A personal loan is a loan of convenience and you can use it to fund a variety of financial needs such as vacations, emergencies, education costs, and debt consolidation. What makes it ideal is that you don’t need to pledge any collateral to avail it. However, before applying for a personal loan, it is essential to know that lenders require you to meet the eligibility criteria put forth by them.
Qualifying for a loan based on lender terms allows you to get a hefty sanction at an affordable interest rate. Also, in the absence of collateral, meeting personal loan eligibility terms becomes all the more important.
Depending on the lender you apply with, you may have to match eligibility requirements such as those pertaining to income and your city of residence. A simple eligibility calculator will help you determine whether you qualify or not and if you don’t, here are five tips to boost your eligibility.
Tackle Your Existing Loans
Having existing loans on your plate means that a significant portion of your income is already going towards paying EMIs. This will make it difficult to pay another one and may cause hesitation in the minds of lenders. You are likely to come across as credit hungry and so it is important to apply for a personal loan only after you repay most of your outstanding debt. Doing so will build your credit score and give your income enough breathing room to make timely repayments towards the personal loan.
Maintain Good Credit Score
Having a good credit score, preferably over 750 boosts your eligibility. It not only improves your chances of approval but also puts you in a position to negotiate favourable loan terms. With good credit score, you can expect a higher loan amount, a flexible tenor and even lower personal loan interest rates. In contrast, a bad credit score can either lead to rejection or result in a lower principal or higher interest rate. Therefore, if your score is less than ideal, build it by repaying existing loans and credit card balances. Also, check and correct any discrepancies in your credit report.
Show Additional Income, If Any
Since your income reflects your repayment capacity, it is important to disclose all sources of income to ensure approval and not just your salary. If your salary is low, the lender might doubt your repayment abilities and reject your application. Therefore, it is important that you supplement your salary with the income that you receive from rental property and dividends, among others, to strengthen your case.
Use these tips to enhance your personal loan eligibility and get loan approval. Once you implement them, use a personal loan eligibility checker to see if you qualify. To make the task easier on yourself, pick a personal loan with minimal eligibility requirements. Bajaj Finserv Personal Loan, for example, requires you to fulfil only the following requirements.
- You must be between 23 and 55 years of age
- You must be an employee of an MNC, private or public company
- You must be a resident Indian
- You must earn the minimum income as per the city you reside in
As a salaried employee, you can easily access a high-value loan of up to Rs.25 lakh at affordable interest rates, with disbursal within 24 hours of approval. You can repay this amount over a flexible and convenient tenor ranging from 12 to 60 months and also apply for and manage your loan online.
Before doing so check your pre-approved offer to view a customised deal and expedite financing.