A personal loan is one of the first few options, which comes to mind when you need instant money to meet urgent expenses. It is readily available, require minimal paperwork, and is usually sanctioned quickly. Such loans generally follow a convenient and fast application process, but some factors can prolong the procedure.
Several things, such as your credit score, your financial history with the institution, your income, etc., can affect your personal loan eligibility. Instant approval of a personal loan is not difficult, but it can only be achieved when you meet specific criteria.
Here are four checkpoints that will ensure your loan gets sanctioned quickly:
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Maintain a decent credit score
A personal loan is generally a choice when there is an unplanned and urgent need for money, which leaves very little time for preparing beforehand. However, as a general rule, you must try to maintain a decent credit score at all times. For availing a personal loan, you must have a score of at least 750 or above. This can be achieved by paying your debts and bills on time.
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Research and comply with personal loan eligibility
When you apply for personal loan, you must check the eligibility criteria for your target lender. Doing a self-check before applying for the loan will give you a clear glimpse of where you stand. If you find yourself ineligible, then you should try to work on your credit score and apply again.
It is better to apply for a loan when you are eligible rather than getting rejected. Multiple rejections can affect your credit score and make it all the more difficult to apply for personal loan.
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Apply for a reasonable amount and budget
You may be tempted to borrow more than you require to enjoy better financial flexibility, but what you fail to realize then is that any amount you borrow needs to be paid back with interest. To avoid paying back hefty interest, you must apply only for the amount that you require.
You can use a personal loan calculator to calculate your Equated Monthly Installments (EMIs) and understand how the personal loan interest rates affect you in the long run.
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Refrain from making multiple loan applications
A common mistake most people make is to apply for multiple loans at different banks and institutions. Just like rejections, multiple applications can also eventually lower your credit score. This is because the more loans you avail, it gets even more difficult for you to pay them back.
Loan providers also check your credit card history and the number of credit cards you own to determine your bank-ability and trustworthiness.
Summing it up
Your loan application is a catalog of your credibility and eligibility and must present you positively to the lender for getting the money quickly. If you think you are ready to get a personal loan, you should check out Tata Capital for attractive interest rates with minimum documentation for loans up to Rs. 25,00,000.
