May 27, 2021Personal Loan
One of the most attractive features of a personal loan that makes it unique is, there is no end-usage restriction placed by the lender on the borrower. Therefore, it provides much-needed flexibility to the borrower and makes it a suitable option for meeting various financial obligations, including meeting emergency expenses.
However, being an unsecured loan type, you need to tick multiple boxes to increase personal loan eligibility.
Here are some of the ways through which you can increase personal loan eligibility:
A credit score is a three-digit number, which indicates your credit behaviour and creditworthiness. A higher score means, the likelihood of default is lower and you will repay your future obligation without any issues.
Lenders prefer borrowers with a CIBIL (credit score) above 750 and it improves your chances of loan approval with a low-interest rate.
Therefore, before applying for a personal loan, check your credit score and if lower than the lender’s requirement then take steps to improve your credit score like by paying off existing debt, paying bills on time, etc.
The debt-to-income ratio defines the percentage of income that goes towards debt/loan repayment. Ideally, it should be lower than 40% to apply for a new personal loan.
A borrower with a higher percentage of income utilized for debt repayment signals you have too much debt for the income you have and will be unable to take on any new obligations.
Therefore, you need to keep the debt-to-income ratio lower and don’t borrow unnecessarily as it may impact your credit score, if you fail to repay.
Going for a multiple loan application with different lenders at a time in the hope that at least one will get approved is the wrong strategy.
It makes it more difficult for you to get a loan, as multiple hard inquiries on your credit report at a time reduce your credit score and gives a negative impression to the lender that you need more than one loan to meet your financial obligations.
Maintaining a gap of at least six months between two loan applications is the best practice to follow and increases the likelihood of getting your personal loan application approved.
If you are falling short of meeting the lender’s prescribed eligibility criteria or are unable to get the loan amount you need, you can consider adding a co-applicant to increase personal loan eligibility.
Adding a co-applicant helps to reduce the credit risk and is equally liable for the timely repayment of the loan. It also helps to avail a personal higher loan amount.
Loans with longer repayment tenure helps to facilitate borrowers in timely repayment as the EMI amount is smaller, thereby reducing the risk of default.
To determine the right EMI amount, you can use the personal loan EMI calculator, which helps to calculate the EMI amount under different repayment tenure.
A borrower needs to meet all the eligibility criteria as prescribed by the lender, as it will significantly increase the chances of approval of your personal loan application.
Compared to other categories of loan, a personal loan has relaxed eligibility criteria norms and an easier loan approval process. The personal loan eligibility criteria at Fullerton India include:
You can also use the personal loan eligibility calculator, which calculates the maximum amount you can borrow based on different factors.
While availing of a personal loan, documentation is the key factor for faster loan approval and disbursal of the loan amount. The personal loan documents include:
As mentioned earlier, you need to tick multiple boxes for your lender to quickly approve your personal loan application and that too with favourable terms.
Also, after approval, follow the best practices and steps to keep your credit profile clean and maintain creditworthiness.
Therefore, apply for a personal loan online, and simultaneously check your eligibility and get all the information regarding the loan hands-on. Compared to offline, it is simple, fast and offers superior convenience to users.