There are times when you need money for your different planned and unplanned expenses like weddings, education, vacations, medical emergencies, renovation of home, or any other debt. And, if you are not financially prepared for it, it can cost you high and drain out all your savings and lead to a financial crisis. This is where you need a personal loan that protects your financial health. They not only offer you the required amount but also get approved easily in a short period.
A personal loan can be a perfect source of finance and is a popular option in today’s time. But, before applying, you need to fulfill the eligibility criteria to get a personal loan. And, if you want to get personal loan approval with the right terms and conditions, then here are six easy tricks to help you improve your loan eligibility.
Pay off an existing loan
The first thing that a loan provider will check is whether you have an existing loan or any previous loan over your finances. This is to be checked as it becomes difficult to manage the equated monthly installments of a new loan when you already have a debt to pay.
An existing loan may create a doubt in the personal loan provider’s mind about the loan repayment capability. So, before going to the loan provider, it is essential to clear the balance of any outstanding loan or debt. This makes a good impression on the personal loan provider and helps you arrange a better budget for new EMIs.
Do not apply for several loans simultaneously.
When you apply for a personal loan, the loan provider makes an inquiry to estimate the default risk. If you apply for several loans together, then there will be hard inquiries on the credit report by the lenders. This will result in reducing your credit score and you will be in a difficult situation.
Include your income sources
Personal loan providers also look at the income to measure the repayment capacity of the loan you applied for. Therefore, when you fill-up the online application form for a personal loan, you should mention your salary details.
You can also add all your income sources, including rental income, part-time income, or any other income. The lender knows that you are earning a good amount to make timely payments when you do this.
Keep a check on the variable pay
Variable pay is a benefit offered to the employees by their employers in the form of incentives, bonuses, and commissions. When you apply for a personal loan, it is essential to assure that you carry an updated record of the variable pay. This is to be done as some personal loan lenders consider the variable pay record to determine the personal loan eligibility.
Opt for a long-term tenure
When you apply for a personal loan, you can either opt for short-term or long-term personal loan tenure. A short-term tenure lasts for 1-3 years, and a long-term tenure for a personal loan lasts for 3-5 years. So, we recommend you choose long-term personal loan tenure over short-term tenure.
In long-term tenure, the amount of EMI gets reduced, enhancing the eligibility of loans. The eligibility is enhanced as the tenure is for the long-term; the balance of the outstanding loan gets divided for a longer time.
Sustain a healthy CIBIL score
To get any personal loan, it is essential to have a good CIBIL score. A CIBIL score consists of three digits whose value is generated on a person’s past credit history. If the CIBIL score is 700 or above, it is a good CIBIL score, and you can get a personal loan. Thus, remember to maintain a good CIBIL score before approaching a personal loan provider for a personal loan.
One of the ways to maintain your CIBIL score is by not exhausting your credit card limit if you have one. This will help in improving your credit score.
These are the simple tricks that can help you to improve your eligibility to get a personal loan. If you fulfill all these conditions, you can get a personal loan by verifying your necessary documents and completing the loan application process.