Everything comes for a price and free lunches don’t exist! With rising inflation, there have been times when the prices of commodities and services were so high that it became almost impossible for the common man to bear their expenses. To help people improve their standard of living, the concept of personal loans emerged.
What is a personal loan?
A personal loan is basically an unsecured loan where the borrower is not required to pledge any collateral asset for securing the loan. You can opt to avail personal loans from lenders for various needs like travel, medical emergencies, education, home building or purchasing commodities like automobiles, phones, etc.
Personal loans are convenient and easily accessible. In fact, in this era of the internet, availing personal loans has become even simpler! You can apply for personal loans online without having to visit an institution for the purpose. You can now apply for a personal loan online with Tata Capita.
How to improve personal loan eligibility?
A personal loan cannot be availed unless a person is eligible for it. Therefore, one of the topmost considerations for applicants is to be aware of and ensure their eligibility for loans.
There are certain things borrowers usually consider in order to improve their eligibility for application or approval of personal loans.
The loan applicant’s income is a major consideration of all lenders. The reason is simple. If your income is high, you are more likely to settle the loan without any hassle. Borrowers need to ensure that they can show a minimum income that will satisfy the lender. The higher the income, the easier it is for you to get a loan approved.
- Credit history
In order to have your personal loans approved without any hurdles, the second thing you need to ensure is that you have a clean past record with banks and lenders. Lenders usually prefer loan applicants who religiously maintain good relations with their creditors. So, in order to increase your personal loan eligibility, do make sure that you possess a sound credit history.
- Credit score
As a personal loan applicant, you must make sure you have a good credit score. Ideally, you need to have a score above 700. You can do so by paying your bills on time so that your debt-to-available credit ratio is maintained.
- Employment and income source
Lenders tend to consider the type of employment of a personal loan applicant. This gives them a sense of security and assurance about the credibility of the applicant. Mostly they prefer borrowers who have full-time jobs and reliable employers. Borrowers need to make sure that the company for which they work has a good reputation, as this can drastically improve their chances of approval.
Borrowers certainly need to follow the famous quote, “Honesty is the best policy”. Lenders will simply reject your application if they find you dishonest in your loan request. If your personal loan application gets rejected, it will directly impact your credit history for future loans as well. As a rule of thumb, always present facts just the way they are.
It is easy to get a loan approved, if you meet the above factors. Nowadays, most lenders offer great transparency and easy accessibility to personal loans. The next time you need to make a big purchase, don’t forget to apply for personal loans.