According to data published by RBI, credit outstanding for the personal loan segment escalated by 12.3% in February 2022, which was 9.6% in February 2021. The robust growth of this category can be ascribed to quick approval and flexibility. Moreover, the credit option does not have a collateral requirement and allows borrowers to access substantial loan amounts in less time.
However, lenders scrutinize several factors before passing a borrower’s personal loan application. Hence, borrowers must be mindful of the factors, ensuring they receive rapid disbursal with favourable terms and conditions.
Know The 5 Simple Tips to Improve Your Personal Loan Application
Borrowers must know the following tips to improve their eligibility and receive quick approval for personal loan applications:
1. Meet eligibility criteria
The first and foremost step that borrowers must take to improve their personal loan applications is adhering to the eligibility parameters set by lenders. Here are the eligibility criteria that one must meet:
- Individuals must be resident Indians.
- He or she must fall in the age bracket of 21 to 67 years.
- Applicants must have a steady source of income.
- One must have a CIBIL score of 750 or above.
2. Keep necessary documents handy
Right documentation is integral to a hassle-free loan approval process. The credit option is collateral-free, the documentation process is very simple, helping individuals in need of an urgent personal loan. However, besides adhering to the personal loan eligibility norms, borrowers will have to submit certain documents for getting a personal loan.
Here’s some:
- KYC papers
- Proof of address
- Employment certificate
- Income proof (Salary slips)
- Bank account statements
Borrowers may have to submit additional documents per the lender’s requirement.
3. Maintain a healthy credit score
As a personal loan is not secured against collateral, lenders scrutinise the borrower’s credit score before approving the loan application. The credit score reflects borrowers’ financial behaviour and credit worthiness. Hence, borrowers must strive to maintain a decent score of 750 and above to receive quick approval for loan amounts. Moreover, a higher credit score will help borrowers fetch lower interest rates. On the other hand, individuals who have subpar scores are considered high-risk borrowers, and lenders tend to reject their loan applications outright. Hence they must know the things to do to improve their personal credit score.
4. Bring down the debt-to-income ratio
Another effective way borrowers can improve their personal loan application is by clearing their credit card bills and existing debts, which will minimise their debt-to-income ratio. Moreover, several debts and credit card due amounts will pose an individual as credit keen, it will also put one’s repayment potential in question. Hence, one should pay off their current loan liability before applying for a new personal loan application. In this context, individuals must know simple ways to manage debt.
5. Mention additional income source
Lenders measure a borrower’s repayment capacity before approving the loan application. Hence, revealing additional income sources will position borrowers advantageously and help them improve their personal loan applications. Besides mentioning regular salary, borrowers must include additional income sources like part-time jobs, rental earnings, etc. It will assure lenders of borrowers’ potential to repay the loan principal on time.
Borrowers should also know the personal loan application process to receive the desired amount faster.
Know How to Apply for A Personal Loan
Here are the steps that will help individuals borrow money online:
Step 1: Visit the preferred lender’s official website and select personal loan from the product page.
Step 2: Select ‘Apply Online and get forwarded to the online application form.
Step 3: Provide personal, professional and employment details. Attach necessary documents,
Step 4: Enter the desired loan amount and submit the form.
On successful submission, a representative from the financial institution will contact and take the remaining application process ahead. However, individuals must know the mistakes to avoid while applying for a personal loan.
On getting approval, borrowers can use the loan amount to meet varied financial requirements. However, to make the most of the credit option, borrowers must know everything about the charges applicable on personal loan.
Moreover, borrowers can reap the benefits of the exclusive pre-approved offers extended by leading financial institutions like Bajaj Finserv. These offers available on various financial products like personal loans, business loans, credit cards, etc. expedite the personal loan application process. Intending borrowers can check the pre-approved offers by submitting their names and contact details.
To sum up, to make the personal loan application successful, borrowers must consider the aforementioned tips. It will then get quick approval and sail through the lending process easily.
