that your application for the Personal Loan gets approved. At the same time borrowing only what you need, allows you in getting relieved from overburdening yourself.
Increase the Loan tenure
In order to boost your eligibility criteria, what you can do is to increase the loan tenure, which allows the lowering of your EMIs. The less is the EMI per month, the more eligible you are for getting a personal loan. The longer loan tenure reduces the EMI per month, and thus a person becomes quite eligible in handling the incurring the EMIs, every month. You will feel relieved from the easy EMIs, and thus your lifestyle may not get hampered because of higher EMIs.
Keep down your Credit Utilization Ratio
The Credit utilization ratio is an indication of how much credit you are utilizing against what the total amount is available to you. The higher is the credit utilization ratio, the more it indicates that you are a credit hungry person. The higher credit utilization ratio is an indication of your need for the more credit and thus imbibes a sense of suspicion on your capability to repay the loan amount. It is being said that the Credit Utilization ratio must be below 30%.
Keep your professional life intact
Be steady in your Professional life. The steadier you are in your professional life, the more eligible you are, to avail personal loan. Don’t be a job hopper and try to stick to the same company for at least one year, to successfully apply for the Personal Loan. Even, if you are self-employed, you need to be stable in the same. It is being said that a person needs to be in the job for at least 2 years to showcase the higher elgi8bility for your Personal Loan. At the same time, for the self-employed, a person must be self-employed for the same duration of time. The loan seekers must be stable enough to imbibe the confidence among the lenders for the repayment of loans.
Ensure you have a good in-hand income
A good in-hand income allows the people with the eligibility of higher personal loan. As per the study, a person can pay an EMI of 40% of the total bring in-home salary. Thus, the more is the salary of the person, the more is the eligibility of the person to get the higher amount.
Ensure you are not defaulting on any loan
While you are applying for the Personal Loan, ensure that you are not defaulting on any other loan. You can also cross check if there are any credit card dues on your name. The defaulting on any loans and dues on your name, in fact, bring down your CIBIL Score and thus creates a bad name in front of your lenders. Always remember that defaulting on any loans and Credit Card dues will instantly reflect in your Credit Card report and will lower your CIBIL Score, and subsequently, lower down the chances of getting an approval for the Personal loan.
Be a joint applicant
In case, you are having a low CIBIL Score and you are feeling difficulty in getting an approval for the personal loan, there are many ways, which can boost your eligibility for the personal loan. The personal loans can be rejected because of several reasons, among which the incapability of a person towards the repayment of a loan is one of the most important reason. This incapability may be because of several reasons, and your low CIBIL Score, your low income are just some of the reasons. In such a particular case, you can get yourself attached to someone else, in the application of the personal loan. Getting someone (especially those, who have high eligibility criteria) attached with your personal loan application can help you in improving your eligibility criteria for the Personal Loan and you may find it easy to get an approval for your Personal Loan, even if you are carrying low Eligibility criteria.
You can include the purpose of availing a Personal Loan
While there’s no obligation of including the purpose of the Personal Loan, you may opt to include the purpose for the same, in order to boost your chances to get an approval for the Personal Loan. By merely mentioning all the reasons requirements, for which you are availing the Personal Loan, can help you in getting an approval for the Personal Loan. Mentioning the actual reason for the Personal Loan can help you in getting the Personal Loan easily. For example, if you mention, that you need the loan amount for the treatment or to cover wedding costs, are considered as a genuine case, and the banks may decide in sanctioning the loan amount.
Close down all smaller loans
Before you apply for the Personal Loans, if you are carrying any other smaller loans, try to close them. Your eligibility can drastically increase if you can close down your existing loans before applying for the larger personal loan. How does the closing down of all other existing loans impact on your Personal Loan application? In fact, the effect of the closing down of existing loans increases your take-home income, thereby leading to higher eligibility and chances of getting an approval for the higher loan amount.
Also, more are the existing loans on your name, the lesser is the repayment capability of the person is; the existing loans are indications of your need for more credit, thus bringing in more suspicion on your repayment capability, as chances of loans going default improves to a certain extent.
Don’t apply for too many Personal Loans at different banks
Applying for a Personal Loan at various banks at the same time, in fact, lower down your eligibility criteria. Thus, abide yourself by applying for the Personal Loan at various banks. It would be better if you analyze all the offers and schemes from different banks, and thereby chose the best offer and apply for the Personal Loan at the same bank. Never rush in for the numerous applications at different banks, and it would be better if you do your own research and apply to the best deal.
Declare all sources of income
While, the income proof is needed to be furnished to avail the Personal Loan, If you have different sources of income such as rentals and dividends drawn on investments, you can furnish all those information to the lending agencies and let the banker know it, which ultimately boost your eligibility for the Personal Loan. You can also include the details of any future bonuses (if any), to further boosts your repayment capability and can thus boost your eligibility criteria for getting the Personal Loan. Declaring al your sources of income will be a much beneficial step, you can take, in order to boost your Personal Loan eligibility.
Make sure you need the loan
As we all know that the personal loan carries a high rate of interest and have relatively shorter loan tenure, make sure that you are in real need of the personal loan. There are different kinds of loan available in the market, and getting one of them in completing the required task, can be beneficial in comparison to the getting a personal loan. The secured loans carry a much lower rate of interest and you can avail any one of them to accomplish your goals and demands. Thus, look towards various other loan types, before deciding on the Personal Loan.
At the same time, before opting for any loan type, at first decide; are you in serious need of the loan? Are the tasks, for which you need the Personal Loans avoidable? If you feel there are certain aspects, which can be avoided and are not urgent, it would be better if you avoid taking a Personal Loan. You must remember that every loan comes with a liability to pay and this payment of loan must be done without failure. You can also, check various other sources of the money, like your near ones, and your friends, who can lend you the money.
Opting for the Personal Loan binds you in EMIs and thus, analyze your future liabilities, your stability in income source and other aspects, before making a final decision on availing a Personal Loan.
Keywords: finance, insurance, loan
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