Personal Loans are the most popular loan types available in the market today. They come in handy for planned and unplanned expenses like vacations, medical emergencies, weddings, education, home repairs, debt consolidation, and other big-ticket costs beyond your budget. An instant Personal Loan makes the required funding available efficiently and allows repayment in installments across a convenient tenure.
That said, you must fulfill the lender’s eligibility criteria to qualify for a Personal Loan. In the following sections, you will find a few tips to maximize your chances of getting approval for instant Personal Loans.
You must apply for the right loan amount to get your application approved. Before installing a Personal Loan app, evaluate your needs to decide upon an adequate loan amount. Ensure your loan amount is sufficient to cover your intended expenses. Always consider your income, expenses, and liabilities when borrowing a loan to ensure timely repayment. The lending institution will check your finances to determine your repayment capacity and decide on approval.
Before selecting a loan provider, review their eligibility requirements and ensure you can meet them without hassle. Most lenders have criteria related to age, income, employment, work experience, and credit rating. Ensure your eligibility before applying to avoid rejection.
When you urgently need funds, you may apply for multiple loans from instant personal loan apps to maximise your chances of approval. However, this is not suggested since multiple applications simultaneously project you as a credit-hungry borrower, diminishing your chances of approval or attracting higher interest rates. Moreover, each loan application pulls a hard inquiry on your credit report, reducing your credit score and hurting your eligibility. Therefore, when looking for a loan, evaluate your needs, compare loan plans, and apply for a loan with maximum chances of approval.
The debt-to-income ratio or DTI ratio is the percentage of your income spent on existing financial obligations. Ideally, your DTI ratio should be at most 40-50%. If you spend most of your regular income on other financial obligations, you will have only a little left for a new loan EMI.
Since a high DTI ratio reduces your creditworthiness and increases your chances of loan default or missed EMIs, the lender perceives you as a high-risk borrower. As a result, they reject your loan application or charge you with a higher interest rate than normal. Therefore, always check and reduce your DTI ratio to improve your chances of Personal Loan approval.
Lending institutions pay great attention to your credit history when evaluating your application. They prefer applicants with a decent credit score. A credit rating above 700-750 helps get quick loan approval with lower interest rates and better terms and conditions. On the other hand, a poor credit score reduces the chances of approval. Although some loan providers offer loans to low-score individuals, their interest rates are much higher than usual.
Some ways to boost the credit score are:
Most lending institutions allow adding a co-applicant in the loan application. If your credit profile is not up to the mark or your income is low, you may add your spouse or parent as a co-borrower to boost your chances of approval. However, ensure the co-borrower you add has a decent income and credit history. Since the co-borrower guarantees to repay the loan if you default, the lender’s risk diminishes and they may agree to approve the loan application.
Before settling for a Personal Loan app, you must thoroughly research and compare the available loan options. Even if you need the funds urgently, you must refrain from settling for the first loan app you come across. Since hundreds of financial players are in the Indian market, check their terms and conditions stringently. Compare loan amounts, interest rates, repayment terms, eligibility criteria, documentation requirements, and other conditions to choose the best loan plan. Also, check out the offers and discounts to get the best deal.
When you apply for an instant Personal Loan, lenders want to ensure you are capable of timely loan repayment. So, instead of providing only your salary and basic income information, ensure furnishing detailed data about your additional income sources from rent, part-time job, hobbies, investments, etc. If the lender has a minimum income requirement, these additional sources will increase your income and boost your chances of getting loan approval from instant loan apps.
A longer repayment tenure breaks down your loan obligation into smaller EMIs, reducing your financial burden and making repayments more manageable. Apart from making timely EMI payments possible, a longer tenure will also reduce your DTI ratio, increasing your chances of instant Personal Loan approval.
An online EMI calculator helps select a repayment tenure with budget-friendly EMIs. The longer the tenure, the smaller the EMIs. However, you may end up paying a bigger interest by the term's end.
When looking for an instant Personal Loan, follow these tips to improve your eligibility and boost your chances of getting approval. Since choosing the right lender is crucial to having a seamless and stress-free borrowing experience, download the Hero FinCorp Personal Loan app to get approval without any office visits or paperwork. With instant funds of up to Rs 3 Lakh and flexible repayment tenure of 6-36 months, you can achieve your goals and fulfill your dreams without hassle.
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