Top 5 tips to improve Personal Loan eligibility
3 min read
Apr 26, 2024
Obtaining a Personal Loan can be a swift way to manage urgent financial needs — be it a wedding, a medical emergency, or the acquisition of assets. However, different lenders have varied interest rates and Personal Loan eligibility criteria. Understanding and improving these criteria is essential for any borrower. Here are some actionable tips to improve Personal Loan eligibility and ensure your application stands out.
Understand the role of your credit score
Your credit or CIBIL score is a pivotal factor in determining Personal Loan approval.
A score of 750 or above signifies you are a reliable borrower. Maintaining a strong credit score not only increases your chances of approval but also affects the interest rates offered to you. Conversely, a score below 750 may label you as a high-risk applicant, potentially leading to higher rates or application rejection.
Manage your debt efficiently
Before applying for a new loan, clearing your existing debts is crucial. This improves your debt-to-income ratio — a key metric lenders evaluate to assess your repayment capability. Ideally, your total EMIs should not exceed 40% of your monthly income. For instance, with a monthly income of ₹50,000, keep your EMI commitments below ₹20,000.
Be strategic about your loan applications
When you're in the market for a Personal Loan, it's wise to be selective about where you apply. Casting a wide net with numerous applications might seem like it increases your odds, but it can do more harm than good. Each application could potentially dent your credit score, making lenders hesitant.
A better strategy? Do your homework. Look for a lender whose terms and eligibility criteria fit neatly with your financial situation. This targeted approach is not only more efficient, but it also enhances your chances of loan approval without compromising your credit health.
Choose the right lender
Research is your best friend when looking for a Personal Loan. Compare the eligibility criteria, interest rates, and hidden charges of different lenders. Some might offer lower interest rates but come with hefty hidden fees that could keep you in debt longer than necessary.
Additional considerations
Besides these tips, ensure you have all your Personal Loan documents in order. Complete documentation speeds up the approval process and shows lenders you are meticulous and prepared. Using tools like a Personal Loan eligibility calculator can also provide a preliminary assessment of your loan eligibility before you approach lenders.
Also Read: Instant Personal Loan without documents: Eligibility, benefits & steps to apply
Conclusion
Taking the right steps to boost your Personal Loan eligibility is a move towards being financially savvy. When you keep your credit score healthy and your debts in check, you're well-positioned to take advantage of competitive loan offerings such as Axis Bank's Personal Loan that offers loans up to ₹40 lakh with an easy online, paperless process, low-interest rates starting at 10.75% p.a., and rapid approvals within 30 seconds.
Just gather your Personal Loan documents, and you're on your way to securing the funds you need without any hassle.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.
