PERSONAL LOAN IN YOUR MIND! KEEP IN MIND THESE POINTS TO AVOID REJECTION
Cash crunch? The first thing that comes to your mind is taking up a personal loan that will help you fulfill your needs, dreams, or emergencies. Getting a personal loan is an easy way out during rainy days but the process of getting it isn’t as easy as it seems. The ads that float around stating, ‘Loan is 10 minutes with minimum documentation!’ might be too tempting. But when one begins the process, the turnaround time tends to become never-ending. If this bogs you down, imagine the plight if you get a message saying , ‘We cannot approve your loan’. Heartbreaking, isn’t it? So here are some tips that will help you have smooth and quick loan processing and avoid rejections.
1. MAINTAIN YOUR CREDIT / CIBIL SCORE:
A healthy credit score helps you inch closer to your loan process. The ideal credit score should be 750 and above, which improves your chances of securing a personal loan. It is always advisable to check your credit score by getting a copy of your credit report. Since personal loans do not need a guarantee or security, banks usually approve or reject the loan based on salary slips, bank statements, and credit scores. To retain a good credit score, one must have a good repayment history and not many outstanding debts on credit cards or other loans.
2. INSUFFICIENT INCOME:
Income is the key factor determining your loan eligibility. Based on the income, financial institutions and banks get an idea about the applicants’ ability to pay the loan. An applicant must determine the capacity to pay loan EMIs before deciding the loan amount. The loan amount is decided based on the monthly income and any monthly obligations of the applicant.
3. CORRECT DETAILS ON YOUR LOAN APPLICATION:
Incorrect details on your application can hinder your application. An applicant must ensure that the name matches the documents submitted and there are no spelling errors. Even the address you mention has to be as per the supporting documents. It is essential to have the correct address as during physical verification, the executive signs off the report with a positive remark. Wrong details impact the Credit score.
4. AVOID TOO MANY APPLICATIONS IN A SHORT SPAN:
Too many applications negatively impact your case when it goes to the credit team. If an applicant applies for many loans through various institutions, then it indicates that the debts are piling up and shows that an applicant is using loans to make ends meet. With a digitized medium, bankers can easily track the number of applicants’ applications, which creates a negative perception.
Wise decisions are better than spontaneous reactions. One must take a personal loan under extreme circumstances and adding too many personal loans or debts tends to increase the burden. A personal loan should be used as a wild card. It is important to be responsible and diligent while consuming the loan amount and paying off the debts.
Though the above-mentioned points are the basics when it comes to documentation and CIBIL scores, there are additional steps that the credit team follows like office/house verification, repayment history, etc. which form an important aspect of loan approval.