Tips to improve your loan approval chances
When it comes to achieving your life's goals, it's important to put key parts of the puzzle together at the right time. Whether it be to ensure your education is fully paid for or to make crucial home repair payments, or even to set up your business, having money when you need it most is crucial.
However, that's easier said than done sometimes if your finances are tight. In such cases, a personal loan can be immensely useful. However, given that they don't require any collateral, they're not always easy to come by.
When you apply for a personal loan, it gets evaluated under a number of key parameters. In order to ensure you have the best chance of clearing most of those criteria and are successful in obtaining a personal loan, here are some suggestions which can improve your loan approval chances:
Steady your employment profile
One of the first things lenders want to be assured of is that you have enough cash inflow on a regular basis to be able to pay back the loan you want to take. Naturally, one of the best ways to prove this is by showing you have a stable job profile.
The job profile and earning capacity of the loan-taker directly affects the amount of money that they can borrow. If you're someone who changes jobs on a dime or have prolonged periods of unemployment, you could be in for a bit of explaining to do before you convince the lender that your credit is good!
Bolster your credit score
One of the most important factors that lenders use to assess your creditworthiness before granting you a loan is your credit score. It ranges between 300 to 900 and a good credit score for personal loan is anything above 750.
For this reason, you'll want to make sure you work towards maintaining a good credit score before you approach a potential lender for a loan.
Fortunately, it's not that tough to maintain a healthy credit score. Make sure you repay on time. Better yet, rather than having to remember the date of repayment every month, you could automate the entire process through your bank.
Another solid way to ensure a healthy credit score is to cut down on the number of credit cards that you are actively using. When you use the same card over and over and make your payments on time, it reflects positively on your credit score.
Opt for a lengthier repayment tenure
If you're not in the best position to apply for a loan, you might want to consider going for a longer tenure. This can help lower your monthly EMI. You can easily look up an online EMI calculator to arrive at an ideal tenure where the interest rates and EMI suits your repayment capacity.
So it goes without saying that if you do opt for a longer loan term, try to make sure it doesn't come with higher interest payments. Whenever you come into a bit of extra financing, make it your first priority to pay off the loan or at least make a part prepayment.
Multiple applications are a no-no
If you're struggling to get a loan and are contemplating firing off loan applications to multiple lenders, then stop. That's because it comes off as desperation on your part and paints an unflattering picture of your current financial situation.
It's also worth noting that every time one of your loan applications gets rejected, your credit score takes a dip. That will certainly dash any slim hopes you had of getting a loan even further.
If nothing works, let things cool off a bit
If your loan application does get rejected, then try to hold off on trying again for at least six months. As mentioned earlier, a rejection affects your credit score negatively, and applying multiple times over a short span paints you as more of a risk.
Instead, if you resist applying for another loan for a six-month period or more, you are proving that your finances are stable enough to sustain your expenses during that period without having to take a loan.
When you take loans using the mPokket instant loan app, be it an education loan, a service loan, or a salary advance loan, timely repayments improve your CIBIL score, which will help you be eligible for larger loans and even improve your employment prospects.
That's why, If you are seeking an instant student loan or salaried loan and wondering where to turn for some quick credit, simply Simply download the mPokket online loan app, register by uploading a handful of documents, and post the online loan approval, borrow instant personal loans of up to Rs. 30,000. mPokket loans for students and loans for salaried are both credited straight to your bank or Paytm account.
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