A personal loan refers to the unsecured loan that is extended by Financial Institutions. Personal loans do not carry the requirement of collateral being termed unsecured. This kind of loan is given to the applicants solely on their credit history and ability to repay the loans from their current personal income. In personal loans, the financial institution interest rates are not usually fixed but the interest rate charged differs from Financial Institutions to Financial Institutions. Moreover, as a rough guide, interest rates on a personal loan range from 11-37% per annum. Factor in the interest payments along with repayment of capital within the decided tenure to ascertain a good loan amount to ask for. This article will help you to know the various tips for Personal loan approval without any glitches.
Tips for Personal loan approval
The following are the smart tips which should be adopted if want Personal loan approval:
- Meet the Eligibility Criteria: No doubt in saying that Financial Institutions are not going to process your personal loan application if you do not meet their eligibility criteria. Often the applicants do not look at the eligibility criteria and apply even though they are not eligible for the loan. This becomes the reason for the rejection of the application. According to the rule of hand, you should check the eligibility criteria of every Financial Institution in which you are willing to apply and if you are to meet every single criterion then only apply. Generally, for applying for a loan, the minimum age is 21 years and the maximum age is 60 years. Make sure that you meet the eligibility demands in all aspects like documents, income certificates, tax returns, credit reports, etc.
- . Have a Good Credit Score: Credit score plays a vital role in Financial Institutions as it decides whether to approve loan application or not. It is calculated by the debt to credit ratio of the applicant. How is your punctuality in repaying the previous loans that you have taken? The more punctuality on the credit payments, the higher the credit score will be. This score ranges from 350-900 and above is considered pretty good. If your credit score is not good then it’s better for you to not send your application straight away but you may take steps to improve your credit score.
- Don’t Apply for a New Loan While Repaying a Previous One: Try to maintain a gap of at least 6 months between successive loans. Besides, do not apply for a personal loan when you have another loan in your name. The financial institutions will take this as an additional burden on your finances and mostly they may reject your application. The first and foremost thing that a Financial Institution sees is how feasible it is for you to repay their loan. This is done to lessen the risks for the Financial Institution.
- Be Reasonable When Deciding Your Loan Amount: Financial Institutions before deciding whether to approve your loan or not check your repayment ability. It refers to your current income to ascertain your repayment ability. If you ask for an outrageously high amount then it may have changes of rejection by the Financial Institution. Check it if you can repay the amount comfortably in the decided tenure then only ask for that amount.
- Don’t Send Out Multiple Loan Applications: Many people think that if they apply to multiple Financial Institutions then it may increase their chances of approval. Although, this is not compulsorily true. Rather it is the exact opposite. Only apply to one financial institution at a time because if there are multiple applications you have sent out. It looks after the chances of taking a loan from a particular Financial Institution are lesser. Therefore, limit your loan applications as much as possible.
Your loan application should be like that which should be marketing itself and for doing that you need to ensure you fill it out properly as per the expectations of the Financial Institution. You must be able to prove your repayment ability and have a good credit score. Apply patiently to Financial Institutions and needless to say,” Look for a deal with a low-interest rate.”
Hurry up! Get your Personal Loan approval and make your dream true. You can visit our website: Finbucket.com for additional details such as Personal loan interest rate, Rules of a Personal loan, Process of a Personal loan, or more. Our experts are available here at 8750008881 to provide you with the best advice related to a Business loan, Home loan, Life insurance, Health insurance, Invoice financing, Car insurance, etc.