In recent years, the Government of India has taken several initiatives to promote financial literacy amongst the citizens. Therefore, citizens are not only more financially aware but also less reluctant while availing credit products from leading financial institutions. Personal loans are one of the most popular credit products amongst working-class professionals in our country. Easy application process, zero collaterals, and quick disbursal are some of the features of a personal loan that make it a preferred choice of financing to meet the financial requirements. However, since personal loans are unsecured loans, banks and other financial institutions have standard eligibility criteria for applicants of personal loans. Therefore, in order to increase the approval chances of their personal loan application, it is essential for borrowers to boost their personal loan eligibility.
Let us have a quick look at some important tips that can help you boost your personal loan eligibility:
- Maintain a positive repayment history and high credit score
- One of the significant personal loan eligibility criteria is the applicant’s repayment history. The repayment history of the borrowers is recorded through their credit report. Therefore, if you are planning to avail a personal loan, make sure that you have a positive repayment history.
- By making timely EMI payments, you can successfully create a positive repayment history. If you miss on paying even a single EMI, it would reflect in your credit report for a long time, thus affecting your credit score.
- The credit score plays a vital role in deciding whether your loan will be approved or not. If there is no default in your loan repayment history, it would boost your credit score, thereby increasing your chances for loan approval.
- Moreover, if you have an impressive credit score for a regular period of time, then the lender may consider you as a credible applicant. This will help you avail a comparatively higher loan amount at a reduced rate of interest.
- Choose a longer tenure
- Loans with longer tenure give the additional time to the borrower to repay it. This increases the chances of timely repayment of the personal loan, thereby reducing the risk for the lender.
- Therefore, if you increase the loan tenure, there is a rise in your personal loan eligibility. With the help of an online personal loan EMI calculator, you can calculate your monthly installments beforehand. This will help you manage your finances wisely, thereby allowing you to repay the loan amount within the stipulated tenure.
- Pay off all existing loans
When applying for a personal loan, try to ensure that you don’t have any other loan repayments outstanding. If you already have existing loans, then the lenders may consider you as a risky borrower. This can hamper the chances of your loan approval. Therefore, it is always advisable to pay off all existing loans before applying for a personal loan.
- Alternative source of income
- Financial institutions will check your monthly income before approving your loan application. Therefore it is always good to have a passive source of income to boost your personal loan eligibility. This alternate income can be generated through various ways. For example, if you own any property, you can consider renting it out to generate a passive income.
- If you have a working spouse, you can consider applying for a joint personal loan in order to increase your personal loan eligibility. Availing a joint personal loan also decreases the liabilities of repaying the loan. This helps in lessening the financial burden while repaying the loan amount.
- Moreover, you should also provide an updated record of your variable pay while applying for a personal loan. Variable pay is a benefit offered by most employers in the form of bonuses, incentives, or commissions. Some financial institutions take this record into consideration while determining your personal loan eligibility.
- Pay your credit card bills on time
If you use credit cards, make sure that you pay your bills on time. This will not only help you avoid a debt trap but also reflect that you are financially disciplined. Thus, lenders may consider you as a low-risk applicant while evaluating your personal loan application. This will enhance the approval chances of your loan application.
- Do not apply for multiple loans simultaneously.
When you apply for a personal loan, financial institution raise an inquiry with a credit bureau to assess your default risk. Such enquiries are hard enquiries and are recorded in your credit report. This makes you a high-risk applicant and lenders may reject your loan application. Therefore, it is recommended to compare various loan offers provided by different financial institutions before applying for a personal loan. You can also make use an eligibility calculator to check loan eligibility online and apply for a loan that suits your needs.
Additionally, you can also consider applying for a personal loan with a lender that has minimum personal loan eligibility criteria. This will subsequently increase your chances of getting an approval on your loan application. Simple eligibility criteria is yet another advantage of availing a Bajaj Finserv Personal Loan.
Let us have a look at some of the basic Personal Loan Eligibilty criteria:
- You must be a resident of India
- You must be between 23-55 years old.
- You must be an employee at an MNC, public or private organization
- You must earn a regular income and meet the minimum salary requirements for the city you reside in.
- Once you meet the eligibility criteria, you only need to submit your basic documents to complete the application process.
The basic documents required to avail a personal loan available are mentioned below:
- Aadhar Card/Passport/Driving License.
- PAN Card.
- Bank Statement – Last 3 months.