In today’s fast-paced world, where time is precious, instant loan apps have emerged as a solution for personal loans for salaried employees and self-employed individuals. These apps have witnessed a surge in usage, particularly among the tech-savvy generation in India.
According to recent credit bureau CRIF High Mark data, Indians are consuming more credit via personal loans. As per the Care Ratings, there is a rise in the share of unsecured personal loans with 140 bps from year-ago. The lending market in India stood at Rs.174.3 lakh crore in the financial year 2022, and the retail segment accounts for 48.9% of it. Youngsters have become the major driving force of credit growth in India. However, securing a personal loan can sometimes be challenging. Fortunately, we can familiarise customers with tips and tricks to boost their chances of getting a personal loan.
The approval rate for personal loans varies depending on the loan amount, credit score, the lender, etc. The following are the ways to improve eligibility and increase the chances of personal loan approval.
1. Reviewing Credit Report
Lenders decide on loan approval based on credit history in the credit report. Therefore, reviewing errors in the credit report is necessary before applying for a personal loan. Errors, like inaccurate digits, wrongly-spelt names, opened loan accounts even after complete repayment, etc., in the credit report impact the customer’s credit score negatively and reduce the chances of getting approved for a loan. Customers can ensure all the information is correct by reviewing the credit report.
2. Improve Credit Score
Identify areas for improvement in credit score, like paying off debt or making payments on time, increasing credit card limit, keeping the credit utilisation ratio low, etc., before making a loan application.
3. Choose The Right Lender
It is crucial to research well and compare various lending institutions. Look for lending institutions offering affordable personal loans. Customers should compare their rates, terms, and eligibility criteria before making a loan application. If customers know the eligibility requirements, choosing a lender with easy-to-meet eligibility criteria will be effortless.
4. Have A Stable Income
Lenders need to ensure that the borrower can repay the loan within the stipulated duration. Therefore, institutions prefer an applicant with a stable income. Lenders look at the customer’s earnings to see if the borrower can afford to make loan EMIs (Equated Monthly Income). Personal loans for salaried employees can be approved quicker than self-employed as they have a regular income. Using the Fullerton India Instaloan App, salaried employees can apply for a personal loan within a few clicks. An instant loan app can provide you with a loan as high as Rs.25 lakhs if you meet the loan eligibility.
5. Consider Applying for a Personal Loan With Collateral
Customers can pledge an asset as collateral to secure the loan. It is the solution if you do not meet the personal loan eligibility and there are high chances of loan rejection. Collateral reduces the lender’s risk and increases the borrower’s chances of personal loan approval.
6. Have a Co-Signer With Good Credit And Income
Consider a co-signer with a good credit history to boost your chances of personal loan approval. A co-signer is responsible for loan repayment if the borrower defaults.
7. Borrow What You Need
It is also important to borrow only the required amount you can realistically repay during the chosen loan repayment tenure. Taking a loan with a high amount may increase your chances of rejection.
8. Shorter Repayment Term
A shorter loan repayment tenure can reduce the personal loan interest rate, making it more affordable. It also indicates to the lender that a borrower is responsible and wants to pay off their debts as early as possible.
9. Avoid Applying For Multiple Loans
Do not make multiple applications simultaneously to obtain a personal loan. It damages a customer’s credit score and makes them appear desperate for money from the lender. It can decrease personal loan approval chances.
10. Consider Your Existing Lender
If an individual is an existing customer of a lending institution, there will be high odds of personal loan approval at favorable terms. In such cases, the lender is familiar with the borrower’s credit behaviour and is sure that they will repay the loan amount with timely EMIs.
In summary, these steps can help you improve your creditworthiness and make you a more attractive candidate to lending institutions. Improve odds of securing a personal loan at favorable terms and get an instant personal loan.