Things to check before Submitting your application for a Personal Loan

Posted by Rupee Redee on January 17th, 2020

Different types of loans and credit facilities are provided by many banks and financial institutions. For example, a house loan to buy a house, education loan to pay the college or university fees, and so on.

A personal loan is a type of loan provided by such finance lenders to the people who need urgent funds to meet some personal requirements. These requirements might range anywhere from spending on a wedding, traveling expenses and so on.

The easiest part of obtaining a personal loan is that it is unsecured; therefore, no form of security needs to be produced by the borrower in order to get the loan approved. Many instant loan apps in India just require the individual to register and fill in the necessary information to obtain a loan.

However, the case might not be the same everywhere. Certain tips and tricks can be applied while filing a personal loan application at various banks and commercial lending companies to get the loan approved in one go. They are described as follows :

• Fulfill the eligibility criteria - Almost all banks across our country have definite eligibility criteria of being at least 21 years old at the time of loan application. This ensures the lender that the person applying for the loan is mature enough and is capable of repayment of the borrowed amount. Apart from that, you must have a stable source of income that can be utilized to repay the obtained loan. 

• Select the loan amount appropriately - The rate of interest on personal loans is generally quite high. This can result in an extremely high sum of interest along with the principal amount. The burden of interest can increase over time if the loan amount is more; therefore, it is very important that you do not apply for a particular loan amount which is unnecessarily high. It should be calculated according to the exact requirement and interest rates must be taken into consideration before filing the application.

• Do not send multiple applications - One negative remark can lead to rejection of your loan. As per many banks and finance companies, this remark turned out to be multiple applications. Being under the impression that sending in many applications increases the chance of loan approval, people often tend to do the same. But in reality, the case is completely opposite. Sending just one application leaves a professional impression and does not overwhelm the lenders.

• Repay other debts first - It is not advised to have the burden of repaying more than one loan at a given point of time. This same fact applies to a personal loan. If you already have a loan waiting to be repaid, you must ensure that you apply for a personal loan only after making full payment of each and every installment. Multiple debts or loans do not suggest a strong debt and credit balance which might be the reason for loan rejection. It is advisable to not borrow any amount of money until six months after the repayment of a previous loan.

• Build a good credit score - In order to obtain the loan, you must have a strong credit background. Building a good credit score is all about paying all your credits timely and maintaining a healthy debt to credit ratio. If an individual has a strong credit history of regular bill payments, his loan is more likely to be approved. This ensures efficiency in loan repayment, which is amongst the topmost priorities of the lender.

If you are looking forward to applying for a personal loan online or at any bank, you can surely use those tips so that your loan is passed without any hassle.