Improve Your Personal Loan Eligibility with These Tips

A Personal loan is an unsecured loan that can be sanctioned instantly in a real quick time, provided by the financial institutions to meet individual needs such as weddings, travel, medical expenses, etc. Banks offer personal loans to both salaried and self- employed professionals between the age bracket of 21 and 60 years. The tenure of the personal loans can vary from 1 to 72 months. While every bank charges a different interest rate on personal loans, the minimum interest rate stands at 10.50 %. 

If you wish to fund your wedding or fall short of funds to meet personal needs, A personal loan can fulfil all your needs. So here are some tips which will turn aside from any setbacks and improve your personal loan eligibility:

1. Credit Score: The essential factor banks consider while giving a personal loan is Credit history. A CIBIL score of 750 or above is regarded as a good score to get a personal loan. 
2. Don’t default on loan EMI’s: To maintain a good credit score, you repay all the dues on time. There should be no pending dues if you want to keep a good repayment track record of paying the loans timely.
3. Use the credit card wisely: You should maintain a good credit utilization ratio, and to do that, you should not overutilize the credit cards for making payments. As banks monitor the ratio of payment done through credit cards to the total limits of the credit card, the credit card must be used wisely. Apart from that, you should clear all the dues of credit card dues on time.
4. Don’t apply for a loan too often: Applying for a loan too frequently indicates that the borrowers have poor spending behaviour. Banks thus assume that a borrower spends recklessly, which in turn affects the eligibility to avail the credit from them.
5. Include all the sources of income: To improve the loan eligibility, you should disclose all the sources of revenue. Including the additional sources of income can improve your debt-income ratio, which can ultimately give banks full assurance that you can repay the credit on time. An additional source of income, including any rental income, can be included along with the primary source of income. You can also add a co-applicant to improve your bracket of income level.
6. Choose the best marketplace: You need to choose an ideal institution that could lend your personal loans at attractive interest rates. You can use online marketplaces to make a comparison about the eligibility criteria and interest rates. These marketplaces can also help you to compare rates of different institutions and also aid in the approval and sanctioning of the loan. Along with that, online tools for checking the eligibility of a personal loan can also come handy before applying for a loan.

Do’s and Don’ts to be taken into consideration before choosing a personal loan:

• Don’t apply for higher loan values, which you may find it challenging to repay.
• Don’t apply for a single loan with different banks simultaneously.
• Don’t hide any relevant personal information required to take a loan.
• Furnish all the necessary documents to the banks.
• Compare rates of different banks to choose the best product for you.
• Avoid switching the job very frequently.