Applying for a personal loan can be of great help if you are looking for an immediate solution in case you are facing monetary problems. You can easily avail a personal loan if you are planning for a sudden vacation or to meet some medical emergency. You may also avail a personal loan if you aim to improve your CIBIL score also to qualify yourself for a loan. Before giving a personal loan to borrowers, lenders follow some stringent measures thoroughly to check your credibility and your past and present financial records are subjected to scrutiny to check your eligibility as a potential borrower. To improve your personal loan eligibility, it is very important to understand the factors on the basis of which our eligibility is being determined. It is crucial to analyse all the factors because it helps the borrower to avoid making financial mistakes that may adversely affect their personal loan eligibility. Let us examine some factors that may help you to boost your eligibility for a personal loan.
1. Check Your Past Credit Score Before You Apply
Your credit score/ CIBIL Score is a measure of repayment capacity against your loan taken. The higher your credit score, the better your chances of getting loan approval. Ideally, to qualify for a personal loan, you should have a credit score of 750 or above. And, in case you do not have a good credit score then it is better to wait and improve it before you approach any bank or NBFC for a personal loan application. You may improve your credit score by paying off your existing debt, paying all your bills regularly on time etc.
2. Do Not Make Multiple Loan Applications With Multiple Lenders
In the hope of getting your loan approved easily, do not apply for multiple loans with different lenders. Doing this may create a bad impression in the eyes of your lender resulting in further decline in your credit score that may become very hard for you to actually get approved for any type of credit or loan.
3. Have A Gap Of Minimum 6 Months Between Loan Applications
Do not put your lender in doubt against your ability to repay your loan back. So, keep in mind that you should have a gap of at least 6 months between your loan applications. Ensure that apply for a personal loan only if you are in dire need of it to get a better chance of its approval.
4. Choose Your Lender Carefully
It is one of the most important factors to rely upon. Before approaching any lender to avail your personal loan, you must research well in advance about all the available lenders and their competitive rate of interest.
5. Financial Stability
Better you financial stability, better are the chances to repay your personal loan. As it defines your credibility against repayment of your loan. Lenders ideally look for potential borrowers who are able to pay their loan on time and they must have valid income history with six months to one year of experience in the current organization.
6. Credit Score
Credit score plays a major role while applying for a personal loan. You must have a good credit score to be eligible for getting a loan. Lenders check well before giving you a loan, they judge you on the basis of your credit score and past credit behaviour to decide how you rank as a potential borrower.
To boost your eligibility for a personal loan, keep in mind the above tips very carefully before approaching to a lender. The chances of your loan eligibility increase when you make no default on these factors.