A personal loan is useful when funds are tight and requirements arise. For many consumers, it is the best option because to the speedy approval procedure, larger loan amount, and variety of end-uses. There are other considerations at play that are crucial when applying for a personal loan because they are unsecured and do not require collateral. For those who get a salary, this is particularly true. A lender evaluates the risk and repayment capacity of the consumer using a few different variables. To achieve your personal or professional goals, it’s critical to understand the factors that may be crucial in securing a personal loan with favourable interest rates.
Top 5 Tips to Qualify for A Personal Loan in India
Maintain a good credit score
A good credit score is the biggest difference between your application being accepted or rejected by the lender. For calculating the credit score, elements like credit and repayment history, credit utilization, and debt-to-income ratio among others are taken into account. Customers that maintain a good credit score often see quick approvals for their personal loan applications and attractive interest rates. Therefore, it is important to maintain a good credit score to qualify for a personal loan. A credit score is a three numeric score that ranges between 300 & 900. For the approval of an application for a personal loan, most lenders expect a score of over 750.
Individuals can take the following steps to maintain a good credit score and get a Personal Loan for salaried employees easily
- Pay all pending credit card dues and EMIs in full.
- Timely payment of outstanding amounts reflects positively on your credit score
- Repay previous outstanding loans before applying for a new one
- Keep your debt-to-income ratio less than the 40% mark. For instance, if you earn Rs. 1 lakh per month. Ensure that you are not paying more than Rs. 40,000 in EMIs.
Report all income sources
For a lender to feel confident about extending a loan to anyone, the lender needs to know all the income sources that you have. Therefore, it is important to include sources like a side business, rental income, etc to give a comprehensive view to the lender. As the lender needs to decide on approving or rejecting your loan application, one of the critical elements is the repayment capacity of the customer. As a result, it is important to include all possible income sources so that the lender has an increased sense of confidence.
Job history and employer reputation
As mentioned, a personal loan is a collateral-free unsecured loan. Therefore, the lender needs to rely on metrics like employer reputation, job history, years of experience, etc at the time of approving or rejecting a personal loan application. Salaried employees that are working for reputed organizations and have a good job history can get personal loans approved at much lower interest rates. This is primarily because the lender is aware of the job security of the individual and can approve applications of well-educated individuals that are working for reputed companies.
Maintain a low debt-to-income ratio
It is important to maintain a low debt-to-income ratio for a personal loan application to be approved. As a thumb rule, ensure that your total EMIs do not cross 40% of the total income. In case your monthly commitments to EMIs are crossing the 40% threshold, you should first pay up the existing outstanding loan before filing a new application. Another important thing that you can do is to clear any existing dues on your credit card or outstanding loan before filing a new application for a personal loan. This will help you in managing your debt-to-income ratio.
Do not file multiple applications
It is suggested that you do not file multiple loan applications in a short period. All these loan applications are processed at a credit bureau to assess your credit profile. These are known as hard inquiries by lenders after you apply for a loan. These are also a part of your credit report. Too many inquiries in a short period may look like a risky proposition to a lender. It is better to check your eligibility by matching it with the criteria of the lender and using a personal loan EMI calculator to assess the amount of loan that you can get.
qualify personal loan for salaried employees
credit success can help you get a personal loan in a quick, hassle-free manner at an attractive interest rate starting at 9.99% per annum. Get in touch with us today and make use of the 100% online application process with minimum documentation.
Conclusion
There are several things to keep in mind while applying for a Personal Loan in India. The above-mentioned five suggestions will help you meet the Personal Loan criterion and can be very helpful when you want to apply for a Personal Loan. Follow these tips to increase your chances of loan approval so you can fulfil your financial needs without any hassle.
