Easy ways to boost your personal loan eligibility
Emergencies befall without a disclaimer for preparation. They can present themselves as an accident, sudden medical ailment, or even unexpected home repairs. A personal loan can be helpful to tackle any unforeseen expenses without hurting your financial health. Owing to prompt approvals and instant disbursals, personal loans are quite popular today. However, it is essential to meet the eligibility criteria for your application to be approved.
You can use an online tool, the personal loan calculator, to check your eligibility. It gives you an approximate idea of the amount you are entitled to obtain as a loan. In case the sum the lender agrees to sanction is lower than your requirement, you can boost your personal loan eligibility by making use of the following suggestions:
Work on your credit score and maintain a high one
The most crucial eligibility criterion for a loan is your credit score. It is a window into your past credit performance. A good score of 750 or more projects you as a responsible borrower who repays dues on time. Try to improve your credit score by paying all your credit bills and EMIs on time, repaying existing debts in entirety, and refraining from availing the maximum credit limit available to you.
Repay your credit card bills and existing loans
You must increase your debt-to-income ratio by reducing your existing outstanding debts before you apply for a personal loan. The consolidated EMIs from all your loans must not be over 50% of your income. Your debt-to-income ratio can be calculated by dividing your monthly debt by your gross monthly income. Maintain a low ratio as far as possible.
Disclose all income sources while applying for a loan
A vital personal loan eligibility criterion is your income. It enables lenders to assess whether you can repay a loan. Therefore, if you have any additional sources of income apart from your salary, remember to disclose them so that the lender knows you have the essential resources to repay a loan.
Do not apply for multiple loans at the same time
Lenders appraise your default risk through inquiries into a credit bureau at the time you apply for a loan. Your credit report displays these inquiries. Multiple requests for loans reflect negatively on you as a credit hungry candidate and resultantly, a high-risk applicant. This may result in a denial for financing.
Find a lender with relaxed criteria for loan eligibility and least interest rates
Compare offers and personal loan interest rates from different lenders before approaching one for finance. Some lenders may entice you with offers tailored for high-risk borrowers. Avoid such payday and title loans as these can have considerably high fees.
Remember to research thoroughly before you apply for personal loan, so you meet the eligibility and get a good deal.
If you are looking for a personal loan, you can check out Tata Capital personal loans that start at an interest rate of 10.99% for loans between Rs. 75,000 and Rs. 25,00,000.