Are your Personal Loan applications getting rejected every time? Here are 6 foolproof ways to improve your Personal Loan application.
In times of need, a Personal Loan is a great asset to bank on. But, imagine applying for one and getting rejected because of reasons unknown to you. Personal Loans, with its collateral-free offerings and reduced interest-rates, have become extremely popular among young working professionals who find its hassle-free terms of usage accessible and easy to deal with.
Additional Reading: Your Personal Loan Interest Rate Guide For 2018
The Moneylenders
Moneylenders (mostly, banks) have a stringent process in place when it comes to selecting the right candidate. The role of a moneylender is quite similar to that of an HR executive looking out for prospective employees. Before taking someone in, the HR executive conducts multiple rounds of screening, runs thorough background checks and makes sure that the papers are in order. For the lenders, the stakes are twice as high and that is the reason why they are so careful about who they deal with.
If you are applying for a Personal Loan, take steps to ensure you have a good credit profile before you shortlist a loan to meet your short-term or long-term needs. Although a high Credit Score is a primary checkpoint for most moneylenders, it’s not the only thing the lender checks. There are a host of other factors which decide the fate of your application.
If you have had your Personal Loan application rejected due to mysterious, unforeseen circumstances, here’s a roadmap for you to foolproof your loan application the next time around:
Till Debt Do Us Apart
Debts are a complete deal-breaker for lenders. If your finances are drowning under the burden of piling debts, there is no way they will look past that and offer you a loan. As a first step, clear your existing dues and set the record straight.
Your Credibility Speaks Volumes
One way to improve your loan profile is to work on your credit rating. When you approach a lender for a Personal Loan, they will dig into your credit report to check your current state of finances. Since a good Credit Score is the sign of a healthy credit report, it helps to keep a watch out for a sudden decline in numbers.
Additional Reading: What Can Hurt Your Credit Score?
How Good Is Your Credit Score?
A vital part of securing a Personal Loan is having a good Credit Score. A Credit Score is usually considered good if it’s 700 or more. If you don’t have a remarkable score at this moment, there are a number of things you can do to improve your Credit Score.
Until then, put your decision to get a Personal Loan on hold. Instead, try opting for a Credit Card. It’ll not only be your best buddy in times of occasional money crunches but will also help you keep your Credit Score up and running.
Additional Reading: How To Improve Your Credit Score Quickly
Holding A Steady Job Is Key
It’s a bad idea to apply for a Personal Loan right after switching into a new job. Lenders want to be assured that you have the financial stability to repay the loan amount in time. As a result, they prefer candidates who have spent at least six months – one year in their current job. If you have just taken up a new job, give it another couple of months before you hit the ‘go’ button.
Are You Sure About The Loan Amount?
When you apply for a Personal Loan, the lenders check your profile and your loan repayment capability. If your requested loan amount is not in proportion to the salary you draw, lenders will reject your application assuming that you will not be able to repay the amount within the allotted tenure.
Not Everyone Is Eligible For Personal Loans
You must be at least 18 years old to be eligible for a Personal Loan. However, for most lenders, the minimum age for eligibility is 21 years and maximum age is 60 years. While applying, read the requirements carefully and make sure you fit all the criteria well. If you have a solid financial profile and fulfil the conditions mentioned above, you are all set to apply for a Personal Loan.
In case your loan application requires more work, you will need an array of tools to make it better. At BankBazaar, you will find it all. Right from the essential tips to help you manage your finances better to the timely credit reports to monitor your credit usage, a smarter world awaits you on the other side. All set to explore your Personal Loan options?