A Personal Loan is a go-to option when you are in need of funds urgently. As this is an unsecured loan, it does not require any collateral. So no matter what the reason is, you can apply for a personal loan and avail it instantly. Nowadays, many banks and NBFCs provide personal loans online. This has made the process to avail a loan, a simple one. You can avail an instant personal loan or a short-term personal loan through an online application. The number of steps involved in an online application is less as compared to an offline application. Yet there are chances that your loan might get rejected. A rejection stings and also makes your credit report look bad. Not to mention that your financial needs will not be met.
Here we give you some tips to get your personal loan approved.
1. Check If You Meet the Eligibility Criteria
Every bank or any other financial institution that gives loans will have eligibility criteria for applicants. It involves a lot of things such as age, documents, income details, tax returns, credit reports, etc. Your minimum age should be 21 years old while you are applying for a loan and it should ideally be under 60 years old when the loan tenure ends.
2. Aim for an Impressive Credit Score
The normal range of a credit score is from 300 to 900. If your credit score is more than 750, banks and NBFCs will consider you a credible applicant who can repay the loan on time. A score of 750 or more is usually considered a good credit score.
3. Clear All the Outstanding Debts
If you already have many loans to pay for, then you should avoid going for a new loan. Even though you have the capability to pay for a new loan, the lenders would think otherwise. There should be a gap of at least 6 months between your old and new loan.
4. Do Not Apply For More than Needed
Avail the loan for an amount which is needed. You cannot add any extra sum to it to use the extra money for something else. Financial institutions check your income and then relate it to your proposed loan amount. If there is a huge gap, then it is possible that your loan will be rejected.
5. No Faulty Documents
Even though personal loans require minimal documentation these days, there are still some important documents which you need to submit with your application. Banks or NBFCs usually ask for your identity proof, income proof, residence documents, and bank details. You need to keep your documents ready before applying. Many times loans get rejected due to incorrect documents. You can check the website to see what all documents are required for the application.
6. Choose the Right Lender
As there is an eligibility criterion involved, you need to do a thorough research regarding which lender’s eligibility criteria you match completely. Look for lenders who provide personal loans, short-term personal loans and have good reviews.
Your loan application should be perfect to the tee. It is a make or break situation and if it is a case of emergency, then it is of paramount importance that your loan gets approved. Follow the above 6 tips and increase the chances of your loan approval.