A personal loan is a type of credit allowance. A personal loan helps in catering your financial needs during a time of an economic crisis These needs can range from a car loan, house loan or renovation, education loan or even medical expenses.
The process of acquiring a personal loan is easy and hassle-free. Consumers can now apply for personal loans and get approved within the same day.
There are various terms and conditions or requirements which are necessary to be fulfilled when applying for a personal loan. A personal loan is a collateral-free loan, so the financial institution will always assess your credit eligibility by check on various factors before approving your loan amount.
The below four expert tips will ensure your profile matches the personal loan eligibility criteria-
Check your credit score
When applying for a personal loan, it is essential to know your credit score, as a low credit score will lead to loan rejection. Also, ensure that your credit report score is 750 or above. When the credit score is above this range, it becomes easier to acquire a personal loan online . Also, remember that each loan rejection due to low credit score further decreases your score. your credit report.
Have a mix of unsecured and secured loans
Potential lenders get reassured when the repayment of your previous loans is paid on time. Having a credit profile of both secured and unsecured loans will improve the overall credit report. Moreover, do not make multiple applications for sanctioning of loans which can lead to the reduction of credit score and make the loan approval process much more difficult.
Not more than 30% of total income to be spent on EMIs
Lenders also take in the context of the amount of money you have left after paying your monthly dues and existing loans. Never exceed 30% of your income in the outflow of cash. Always remember not to overflow existing loan obligations as lenders will judge if you are eligible to repay the loan amount on time.
Should not have availed a personal loan in the last six months.
Always keep six months gap between your loan applications. Lenders will know whether you have previously taken a personal loan within the last six months and whether you have the ability to take the burden of an additional loan and monthly EMI.
The additional requirements for acquiring personal loan eligibility is the availability of the below following documents-
Proof of address-
Copy of previous month’s Utility bill.
Updated bank statement for the past six months
Proof of identity-
Copy of PAN card, Driving licence or Passport
The minimum monthly salary of an individual must be above Rs.17,000.
Copy of last six months salary slip.
Must be a resident of India
Acquiring a personal loan requires extensive documentation and also the financial institutions look for a stable source of income before sanctioning the loan amount. This guarantees that the loan repayment will be made on time. So it is advisable to make sure that you have been working in the same company at least for a period of six months.
The lenders evaluate the debt-to-income ratio before releasing the loan amount, and if you have been changing jobs in recent times, your loan application will surely get rejected. Know more here to get further details on personal loan eligibility.