Whenever there is a huge need for money, then personal loan comes as a better option.
Personal Loan: Whenever there is a huge need for money, then personal loan comes as a better option. This loan is available immediately and it requires minimal documentation and there is no restriction on how to use the money from the loan. Due to all these reasons the popularity of personal loans remains. However, because of its unsafe nature, the lenders are very careful in approving its application. If your other important things like your credit profile are kept in mind, then your personal loan application will not be rejected. Here five important checkpoints are being given, which will increase the chances of approval of personal loan application.
Important checkpoints for personal loans
Review your credit profile: Most lenders first look at the credit profile of the personal loan applicant. A credit score of 750 or more is generally considered better. In such a case, the applicant should maintain a better credit score. Timely payment of EMI and credit card bills, credit utilization of less than 30 percent, maintenance of healthy credit mix, such as credit score is better.
A credit score is based on information provided by lenders and card issuers, and sometimes a worker mistake may negatively impact your credit score. In such a situation, keep looking at your credit report from time to time and if there is any mistake, then ask the credit bureaus and lenders to rectify it.
Choose tenure based on your repair capacity: Lenders evaluate the repair capacity while approving loan applications. For this, loan repayment liability is seen. Lenders recommend loan applications whose loan repayment obligations do not exceed 50%. Lenders in excess of this are expected to default and the personal loan application may get rejected. In such a situation, to repay the loan, choose a tenure whose EMI is within the repayment obligations limit.
Choose the best among several loan offers: Personal loan interest rates can be 9-4% per annum. In such a situation, while taking a personal loan, compare the interest rates offered by more and more lenders. For this, banks and NBFCs can be contacted. While comparing, not only look at the interest rate, but also take into consideration the processing fees, loan amount, repair tenure, preparation charges etc.
Do not apply for loan with many lenders: When you apply for a loan or credit card, the lender checks your credit profile through your credit report from the credit bureau. Every time you apply, it gets added to the credit report and it affects your credit score. In short time interval, many credit inquiries can make your image of a person taking more loans and personal loan application may get rejected. In such a situation, avoid the mistake of putting more loan applications.
Do not change jobs repeatedly: Many people change their job profiles constantly. Lenders consider it a sign of instability in career. There is a problem in getting loans to such people who keep changing their jobs. If you are planning to take a personal loan in the near future, then do not keep the habit of changing the job urgently.
(By Gaurav Aggarwal, Director-Unsecured Loans, Paisabazaar.com)