Tips to Get Your Personal Loan Approved Quickly

Out of all the worries and struggles we have in our daily lives, one of the most prominent and disheartening is that of a financial crisis. And no matter how well settled we are in our financial lives, almost all of us undergo some form of financial strain at one time or another. But luckily, due to the advent of technology, you can access a variety of financial instruments which can not only elevate you from your financial worries but also take care of future emergencies.

One such financial instrument is a personal loan. Although the concept of a personal loan is not entirely new in India, the concept has been getting a substantial amount of traction in the past couple of years, mainly due to the numerous companies and lenders who now specialize in rendering this service. 

In simple terms, a personal loan is a financial instrument through which you can borrow a certain sum of money, usually in the range of ₹10,000 to ₹500,000, and repay it back using a flexible repayment plan while at the same time enjoying comparatively low rates of interest. One of the best aspects of a personal loan is the fact that you do not need to inform the borrower of how you will be spending the money, and thus you have free will. 

But if you have researched loans, either traditional or modern, anytime in the past, you are well aware of the fact that you need to follow certain tips and tricks to get your loan application approved, and thus in today’s article, we will discuss exactly that.

1.Check the Eligibility Requirements of the Lender

One of the first and most important tips to keep in mind when you are applying for a personal loan is to check the eligibility requirements of the lender of your choice. While this might sound flattering at first glance, making sure that you check the eligibility criteria of the lender before you apply for the loan as it will make it easier for both you and the lender to deliver the money when you need it the most. Along with this, checking the eligibility criteria will allow you to save time and quickly settle on a lender who meets your needs, and you also meet their eligibility criteria. 

2.Check Your Credit Score

In India and across the world, one of the most important factors taken into consideration by lenders is checking the borrower’s credit score while assessing their loan application. In simple terms, your credit score is a number assigned to you by the credit rating agency after taking into consideration four main factors: the total number of loans you have taken in the past, the total amount of credit you have used, the number of timely payments you have made in the past, and number of missed payments in the past. 

In India, the two main credit rating agencies, CIBIL & Experian and they assign you a score on a scale of 900, and if you want to get easily approved for a loan, you need to have a score of 750 or above. 

3.Do Not Apply With Multiple

One of the most common and disheartening mistakes committed by first-time borrowers is applying with multiple lenders when they are looking for a loan. While this process might sound insignificant at first, believe it or not, this action comes with far-reaching consequences. 

As we mentioned in an earlier point, every time you apply for a loan, the lender will check your credit score, and each inquiry made by the lender is known as a hard inquiry. And greater the number of hard inquiries you have on your credit report, the lower will be your credit score. 

Thus in a scenario where you apply with multiple lenders at the same time, all of them will request hard inquiries, thus lowering your credit score beyond recovery. 

4.Clear All Your Previous Dues

If you are planning to take a personal loan and you want your application to get approved quickly, one of the easiest yet tried and tested methods is to clear all your previous dues before you apply for a new loan. 

The reason behind this is simple. When you are applying for a new loan, the lender will check your credit history and take note of the fact that you already have some outstanding dues. In lieu of this, they will try to reduce their risk and either lower the loan amount you have requested or reject your application outright. 

5.Calculate Your Loan Amount Before Applying

A rookie mistake most first time borrowers make is not to calculate the loan amount before they apply for a personal loan. While this point might insignificant stupid at first glance, it holds high significance if you want your application to get approved quickly. 

Most lenders in India follow a rule of thumb when it comes to giving out loans. 

The EMI amount of the loan they provide should either be 50% or less than 50% of the total monthly income of the borrower. This means that if you want a loan of ₹100,000 and want to repay it back in 12 months, your EMI amount should be ₹7800 (approx), and this should not exceed 50% of your monthly income. 

Using this reverse calculation, you can not only find out the loan amount you are eligible for but also save yourself time and resources by applying to lenders who can lend out this amount and ignoring the ones that can’t. 

6.Avoid Errors in the Loan Application

Last but not least, if you want your loan application to be approved quickly, then make sure you avoid making any kind of errors in your loan application. This can include everything from sharing your correct personal information all the way to uploading the correct documents to process the loan application. 

Along with this, make sure that before you submit your application, you cross-check all the details you have shared so that you can go back and rectify any mistakes.

Ending Lines

Getting a personal loan can not only help you come out of your financial worries but also equip you to take care of your financial worries for the future. 

We hope that the tips shared above will help you get your application approved in the shortest possible time. So go ahead and apply for a personal loan today.