A personal loan is offered to you based on your repayment ability. And do check the same before you apply for the loan. Because if you are highly eligible for a personal loan, a lower rate of interest will apply to your loan and reduce your outgo as a result. This is because of the less risk you pose to loan repayment. An applicant with a high income and no record of payment default is more likely to repay the loan in full compared to one with a poor credit record. Read this page and know how to increase your Personal Loan Eligibility.
Tips to Follow for High Personal Loan Eligibility
You can increase your Personal Loan Eligibility by implementing the below tips –
Check Your Credit Score
It is important to check your credit score before applying for a loan. Because you may not know the current status of your credit record. And due to some previous payment defaults, the score may have been reduced. So, check your credit report and see if the score is above 700. Because you may require a score of at least 700 to be highly eligible for a personal loan.
To increase your score, you have to do the following –
- Pay the due bills or EMI
- File a dispute with the credit bureau in the case of technical errors
And when your score meets the Personal Loan Eligibility, apply for a loan. This way, you can save yourself from high interest payments.
Borrow Personal Loan Jointly
A co-borrower can increase your Personal Loan Eligibility. So, if you’re going to apply for a loan, do so with your spouse or parent. But make sure they have a good record of repayment. Otherwise, there won’t be many benefits available for you.
When there is a co-borrower in a Personal Loan, he/she is liable the same way as the primary borrower for the repayment. So, if the primary borrower loses his/her job and isn’t capable of repaying the loan, the co-borrower steps in and completes the repayment.
Use EMI Calculator
Most of us don’t know the advantages of the EMI calculator. But it can help you borrow an amount under your budget. If your high loan amount comes with a low interest rate, manage it under your budget with the EMI calculator.
Insert your loan details and enter different tenures to see at which you’ll get the lowest EMI payment.
Let’s see the below example and know more about it.
Simran, a 30-year old MNC employee, needs lump sum money. Well, her credit record is not so good, so she thought the Personal Loan Eligibility will be less. So, she uses the EMI calculator and sees whether the desired amount can fit under her budget. Simran enters the following details inside the calculator –
- Loan amount – INR 4 Lakh
- Interest rate – 15.00% per annum
- Tenure – 3 years
And she gets the EMI of INR 13,866 and a total interest of INR 99,181.
From the above example, you can see how Simran uses the EMI calculator in her favor and decreases the loan repayments.
How to Use These Tips While Applying for a Loan?
When you’re applying for a loan, follow these steps –
- Check your credit score online and see whether you qualify for the Personal Loan Eligibility. And if not, don’t apply and prevent unnecessary score reductions
- Check the Personal Loan Eligibility criteria of the lender and see if you tick all the boxes
- If your monthly income is slightly more than the bank’s requirement, there is a chance of good Personal Loan Eligibility.
- Before confirming your loan details, do use the EMI calculator to see whether the chosen tenure offers you lower repayments.
- Visit the bank branch and talk about the personal loan details with the representative