Taking a personal loan is a big step and involves a lot of planning. Why do you need it? How much do you need it? How will you pay it back? So many questions! Once you figure out everything, it stings if your application gets rejected. Are there ways that can give you easy personal loan approval online?
Well, there are! Here are 10 sure shot ways to get an easy approval on personal loan online:
Just because you get a credit limit of ₹2 lacs does not mean you will utilize all your credit. It is important to maintain the credit utilization ratio in order to not affect your credit score. And as we know your credit score is one of the important factors that affect your loan approval.
Always maintain your credit utilization ratio or else the lender will have an impression of you being a risky lender.
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A new job and applying for a personal loan? Bad idea!
Well, this is not entirely true! A new job will not affect your personal loan approval if your monthly source of income is good and stable. Stability in your job is important for a lender when he/she checks your credit profile. No lender would want to cater to the needs of a customer who seems to default a personal loan due to lack of income stability.
When determining whether or not you are an eligible for a personal loan, a lender gives a lot of importance to the employment type and the employer. For example, the chances of getting a fast loan approval for an applicant working in an MNC is higher than a person working in a not so established company.
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Aadhaar, Check. PAN, Check and…
Your documents help in verifying the details filled by you are correct. Therefore, to get a faster loan approval, it is important to keep all your documents handy. With the advancement in technology, the process of getting approvals have become easier but the documentation process is what takes a lot of time. Therefore, for faster disbursals, you must check if you have all your documents.
The documents required to get a personal loan are:
→ Identity & Age Proof
→ Completely filled personal loan application with photograph
→ PAN Card
→ Residence proof – Passport driving license, Voter ID, postpaid/landline bill, utility bills (electricity/water/gas)
→ Bank statements for the last 3 months(preferably your salary account)
→ Salary Slips of last 3 months
→ Form 16 or Income Tax Returns of last 3 years
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Too many cooks spoil the credit score!
What we actually mean is the fastest route to a personal loan approval is if you do not apply at too many institutions. When you apply at too many places, you are seeming to be loan hungry, which gives a negative impact on your credit profile. Moreover, every time a lender pulls your credit report, your score would take a hit which can bring it down significantly.
Since finding the perfect lender is next to impossible if you apply one at a time, you can instead apply at online lending portals which would help you compare different personal loan offers and find the perfect lender as per your credit profile.
We are pretty sure by now what a credit score means… if not, here is a small brief – a credit score is a numeric expression that helps the creditors assess the financial standing of a borrower. It ranges between 300 to 900 where 900 is considered a perfect score.
The credit score is the most important factor considered when approving a personal loan online. A credit score of 750 or above is considered excellent and can give you excellent personal loan offers at low-interest rates.
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Can you cut down your existing liabilities?
Another way of improving your chances of loan approval is if can limit your current liabilities. This will reduce your debt-to-income ratio which is one of the important factors for loan approval.
The debt-to-income ratio tells you how much you can borrow with your existing income. This measure gives the lender an idea of how much you currently pay as EMI’s and how much more can you afford.
Loans are of two types: secured and unsecured. A secured loan is a loan where a collateral is attached; for example, a home loan, a car loan, and more whereas a personal loan is an unsecured form of credit. A lender considers if you have a good credit mix of both secured and unsecured credit.
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It’s not you, it’s the loan reason…
Although a personal loan is multipurpose in nature, the reason to apply is another reason which can affect your approval. There are certain cases where the loan application can get rejected right away! Some of them are:
→ If you want the loan to gamble
→ If you are using the funds for any illegal purpose
It is best to check with your lender and see if the loan purpose you state is eligible or not.
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Sometimes, even the reason is not good enough… *enters collateral*
Sometimes, even the loan purpose is right and even then your application can get rejected. What do you do then? *Enters collateral!*
That’s right! Getting a loan can be easier and faster if you can keep a collateral. This can not just reduce the interest rates but get you faster approvals! A collateral could be any form of property, fixed deposits, gold or physically valuable thing. The best way would be to check with your lender and see if the security can be attached as a collateral or not.
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Slow and steady wins the race!
If you have applied for a personal loan in the recent time, do not think of applying it again and again in the near future. Take some time to let the effect to get reduced before you apply for a fresh personal loan. The ideal time to apply for a new loan is 6 months. As mentioned above, when you apply within a couple of days of your previous application, the lender might feel you are in dire need of funds. This will make you a risky lender and therefore get your loan application rejected.
Although the above reasons can increase your chances of loan approval significantly, one can never guarantee. Even if you meet all the eligibility criteria of a bank/NBFC, your application might still get rejected by the lender at its discretion. However, you can still try by keeping in mind of the tips given above and find a lender that best suits your needs.
