Getting a personal loan has become even easier with rapid digitalisation. Almost all leading financial institutions of the country now offer this credit online so that individuals can mitigate their short-term, financial emergencies promptly. As per a recent report,
- The small-ticket personal loan disbursal grew by 60% as of March 2020.
- In terms of volume, it reached Rs.12000 crore as of August 2020.
Therefore, it makes a perfect time for borrowers to opt for a fast personal loan. However, just like the conventional mode of borrowing, individuals need to fulfil specific eligibility criteria for this credit.
Tips to improve online personal loan approval chances
Individuals can follow the below-mentioned tips to improve the chances of their loan approval.
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Meet eligibility
Every lender sets eligibility that borrowers need to fulfil to get the funds. Therefore, if you check the eligibility beforehand, it will allow you to ascertain the loan amount that you need. Following are some of the common requisites that you need to fulfil.
- You must be a citizen of India.
- Your age should be between 23 and 55 years.
- You must have a steady source of income.
Besides, individuals also need to fulfil lender-specific criteria to be eligible for this fund.
2. Maintain a good credit score of 750 and above
Most lenders check the CIBIL score and credit history of a loan applicant. Since this score indicates borrowers’ creditworthiness, it helps financial institutions gauge risk profile before sanctioning a personal loan.
Generally, a score between 750 and 800 is considered enough to get online personal loan. However, individuals with a low credit score can follow some simple tips and tricks to make it to the required one.
- Lower the credit utilisation ratio below 40%.
- Clear the existing debts.
- Maintain a perfect mix of secured and unsecured credit in your portfolio.
Along with that, you can also use a personal loan for debt consolidation.
3. Keep FOIR below 50%
Fixed Obligation to Income Ratio denotes the amount that one needs to spend from his/her income. When individuals have multiple obligations, a substantial amount goes towards repaying the same. With multiple open debts, an individual may face personal loan application rejection. Thus, it is better to repay existing dues before availing of fresh unsecured credit.
Ritu enjoys a monthly net income of Rs.70000, and her fixed monthly expenditure is Rs.30000. The EMI of the applied online personal loan is estimated to be Rs.15,000. In this case, Ritu’s FOIR would be = (30,000+15,000)/70,000*100= 64.2857%
More likely, in this situation, a lender will reject Ritu’s loan application. Since FOIR includes the EMI of the applied credit, individuals need to calculate personal loan EMIs to get an idea of their additional liabilities.
4. Keep necessary documents handy
Documentation is an integral part of loan eligibility. Hence, individuals need to know the documents required for personal loan. It includes.
- ID proof
- Address proof
- Proof of income
- Bank account details of the salary account for the last 3 months.
- Tax documents of at least one year.
NBFC like Bajaj Finserv offers an online personal loan for salaried of up to Rs.25 lakh with minimal documentation and eligibility.
They also extend pre-approved offers that expedite the credit availing process by making it hassle-free. Such offers are available on a range of financial products like business loans, personal loans, credit cards and several others. You can check your pre-approved offer by providing your name and contact number.
5. Avoid multiple credit applications
Often individuals tend to forget that frequent credit enquiry also affects the creditworthiness of an aspiring borrower. Hence, it will be wiser to limit the inquiry to the minimum before applying for the fund.
Additionally, individuals should also know about the essential personal loan charges they should keep in mind while applying for the credit. It would help them facilitate repayment without any delay.
