Personal loans are some of the leading credit products amongst the working class. With a simple and easy application process, zero collaterals, and quick disbursal, it is one of the most popular means of financing available today. However, to qualify for a personal loan, the lender’s eligibility conditions should be adhered to. To ensure loan approval with favorable terms and conditions, the following steps are recommended to boost your chances of eligibility for a personal loan.
IMPROVING AND MAINTAINING CREDIT SCORE The credit score is measured by the ability to repay a loan. The higher the score is, the better are your chances of getting a personal loan sanctioned in your name. Poor credit scores often cause a hindrance if the criteria are not met, making it harder to meet the terms and conditions of the lender. A credit score of 800 or above projects you as a responsible buyer. A score less than 800 signifies you as a high-risk borrower thus making you ineligible.
- REFRAIN FROM APPLYING FOR MULTIPLE LOANS
To get approved by at least one, multiple loan applications to lenders should be avoided. When applying for a loan, lenders raise an inquiry in the credit bureau to determine the risks of default. These inquiries are hard inquiries aimed at decreasing your credit score. It also makes you a credit-hungry and high-risk applicant thus rejecting your requests for finance.
- ALL ACCOUNTS OF INCOME SHOULD BE INCLUDED:
The repayment capacity is determined by checking your sources of income. What this signifies is, that when applying for a personal loan all existing sources of income, irrespective of any kind, should be included in the details to determine your ability to repay it. This helps in proving to the lender that you have the necessary sources for timely repayment.
- FIND A LENDER WHOSE ELIGIBILITY CRITERIA CAN BE MET BY YOU:
It is imperative to compare loans before choosing lenders. Find out about the eligibility conditions of different lenders and zero in on one that suits your criterion the best.
For instance, Everydayloanindia offers the following eligibility conditions that are simple to follow:
- You must be older than 18 years
- You should be a salaried individual
- You should have a PAN allotted by the Income Tax Department of India
- CHOOSE YOUR LENDER CAUTIOUSLY:
It is important to compare loans before zeroing in on a lender. Even if you opt for a lender that specializes in high-risk borrowers due to poor credit scores, you need to be extra careful. You should avoid payday and title loans at any cost. These are designed in such a way, that they keep you in permanent debt with their outrageously high fees.
- AVOID APPLYING FOR MULTIPLE LOANS
When applying for a personal loan, lenders raise an inquiry with the credit bureau to access the default risk. Such inquiries are considered hard inquiries and are listed on your credit report. Hence, making multiple loan applications at the same time can make you seem credit-hungry. This makes an individual a high-risk applicant, which is why it is best to evaluate options, using a loan eligibility calculator to apply for a loan that suits you best
By fulfilling these conditions, you just have to get your essential documents verified to complete the loan sanctioning process.