How To Improve Your Personal Loan Eligibility In India
In this article, we have mentioned the Personal Loan Eligibility In India.
In recent years, the inflation rates in India have skyrocketed beyond belief. Although, there are several reasons; however, the Covid-19 pandemic has played a pivotal role in giving birth to this circumstance. Thus, at such times, when the basic cost of living has increased, it has become difficult for the middle-class Indian population to manage their expenses wisely.
However, thanks to the personal loans online provided by new-age banks and NBFCs (Non-Banking Financial Companies) people can now easily acquire capital from the comfort of their homes or office. Further, the personal loan interest rates charged by these financial institutions are way lower compared to traditional financiers.
Further, the new-age financial institutions provide a variety of additional perks such as flexible repayment tenure, higher principal amounts, online tools, etc. However, to reduce the risks involved with providing financial assistance, these financial institutions have set personal loan eligibility criteria that every applicant must fulfil to be able to qualify for the loan amount.
Thus, in today’s article, through extensive research, we have found a few ways through which you can improve your personal loan eligibility in India:
- Build your credit profile
Your credit profile plays an extremely important role in determining your personal loan eligibility in India. After all, having a good credit profile helps financial institutions to access your creditworthiness, and will greatly boost your chances of qualifying for an instant loan in India. A good credit profile should have a diverse credit profile such as a long-term loan account, a short-term loan account, 2 credit cards, etc.
- Improve your credit score
When you apply for a personal loan in India, the first thing that every financial institution will do is fetch your credit score from credit rating bureaus. Thus, before you apply for an instant loan ensure that you have a good credit score i.e. anything above 750. You can easily improve your credit score by timely repaying all your previous and current instalments on time. Further, also make sure to timely check your credit report for any errors and rectify them. Other than that, if you are a frequent credit card user, ensure that your credit utilization ratio is below 30% of the available credit line. Also, make sure to never apply for personal loans simultaneously through multiple financial institutions; because doing so, it will result in hard enquiries on your credit profile, which in turn will harm your credit score.
- Source of income
Your income stability is yet another factor that the new-age banks and NBFCs (Non-Banking Financial Companies) check when determining your personal loan eligibility in India. Thus, before applying for a personal loan, ensure that you have been working with your company for at least a period of 2 years. Other than that, you can further boost your personal loan eligibility by showing an alternate source of income. This alternate source of income can be the rent from your second property or your spouse’s income source.
