7 Ways To Increase Your Chances Of Getting A Personal Loan

Personal loans can be helpful in times of financial emergencies. They are unsecured types of loans which do not require collateral. As a result, you can meet a host of planned and unplanned monetary requirements.

The entire process is simple and uncomplicated. You only need to qualify certain requirements. With an online application process, you can complete the process from the comfort of your home.

Having said that, to make this process hassle-free, you need to keep a few pointers in mind.

7 Tips To Better Your Chances Of Securing A Personal Loan

Here are some tips to increase your chances of getting a personal loan:

1. Keep your credit score high

Your credit score will determine your creditworthiness as a borrower. Although a credit score of at least 750 might help speed up the approval process for a personal loan, a credit score of at least 700 is generally regarded as good.

If you have a high credit score, lenders will view you as a low-risk borrower because there is less chance that you will miss payments on future loans. This improves your chances of getting approval. It also results in a lesser processing charge and a better personal loan ROI.

2. Keep your finances in order

Financial institutions will consider lending to you if you keep an excellent balance since it demonstrates that you can repay the loan. Now, you can better your chances and speed up the process by improving your income.

In this regard, you need to add your income from other sources like interest, different investments, rent from properties, etc. Together they will sort your finances if it is not up to the mark and amplify your chances of getting a loan without any hassle.

3. Add co-borrowers

Adding a co-borrower is an excellent way to increase your chances of securing a personal loan without delays. Doing so will improve eligibility, as the lender will count both borrowers’ income and credit profile while judging the loan application. Moreover, it will also increase the repayment capacity, which is always beneficial.

4. Apply to one lender only

Sending loan applications to multiple lenders may project you as a greedy borrower or someone with messy financial conditions. 

In a situation like this, your chances of getting credit are low. Furthermore, submitting multiple loan applications could lead to multiple rejections, damaging your credit score in the process. 

5. Keep every paper ready

Double-check that you have all the necessary paperwork when requesting. Lenders do not often want a lot of documentation because the loan is unsecured. The list of needed papers is available on the lender’s official website, or you may ask their representative. Having all the documentation ready helps save your loan processing time.

Typically, the following papers are required by lenders:

• Identification proof: a passport, PAN card, Aadhar card, voter ID card, driving licence, etc.
  
• Address verification documents: Aadhar Card, voter ID, passport, utility bills, rent agreement, etc.
  
• Evidence of Income

For salaried candidates: Pay slips and Form 16

For self-employed candidates: Current income tax return (ITR) and business profit and loss statement.

• Business proof and employment proof

 6. Provide true details

Remember that the information you provide and the documents you submit must not have any mismatch in details. Otherwise, your loan application will be stuck in the verification process and may lead to rejection too.

7. Choose the lender carefully

Last but not least, choosing your lender carefully is essential to have a good borrowing experience. Now, this is not directly related to enhancing your prospect of securing a loan, but the right lender will not delay the process. Moreover, reputed financial institutions have a transparent process, and you will know quickly whether you are eligible or not.

So, it is vital to select a reputed lender with no history of malpractice.

Conclusion

Best Way to get a personal loan has never been easier, and the introduction of technology has changed the process dramatically. However, the loan approval process still entails meeting a lender’s requirements, which can be daunting at the time.

Having said that, keeping the pointers mentioned above in mind will help you to improve your chances of securing a loan without any hassle.