Tips to get Personal Bank Loan Approved
Personal loans are ideal during financial hardships and can be acquired with minimal paperwork and no collateral. Many banks and NBFCs have been promoting instant personal loan approval, making it seem like a piece of cake. With these helpful assistance programs, you don’t have to worry about getting fast funds again.
Applying for a loan, however, can be difficult due to the eligibility requirements and other terms and conditions that many financial institutions may not disclose until after you’ve submitted your application. This often leads to delayed processing times of loans as well.
When you are tight financially, and you need to secure a personal loan immediately, these tips can help get your loan approved:
- Apply Online
Applying for a personal loan online is the most secure and speedy way to get it. All you need to do is provide your information, upload documents, and wait for a confirmation from the lender. Once your profile and documents have been verified, the lender can approve or reject your loan application. Moreover, you’ll be updated regarding your loan request through emails or messages.
After submitting all the necessary documents, your loan should be approved in hours and expect your funds within 1-2 days. Your approval for a short-term loan in India can happen in just a few hours after application. This makes these loans come in handy when tight on cash.
Before searching for a loan elsewhere, it’s highly recommended that you check with your existing bank for personal loan offers. Many banks offer pre-approved or pre-qualified loans based on your credit history and relationship with the bank. If you take advantage of the pre-approved offers available online, you can get the funds in minutes.
- Keep a Good CIBIL Score
When applying for a personal loan, your credit score is essential in determining how likely you are to be approved. The higher the number is on your report, the more probable it will be that you’ll get accepted. It is often said that when your score is above 700, it’s considered very good; nevertheless, an even higher rating of above 750 can lead to faster approvals.
Thus, having a good score is paramount if you hope to secure a personal loan. Lenders use your score as an evaluation metric for your profile, especially since these loans are unsecured and don’t require any collateral. As such, income/credit history is the key factor lenders consider when deciding whether to approve a loan.
If you have an excellent credit score, lenders will view you as a low-risk borrower, implying that it’s rare for you to default payments. This will raise your loan getting approved quickly and also assist you in getting better rates and low processing fees.
Always pay your loan and credit card dues on time to keep your credit score in tip-top shape. The most straightforward way is to set up an auto-pay with your bank for each EMI, so you never miss a single payment again.
To ensure your EMI gets paid on time, have it automatically deducted from the bank account you registered for auto-pay, but your account should always have enough funds not to miss payments.
- Check Your Score Before Applying for the Loan
Even if you’ve never defaulted on a loan and have an impressive credit score, checking your credit score before applying for personal loans is recommended. It may be difficult to keep track of recurring payments, so there’s always the chance that you accidentally missed or were late with one (or two) credit card bills in the past.
Unintentional delays in payments can undeniably affect your credit score, but even more, concerning are the potential errors or lapses that could be present in it. To avoid a loan rejection and increase your chances of securing a loan, know your credit rating before applying.
In addition, it is essential to check your credit score because different lenders have various prerequisites. If a loan application of yours gets declined, not only will you be disappointed, but also this can affect your credit rating. As such, it’s prudent to verify whether or not your credit score meets the lender’s eligibility criteria before applying for any loans.
- Make Sure All the Necessary Documents are Ready
Before submitting your application for a personal loan, ensure all the necessary paperwork is ready. Although unsecured loans do not require many documents from borrowers, it’s best to double-check the lender’s website or inquire with the bank representative about what documentation you’ll need beforehand. Having all necessary documents on hand can significantly cut down loan processing time. The following are the documents often requested by lenders:
- Identity proof documents like PAN Card, passport, or Aadhar Card.
- Address proof such as your Aadhar card, Passport, Voter ID, or electricity bill.
- If you’re a salaried applicant, then submit the last three to six months’ salary slips
- Self-employed applicants must provide their latest Income Tax Return (ITR) and Computation of Income along with two years’ Balance Sheet and Profit & Loss Statements certified by an accredited Chartered Accountant (CA).
- Provide Only Accurate Information
Submitting accurate personal and income information increases the loan approval chances and makes the whole process smooth. For instance, if you have multiple sources of income, list all the details so that your lender won’t need to request additional documents should the primary source fall short in covering repayment costs. Also, if living on rent, include your rental agreement and proof-of-address documents.
If you’ve come to the conclusion that a personal loan is your best financial option, do some calculations first to determine if taking on debt is an affordable choice. Next, check your credit score so that you have an understanding of where you stand before submitting any applications. Your approval chances and potential to get a competitive rate are usually much higher with higher credit scores.
Once you have assessed your loan preferences, analyze various lenders’ different rates, terms and fees to get a financing option that best fits your financial needs. Once you’ve found an ideal lender, get the needed documents and submit the loan application.
You can now be sure to get a personal loan since you understand what needs to be done to improve your loan approval.
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