Securing a personal loan is essential, especially when you need urgent funds. While a personal loan app makes credit easy to access, getting approved requires some eligibility checks. In line with RBI guidelines, lenders now use advanced in-app features to instantly verify your eligibility by scanning your profile.
To get your loan approved easily, focus on some key factors, such as having a good credit score and low debt. This guide explains how to improve your chances of approval and what to keep in mind before applying for a loan.
Why Maintain a High CIBIL Score for Your Personal Loan App?
Your credit score is the first thing a lender checks to decide if you are a safe borrower. A high score proves that you have handled your past debts responsibly and can be trusted with new funds. Most lenders, though, require a score of 650, but they prefer a score of 750 or higher to offer you the best interest rates and higher loan amounts.
- According to the TransUnion CIBIL Credit Industry Insights Report, approximately 79% of all approved personal loan are granted to individuals with a credit score of 750 or higher.
- Check your credit report regularly for any mistakes in your payment history and get them corrected to keep your score high.
- Always pay your credit card bills and EMIs by the due date, as even one late payment can lower your score significantly.
What Documents are Needed To Speed up the Loan App Journey?
Providing accurate, clear documents helps the lender verify your identity and income without delay. In the current digital world, having your e-KYC ready is a major advantage for instant approval.
- Keep KYC updated: Ensure your Aadhaar and PAN card details are up to date and linked to your active mobile number for quick OTP verification.
- Provide bank statements: Lenders usually ask for the last 3 to 6 months of statements to review your monthly income and spending habits.
- Share salary slips: If you are a salaried professional, having your recent salary slips ready will prove your employment stability and repayment capacity.
How To Lower Your Debt-To-Income Ratio to Boost Approval Chances?
Lenders look at your Fixed Obligation to Income Ratio (FOIR) to see how much of your monthly salary goes toward paying existing debts. A lower ratio means you have more money left to pay a new EMI.
- Clear small debts: Pay off minor credit card balances or small outstanding loans before you apply for a new one to improve your ratio.
- Monthly Debt below 40%: Try to ensure that your total monthly debt payments do not exceed 40% of your take-home pay.
- Avoid new credit: Do not take on any other new debt right before applying for a major loan, as it makes you look credit hungry.
Pro Tip: Always check your Credit Health Report for closed accounts that still appear as open in your history. Correcting these minor errors before you apply can significantly improve your score and your eligibility for a higher loan amount.
When To Avoid Making Multiple Loan Applications?
Every time you apply for credit, the lender performs a hard inquiry on your profile. Making too many applications in a short period can make you look financially unstable. Wait at least three to six months between different loan applications to allow your credit score to recover from the previous inquiry.
Instead of applying everywhere, use the free eligibility tools available on a personal loan app to see your chances first. If one lender rejects your application, find out why and address it rather than immediately applying to five other lenders.
Where Can You Find Your Pre-Approved Offers for a Personal Loan?
Many trusted financial platforms offer pre-approved deals based on your existing relationship and credit history. These offers usually come with minimal documentation and much faster processing times, often resulting in instant disbursal to your account.
- Log in to your financial portal to see if there are any exclusive offers tailored specifically for your profile.
- Be sure to review the Key Fact Statement for these offers to understand the Annual Percentage Rate (APR) and the overall cost of the loan.
- Pre-approved loans typically offer flexible repayment periods, ranging from 12 to 108 months, which can be adjusted to fit your monthly budget.
To Summarise
Securing funds through a personal loan app starts with financial discipline. Following these steps signals to lenders that you are a low-risk borrower. Utilising a trustworthy loan app, such as the Bajaj Finserv App, simplifies the process of managing your application. Since your financial progress depends on making well-informed decisions, begin improving your profile now to expedite your personal loan approval.