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Ways To Improve Your Loan Eligibility

09.29.2020 · Posted in Loans Articles

A personal loan is one of India’s most common lending options. This loan is both unconditional and unsecured, making it very common with borrowers. Many lenders give out online and offline, personal loans that have simplified the loan application process. To provide a safety net for loan requests, lenders have placed in strong lending requirements.

When lending for a personal loan, there are several considerations a lender considers. If you do not have an excellent application, you should take a few precautions to ensure that your application is not refused outright. Each lender has personal eligibility requirements for loans that it clearly shows on their website. Those conditions for eligibility are set firmly. You will continue to work for some time to strengthen the requirements, and only apply for a loan as it improves.

The following are ways to improve eligibility:

  • Clear credit card debt: Your credit repayment history forms a significant part of your application for loans. Precisely why clearing all forms of debt by credit card is vital before applying for a loan. In your credit report, credit card debt indicates that having unpaid debt can hinder your loan application.
  • Apply only for what you require: Banks and financial institutions allow for loan amounts more than your requirement. While this is enticing, a pre-approval does not indicate acceptance of the loan. Your loan application can be denied if you apply for more than your requirement, and you do not explain the justification for the fund requirement. That’s why it’s best to analyse your fund specifications carefully, then apply only for the bank loan you need.
  • Verify your credit score: Your credit score is a very significant part of your application for a personal loan. Credit scores in India will range from 300 to 900, with the highest being 900. Any credit score over 750 is outstanding. Be sure to take a copy of the credit history report and check the authenticity of the transactions before applying for a personal loan.
  • Avoid having multiple credit cards: Lenders see having many credit cards as a person who is money hungry. Using credit cards alone, however, is not a justification to refuse loans. If several credit cards are maintained to collect cashback points or airline miles, it is best to ensure that your expenditure is fully repaid, and this is reflected in your credit report. A detailed credit report will boost eligibility for personal loans.
  • Come up with a guarantor: Providing a guarantor for your loan is one way of improving your loan application. If the guarantor has a sound financial record, it will provide the lender with extra protection. A significant point to note, though, is that if you skip repayments, then the credit score of the guarantor will be affected.

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