Whether it is an unexpected home renovation, an accident, or a medical need, emergencies can come at any time, and in any shape and size. What’s even worse is that if you aren’t prepared well, these emergencies can put a big dent in your pocket, and perhaps even leave you with irreparable financial damage.
It’s at such times that a personal loan can be of great help. The fact that it can get approved and disbursed very quickly, and can be used for any purpose, makes it a highly sought-after product in the lending marketplace. However, you must meet certain personal loan eligibility criteria set by the lender to successfully avail of this facility.
In the event that a lender has sanctioned a lower personal loan amount than what you need, you can refer to the following golden tips that can help you increase your personal loan eligibility.
Maintain a Healthy Credit Score
When it comes to personal loan eligibility check, lenders give very heavy weightage to credit score, as it reflects the borrower’s past credit behaviour. Having a 750 or above credit score indicates responsible financial behavior. It can be accomplished through certain good practices including repaying your dues on time.
A good credit score minimizes the lender’s risk and improves the chances of personal loan approval. A credit score below 750 indicates substandard repayment history, making the lender consider you a high-risk case. As a result, even if they offer you a personal loan, it would be at a higher interest rate.
Clear Credit Card Bills and Existing Loans
Clearing any already running loans and paying off your credit card bills will help you improve your debt-to-income ratio, and the likelihood of successfully availing a personal loan. Having multiple credit cards and outstanding loans might give the lender an impression that you may not be able to service so many debts simultaneously.
15% is considered the ideal debt-to-income ratio if you are servicing only one loan product at the time of personal loan application. On the whole, if you are repaying multiple loans, the total EMI amount shouldn’t be more than 50% of your take-home income each month.
Factor in all the Income Sources
Lending establishments give a lot of importance to monthly income while figuring your eligibility for a personal loan. Therefore, it’s important for you to include all your income sources, and not just your monthly salary while applying for the loan. Doing so will help you prove your repayment capacity to the lender.
Avoid Simultaneous Application of Multiple Loans
Whenever you submit a personal loan application, the lender makes a hard inquiry with the credit bureau for your credit details. They basically access your credit report, in order to assess your risk profile. Therefore, simultaneously applying for multiple loans can lead to multiple inquiries, making you look like a credit hungry person, and increasing the risk associated with you. Hence, you should avoid doing that.
Apply For a Personal Loan with a Lender Whose Eligibility Criteria is not Complicated
Last but not the least, it’s very important to apply with the lender whose personal loan eligibility criteria is not too complicated. For instance, reputed banks and NBFCs are normally forthcoming in offering personal loans to both salaried and self-employed individuals in the age bracket of 23 to 55 years.
You should be able to show proof of regular income in the city you claim to reside in. If you meet the personal loan eligibility criteria, you should also be able to back it with documents, both in person as well as online, to complete the process.
GoSahi.com is a reputed and trustworthy portal where you can compare personal loan offers from all big names in the Indian lending industry. It gives you the flexibility to go through the best offers from multiple lenders, on one single platform.
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