If you are looking for a reliable and convenient loan option, a personal loan may just be the right choice for you. However, getting approval for a personal loan can be a challenging job. Nonetheless, there are certain ways to increase your chances of getting approval for your loan.
10 tips to boost your chances for a personal loan
1. Check the lender’s eligibility criteria
Before you apply for personal loan, select a lender and ensure that you scan through all their requirements. Doing this will help you avoid the mishap of rejection for trivial reasons like age or income and will help you to find a perfect personal loan interest rate.
2. Track your fixed-obligation-to-income ratio (FOIR)
Using a high percentage of your income to repay your existing debts results in reducing your creditworthiness. That could lower your chances of getting approval for a loan or worse, the lenders may even charge you a high personal loan interest rate to cover up for the added risk.
3. Apply for the right loan amount
Before you head to apply for personal loan, use a personal loan eligibility calculator to check the ongoing personal loan interest rate on the amount and find the right loan amount based on the factors like income, current liabilities, and other. This will help you to fasten your approval for a personal loan.
4. Avoid applying for too many loans at the same time
When a borrower needs emergency funds, they may end up applying for a loan from multiple lenders to increase their chances of getting their loan approved. This can work against you as lenders may view it as a sign of desperation.
5. Improve your credit score
Lenders pay a lot of attention to your credit score while scanning your loan application. So, if you have a poor credit score and need to apply for personal loan, take steps to improve your credit score before you apply.
6. Add your spouse or parents as co-borrowers
In most cases, there is a choice to include your spouse or parent as a co-applicant to apply for personal loan. If your co-applicant’s income and credit score are high, then including them will up your chances of getting a loan at a lower personal loan interest rate as it will add to your repayment capabilities, fetching you a personal loan at a lower interest rate.
7. Choose your lender carefully
Before settling for a lender, do thorough research on all the available options in the market. This will help you find the best lender to apply for personal loan who can offer you the best interest rate.
8. Mention all your income sources
When you apply for personal loan, make sure to mention all your income sources. This will help you not just get a loan sanctioned but also be eligible for a higher loan amount.
9. Opt for a longer loan tenure
Choosing a longer loan tenure can be helpful by breaking down your EMIs into smaller installments with low personal loan interest rates and will reduce the financial burden of making timely repayments.
10. Enquire about Loan Prepayment
Mostly, loans are allowed prepayment but it is a smart move to enquire about the prepay loan amount for the longer tenure. There can be few charges to opt for the prepayment of a loan, but doing so will save you from the high personal loan interest rate that you will otherwise have to bear.
You should apply for personal loan. It can be a great option if you are looking for a reliable and convenient loan. Although getting approval can be challenging, there are ways to increase your chances of being approved. You can greatly increase your chances of being approved for an adequate personal loan interest rate.