A Personal Loan is beneficial during urgent financial requirements. You can get one without any collateral and with minimal documentation. While many financial institutions offer these loans at competitive terms and conditions, getting approval is not a child’s play. When you submit a loan application, you must fulfil several eligibility conditions, provide documents, and pay fees and charges to get instant approval. If you urgently need money through a Personal Loan, cut out all possible delays using these tips.
Submit a Digital Application Online
Applying for a Personal Loan using a website or app is the fastest way to secure the required funding. You will receive a confirmation message and a reference code once you provide the necessary information and upload relevant documents. The loan company will approve the loan after verifying your documents, profile, and credit history. While traditional loan procedures take around a week to complete, digital lenders approve them in a few hours. You may also look for a pre-approved loan offer with your existing lender or bank to accelerate the process further.
Maintain a Decent Credit Score
The credit score determines your creditworthiness. It can be an added advantage to get faster loan approval. Hence, build and maintain a decent credit score to convince lenders of your credibility. Since Personal Loans are unsecured loans, lenders largely rely on this 3-digit number to evaluate your application.
A good credit score gives you a low-risk profile, which means you have minimal chances of loan default. It increases your chances of getting quick approval at better interest rates and nominal processing charges. Since your repayment habits are the major contributors to your credit score, activate the e-mandate to pay the EMIs each month automatically. However, ensure maintaining a sufficient balance to avoid bouncing your standing instruction.
Make Only One Loan Application at a Time
When you need urgent money, you may apply with several lenders to boost your chances of loan approval from at least a few of them. However, lenders see this strategy as a credit-hungry behaviour. As a result, they may reject your loan application. Moreover, multiple loan applications pull several hard enquiries on your credit report, and numerous loan rejections adversely affect your credit score. Instead, comparing various loan plans and applying for the most appropriate one will be a better way to go.
Prepare the Required Documentation
Before submitting your Personal loan application, ensure preparing all the necessary documents efficiently. Although lenders provide Personal Loans with minimal documentation requirements, you must check their official website to find the list of required documents. Keeping them handy will save your processing time, attracting faster approval. These often include your identity, residence, income, job continuity proofs, etc.
Provide Accurate Data
Providing income and personal data accurately will boost your loan approval chances by making the entire process hassle-free and smooth. For instance, if you have multiple income sources, provide their details accurately to showcase a sufficient loan repayment capacity. Also, if you pay rent, provide your rental agreement to avoid wasting time furnishing it later.
Apply for an Appropriate Loan Amount
Applying for a loan amount like a 1 lakh personal Loan, 2 lakh personal Loan, & 3 lakh personal Loan higher than your repayment capacity leads to outright rejection. Since these are unsecured loans, you must consider your income and financial obligations to decide upon an easily manageable loan amount. Also, consider your regular expenses, current dues, chances of increased expenses, pending salary hikes, etc., when assessing your repayment capacity. Your debt-to-income (DTI) ratio is the percentage of your monthly obligations in relation to your earnings. Maintaining a DTI ratio of less than 30% is a good strategy. The lower your obligations, the higher your chances of loan approval.
Compare to Find the Right Lender
Different lending institutions have different loan charges and eligibility conditions. Therefore, instead of randomly making multiple loan applications, compare them online and select a lender with eligibility conditions you can easily fulfil. Moreover, compare their interest rates, loan amounts, processing charges, prepayment fees, customer service, etc., to choose an option that best fits your bill.
Apply With a Co-Applicant
Submitting a loan application with a co-applicant enhances your eligibility, resulting in a swifter and faster loan approval. If you have a low income or poor credit score, consider adding a co-applicant with a good income or decent credit score to boost your loan eligibility. It improves your chances of getting loan approval on the first attempt.
Choose a Shorter Repayment Tenure
While lending institutions offer flexible repayment terms, try to choose the shortest possible loan term with easily affordable EMIs. When you agree to repay the loan in a shorter period, lenders view you as a low-risk borrower with minimal chances of default.
Repaying the loan quickly has dual benefits: improving your credit score and reducing the lender’s risk, making them feel safer. However, consider your monthly earnings and financial obligations before opting for a loan term. A shorter tenure will increase your EMI amount. So, you must ensure you can easily accommodate them in your monthly budget. A Personal Loan EMI Calculator can help you calculate the EMI amount for various loan terms, letting you choose a tenure with budget-friendly EMIs.
Apply With Your Existing Lender
Making a loan application with a loan company with whom you already have a positive relationship will help you get quicker approval. However, ensure you have a solid history with them with timely loan repayments. Your existing lender also understands your creditworthiness and financial stability, encouraging them to approve your loan quickly. They may also offer pre-approved loans based on your eligibility, repayment history, and creditworthiness.
Although obtaining quick approval is more challenging than it seems, following these tips will boost your chances significantly. While a Personal Loan is an urgent requirement in most cases, it is advisable to take time, research, compare, and make an informed loan application. Hero FinCorp is a reputed NBFC offering instant Personal Loans with ample loan amounts, competitive interest rates, flexible repayment terms, and favourable terms and conditions. Apply online through the website or app to get quicker approvals without complications.
