Are you bogged down with piled-up medical bills? Do you need immediate funds to renovate your home? Are you getting married but falling short on cash? If you are losing your night’s sleepover financial issues, apply for personal loan, a perfect source of emergency funds. However, it is important that personal loan is approved soon and disbursed fast so that you can fulfill your small dreams at the nick of time. Here are some ready tips for you to get easily approved for home loan with no or minimal rejections.
Maintaining a high credit score
All financial institutions check your credit score to determine if you can repay a loan fully. Prepared by credit rating agencies, the credit score is a summary of your overall credit history. Although a score above 700 is considered good enough to apply for personal loan, the higher the score, the better are the chances of approval. Try keeping the score above 750 to ensure smooth approval.
However, to err is human. Credit rating agencies indeed calculate credit scores, but human employees work on them. There stands a chance that your apparently low credit score is the result of a wrong calculation or backdated information about your credit history. You must stay aware of your current score and update lenders on your improved credibility. Thus, you can avoid the undesirable situation of an incorrect credit score affecting your chances of getting approved for personal loan.
Selecting your lender wisely
Involving too many cooks would only spoil the broth and waste time. A deep search into your credit records can enable lenders to track down the number of places where you have applied for a personal loan. If you apply for personal loan atattoo many financial institutions, may detect your desperateness for a personal loan and suspect your credibility. Research well and choose the right lender for you. Numerous websites would help you compare the benefits of the personal loans offered by multiple financial institutions in the market. If you have an existing relationship with a financial institution, try looking for personal loan offers to avail better rates and more benefits. You are also advised not to submit more than one personal loan application with the selected lender. Multiple applications may trigger rejection.
Disclosing all sources of income
When you apply for personal loan, lenders weigh the chances of default and the risks associated with approving the application. In short, they try gauging if you make enough money to pull off a timely repayment. A single source of income may not be sufficient for you to be approved for personal loan. Show all sources of income to enable faster approval.
Financial institutions consider hefty loan amounts risky. If you want to apply for personal loan, it is an excellent option to aim for a reasonably low amount. Applications for high loan amounts often indicate chances of default. Financial institutions can comfortably grant you a personal loan if you aim low. Applying for low loan amounts would make you appear a low-risk borrower to lenders. You are also advised not to apply for personal loan to repay another loan since this would adversely affect your credibility and in turn, your credit score.
Maintaining a reasonably good bank balance
Financial institutions are relieved to find that you maintain a consistent balance. A sound balance implies that you have no imminent chances of default, can pay EMIs, and repay the entire loan amount on time. Such a move would help you earn your lender’s confidence and expedite the loan approval.
Maintaining a low EMI-to-Income ratio
Aim at a low EMI-to-Income (Debt-to-income) ratio. A ratio below 45% makes financial institutions suspect your creditworthiness and ability to repay a personal loan. A low ratio may result in delayed approval or, in the worst scenario, a rejected application. Many websites offer free, online calculators where you can estimate your EMI-to-Income ratio.
Applying online for faster approval
If you apply for personal loan online, you save a lot of time because you do not have the onus of visiting the lender’s branch or office. Nowadays, most financial institutions offer the option of online loan applications and promise a faster verification process and approval.
For seeing additional documentation
It is a good initiative to anticipate your lender’s additional documentation requirements. While scrutinizing and deciding on your loan application, your lender may require additional or supportive documents. For example, financial institutions may need to see your current credit card statement, if any, along with salary slips (income proof). Or they may require another photograph if the photograph on your loan application form gets misplaced. You need to foresee such requirements and provide the same in advance. Such a step would help you avoid unforeseen follow-ups and subsequent delay in a loan approval.
Availing pre-approved offers
Available-approved personal loans from financial institutions since such offers reduce the turnaround time by several hours. Wait till the hassle-free verification process gets completed before the application is approved and the sanctioned amount is credited to your account. If you need to apply for personal loan, grab pre-approved offers to reap the benefits of a speedy verification process, which ensures faster approval.
Revisiting your decision
Rethink before signing the loan agreement. If you have applied for a personal loan already, it is because you have liked the offer on your plate. Do not bargain or search for better offers to avoid delayed approval.
Personal loan approval is a two-pronged story. Fast approval and hassle-free disbursement depend not only on the lender but the applicant as well. Follow the above tips to apply for personal loan if you want a prompt disbursement and want to heave out a sigh of relief.