Tips to Make Successful Loan Application
Making a successful loan application is significant to get your loan amount approved; it implies that you submit all the required information and documents correctly. Though you may furnish all the right information and documents, there would be times that your application may not get translated to approval of the loan. So here are several tips to follow to increase the likelihood of approval of your loan application.
Maintain a good credit score: When applying for a loan, checking on your credit score as a low score can lead to instant rejection of your loan. A good credit score determines good credit behaviour and helps you get a high loan amount at low interest rate, whereas low score is a reflection of bad credit behaviour and can lead to rejection of the loan or approval of the same at a high rate of interest. The score also helps lenders determine your repayment capacity that further helps them gauge the risk of your loan approval. Ideally, a score of 650 and above is considered to be a good score to get your loan approved. However, the credit score requirement may vary from lender to lender. Therefore, it is best to check on your credit score before applying for a loan to ensure your application is not rejected by the lender.
Check on your eligibility: Lenders in India have a list of loan eligibility requirements that you should comply with to be eligible to get a loan from them. So before taking the first step of applying, check if you fulfil lender’s criteria in terms of minimum income, age, employment status, residence type and others. You can check eligibility criteria on the lender’s website or application or can even visit the lender’s office when making an offline application. You can also calculate your personal loan eligibility online using a personal loan eligibility calculator.
Furnish all the correct information: There are high chances of your personal loan application getting rejected if you do not furnish all the correct information. Lenders require you to submit information like your name, address, type of employment, company name, company email ID and others. If these details are found to be incorrect at the time of verification, then your application can be rejected right away.
Submit all the relevant documents: Failing to submit documents that help lenders verify the information submitted by you can lead to instant rejection of the loan application. For example, if you mention your monthly take home salary to be Rs. 72,000 then to help the lender verify the details, it is imperative that you submit the salary slip or salary certificate along with your bank statement. Submitting relevant documents is critical to ensure successful approval of your loan application.
Assess your repayment capacity: Before you make the loan application, assess your loan repayment capacity. Check if you would be able to repay the loan from the monthly income you earn. Repayment of the personal loan amount has to be made in EMIs. When applying, keep your monthly obligations in mind and opt for an amount you can repay to ensure you don’t end up in a debt trap.