Tips For Personal Loan Approval - Personal Loan Blog - Tata Capital

6 Tips to Get Your Personal Loan Approved

Mar 01, 2017

A personal loan helps to obtain the much-required credit during a financial crisis. It provides the cash to meet your personal goals. Some may require extra funds for wedding purpose, child's education, or to finance any other expenditure.

Lenders have their own set of requirements for potential loan borrowers. Many loan applications get rejected as borrowers are not able to fulfill the specific requirement criteria.

Here are six tips that will assist in improving your chances of persona loan approval.

  1. Check the loan eligibility criteria before applying
    It is important to check whether you meet the personal loan eligibility criteria of the lender you wish to borrow from. Most lenders require applicants to be in a particular age group, preferably between 21 and 65 years. Also, you must annually earn a minimum amount that is specified by the lender. Additionally, you should not have any outstanding defaults on loans or on any of your credit cards.
  2. Check your credit score
    If you are not aware of your credit score while applying for a personal loan, your application may get rejected. Obtain a credit report, so as to identify your credit score and rectify errors, if any. A good credit score not only increases your chances of loan approval but also helps you land an attractive interest rate.
  3. Avoid multiple applications
    If you think applying at numerous places is the right thing to do, you are wrong. Most lenders check the existing applications and may doubt your intentions. The probability of your loan application getting approved is less in such cases. Additionally, multiple loan applications without loan approval will affect your credit score.
  4. Provide factual information
    Lenders verify the information provided by you through supporting documents. They may also give you a call to verify your information personally. Hence, provide factual information about your residence details, annual income, past loan repayments, besides others.
  5. Aim for a realistic loan amount
    Quite often, borrowers apply for an enormously huge amount and get rejected by the lender. It is imperative to identify how much you need to borrow. Apply for a loan amount based on your ability to repay. Lenders conduct a check of your income and repayment ability before approving a loan. Hence, aim for a realistic amount in order to avoid a loan rejection.
  6. Maintain job stability
    Banks and lending institutions require applicants to have a stable work history. Most lenders require the applicants to have at least two years of work experience in a particular job. Hence, avoid switching jobs if you are planning on applying for a loan. Stability in the job is required to ensure you have a steady source of income.

There are numerous factors that lenders take into consideration, like the ability to repay, income, job stability, and credit score. Therefore, it is necessary that you have proper knowledge about personal loan documentation process, eligibility criteria, repayment options, and other factors. A Proper understanding of such aspects will reduce your risk of loan rejection.