7 Tips to Get Your Personal Loan Approved

Getting loans approved can be nerve-wracking. We all want to get the personal loan at the lowest interest rate with no hidden costs and minimum paperwork. Selecting the right lender and approaching with right documents are the first and only things that come to our minds. We have been hearing all these from others for a very long time. These two things are valid. In addition to these, take a look at the following tips to get your personal loan approved quickly:

1. Keep paperwork up-to-date

Loan approval is a lot of paperwork and signature. The first and foremost thing you should do before approaching a lender like Money View Loans to get a loan is to keep all the required documents in a file. Do the research online. Check online what all documents are needed for the kind of loan you are applying or call customer care to get the details. With necessary documents in place, getting a loan approved is not only easy, but it’s also fast, too.

2. Make sure your credit history is clean

Credit history (CIBIL score) is one of the first things lenders check while sanctioning a loan. If you have defaulted on paying your EMI in the past, chances are your application won’t be approved right away. You may be asked to submit additional documents. Make sure your credit history in the recent past is clean. Check your credit score while at it. CIBIL score would give you a fair idea where you stand and how easy it would get loan approval. Even if you pay your EMIs and bills on time, it won’t necessarily mean that you’ve a good credit score. Credit score is a sum total of various factors. Know your credit score to be sure before applying. Use this link to check your score.

3. Never apply for loan at multiple institutions at one time

Credit agencies work on a centralised system. All our data is processed and shared by all the financial agencies in the country. Even your bill payment records are checked when you apply for a personal loan. Basically, your financial standing is in question. When you apply for a loan with multiple institutions, you give an impression that you are desperate for money. It is assumed you are short of cash and your application is rejected. A rejection from one institution lowers your credit score. And you are trapped in the vicious circle of bad credit score and loan rejection. So make one loan application at a time.

4. Don’t apply for loans back-to-back

In addition to not making multiple loan applications at one time, it’s important you don’t take too many loans in a short period of time. Say one year. If you have taken a personal loan in the last 6 months and are still paying its instalment, don’t apply for another personal loan. You can apply for a Top-up loan or new loan once you have paid off this loan. If you are in need of funds, you can always ask your family member to avail it. In case it’s not urgent, postpone your loan application. 

5. Double check your income and your combined family income

Personal loans are granted on the basis of your payback capacity. There is a formula for it. Lenders know that you can’t spend all your income on loan EMIs. It’s not a healthy scenario. You need money to run a household. In a healthy situation, your current EMIs shouldn’t be more than 30% of your monthly income. In case you apply with your family member, say, spouse, your total paying back capacity is checked. By adding 2 incomes, you are increasing your chances of getting the loan approved. Do take into consideration your current loan obligations before applying for a new loan.

6. Ratio of secured and unsecured loan

One of the measures of your credit health is the mix of secured and unsecured loans in your portfolio. Home loan and car loans are examples of secured loans as you provide collateral which the lender can forfeit in case you default. Personal loan or loan given by credit card companies are unsecured loans as you don’t provide security against it. A healthy mix of secured and unsecured loan is good. It helps get the loan approved fast. Don’t have a huge amount of unsecured loan before applying for a new loan. Lenders hesitate as they doubt you would pay back their money.

7. Never hide or misrepresent information

Understand that a loan is a legal agreement and you need to be fully transparent. Don’t hide any detail. And never misrepresent information on your loan application. Any mistake or lie would only result in a delay in personal loan approval. Or worse, rejection. Give accurate information to the bank to get the loan approved fast.

If you follow these points, your loan application will be approved without any hiccup or delay. Also refer to the FAQs and loan requirements like in case of Money View Loans to ensure that you satisfy the criteria before applying for personal loan online. In case you’ve any tips for our readers, please share them in comments below.