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Facing difficulty in getting a personal loan? Here are 9 Tips to Increase Your Chances

New Delhi: Financial institutions like banks provide loans to customers for various personal and business purposes. Personal loans are a very useful tool for customers to buffer financial emergencies like medical or future goals and dreams. They are in wide range like car loan, education loan, marriage etc.

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Since personal loans are collateral free, borrowers find it difficult to get these loans due to the strict procedure followed by banks. CIBIL score matters a lot in getting a personal loan. However, you can increase your chances by following a few steps.

Here are some ways through which you can increase your chances of getting loans from banks:-

1. Understand the lender’s eligibility criteria comprehensively

Before deciding about the lender, go through the prescribed eligibility criteria carefully. This includes age, income level, employment, and more. Use an online eligibility calculator to ensure that you can easily qualify for the loan and avoid rejection.

2. Take What You Can Afford

If you apply for a loan in excess of your ability to repay, your chances of getting a personal loan may be less. To determine an affordable loan amount that you can easily repay, take into account all your income streams and financial commitments. This will help reduce the chances of default and make loan payments more simple.

3. Maintain a Good Credit Score

Your credit score is a measure of your creditworthiness and is one of the major factors affecting personal loan approval. A credit score of 750 and above can increase your chances of getting approved for the loan. That said, if you have a low credit score, it is best to wait and improve your score by paying your EMI and credit card bills on time and maintaining a low credit utilization ratio.

4. Do not apply to multiple lenders at the same time

During a financial emergency, you may consider approaching multiple lenders in hopes of securing a loan. However, you should avoid it. Not only can lenders view this as a credit-dependent behavior, but too many applications can hurt your credit score. This is because each loan application leads to a hard inquiry on the credit report, which can lower your credit score over time.

5. Add a Co-Borrower

Most of the lenders will allow you to apply for a personal loan with your parent or spouse as a co-applicant. This is especially helpful if you are not able to meet the income criteria of the lender or your credit score is not up to the mark. If they have a high credit score and monthly income, adding them as a co-applicant will improve their chances of getting a personal loan at attractive interest rates.

6. Mention all your sources of income

Lenders want to know if you can make payments on time when applying for a loan. So be sure to include any additional income, including any rent, dividends, interest, or other sources. Not only will this increase your chances of getting the loan approved, but you can also qualify for a larger loan amount.

7. Opt for a longer repayment tenure

A longer loan tenure will split your EMI over time and allow you to make timely repayments without the risk of default. In this way, you can reduce your financial burden and increase your chances of loan approval.

8. Take a gap of few months between loan applications

The optimum time between loan applications is at least six months, as repeated loan applications can negatively affect your credit score. If you don’t have any pressing demands, wait some time for your credit score to increase; You will have more chances to be accepted.

9. Don’t give wrong information

For a simple and hassle-free application process, make sure to submit accurate information while filling out your personal loan application. Since incorrect information can affect your loan approval, double-check for any discrepancies or spelling errors. Additionally, have the necessary paperwork on hand before applying. To guarantee an easy and hassle-free loan approval process in a nutshell, keep these tips in mind.

(with inputs from ANI)

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Authorhttps://searchnews.in
Hello Friends, My Name is Raushan Kumar. I am a Part-Time Blogger and Student. I am author of https://searchnews.in . We're dedicated to providing you the best of News, with a focus on Business, Health, Lifestyle, World, Tech, India, Gadget.
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