Face DIFFICULTY in getting personal loans? Here are 9 TIPS to increase the chances

Since personal loans are collateral free, the borrowers find themselves difficult in getting these loans because of strict process followed by banks. CIBIL score matters a lot in attaining them. However, you can increase your probability by following these 9 steps.

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New Delhi: Financial institutions like Banks provide loans to customers for various personal and commercial purposes. A personal loan is a very useful tool for customers to buffer financial emergency like medical or fufill goals and dreams. They are in wide range such as car loan, education loan, wedding etc.

Since personal loans are collateral free, the borrowers find themselves difficult in getting these loans because of strict process followed by banks. CIBIL score matters a lot in attaining the personal loans. However, you can increase your probability by following some steps. 

Here are some ways through which you can get increased the probability of getting loans from banks:-

1. Understand comprhensively the lender`s eligibility criteria

Before you decide on a lender, do go through the set eligibility criteria carefully. This includes age, income level, employment, and more. Use an online eligibility calculator to ensure you can easily qualify for the loan and avoid rejection.

2. Take what you can afford

You may have a reduced probability of getting a personal loan if you apply for a larger loan than you can afford to repay. In order to determine an affordable loan amount that you can easily repay, take into account all of your income streams and financial commitments. This will help reduce the likelihood of defaults and make loan payments considerably more simple.

3. Maintain a good credit score

Your credit score is a measure of your creditworthiness and one of the key factors impacting personal loan approval. A credit score of 750 and above can increase your chances of getting approved for the loan. That said, if you have a low credit score, it is best to wait and improve your score by paying your EMI and credit card bills on time and maintaining a low credit utilization ratio.

4. Don't apply at multiple lenders all at once 

During a financial emergency, you might consider approaching several lenders simultaneously in the hopes of securing a loan. However, you must avoid this. Lenders might not only view this as a credit-dependent behaviour, but too many applications can also harm your credit score. This is because every loan application leads to a hard enquiry on the credit report, which can reduce your credit score over time.

5. Add a co-borrower

Most lenders will allow you to apply for a personal loan with your parent or spouse as the co-applicant. This is especially helpful if you are not able to meet the lender`s income criteria or your credit score is not up to the mark. If they have a high credit score and monthly income, adding them as co-applicants will improve your chances of getting a personal loan at attractive interest rates.

6. Mention all your income sources 

Lenders want to know if you can make timely payments when you apply for a loan. So be sure to include any additional income you may have, including any rent, dividends, interest, or other sources. Not only will this increase your chances of getting a loan approved, but you could also qualify for a larger loan amount.

7. Choose for longer repayment time

A longer loan tenure will divide your EMIs over time and allow you to make timely repayments without the risk of default. This way, you can reduce your financial burden and boost your chances of loan approval.

8. Take a few months` gap between loan applications

The optimal time between loan applications is at least six months, as frequent loan applications might negatively impact your credit score. Wait a while to raise your credit score if you don't have any pressing demands; you'll have a higher chance of being accepted.

9. Don't give wrong information

For a simple and hassle-free application procedure, be sure to submit accurate information while filling out your personal loan application. As incorrect information might effect your loan acceptance, double check for any inconsistencies or spelling errors. Additionally, have the necessary paperwork on hand before applying. In summary To guarantee a smooth and trouble-free loan approval procedure, keep these suggestions in mind.

(With Inputs from ANI)