Want Personal Loan? 5 simple tips to improve your eligibility
Money is required for different planned and unplanned expenses, be it a wedding, home renovation, higher education, vacation, medical emergency, or debt consolidation. If you are not financially prepared for it, the cost may drain out your savings and even harm your financial health significantly. This is when personal loans come in handy. However, you need to fulfil the lender's eligibility conditions to qualify for a personal loan. Here are five simple tips that can help you improve your personal loan eligibility.
Reduce your debt-to-income ratio
Before you apply for a personal loan, ensure that you pay off your existing debts and credit card bills to reduce your debt-to-income ratio. Your current debts and credit card due amounts may pose you as a credit-hungry borrower and make it challenging to get another loan. (Image source: PTI)
Include all your income sources
Lenders also look at your income to measure your repayment capacity. Therefore, while filling up the online loan application form, you must mention not only your regular salary but all your income sources, including any rental income, part-time income, or anything else. (Image source: Reuters)
Improve and maintain your credit score
Since personal loans are unsecured, lenders rely on your credit score to determine your creditworthiness. A good credit score can project you as a responsible borrower who remains consistent with the payments. As a result, the lender does not see any risk in lending you, and your chances of approval increase significantly. (Image source: Reuters)
Do not apply for several loans at a time
When you apply for a loan, lenders make a inquiry to estimate your default risk. If you apply for several loans simultaneously, all the lenders will make multiple hard inquiries on your credit report, which will eventually reduce your credit score. (Image source: PTI)
Find a lender with the eligibility criteria you can fulfil
Check the eligibility conditions of different lenders and find the one with eligibility criteria you can fulfil. (Image source: PTI)