Getting an instant approval on the loan application will not be the cake-walk. The lenders are using stricter criteria for the loan approvals in economic troubles came by the pandemic. On the contrary, financial requirements of the people are increasing.
- Make sure your have sufficient income to show
Your income is one important factor that the loan lenders consider when approving the personal loan application. If, the earnings are not sufficient to pay Equated Monthly Installment, then your application will get rejected.
- Correct errors present in the credit report
You may always view credit report without any cost, one time in a year. You may always pay for credit information report. This report will have errors & misses. So, try to address such errors just by taking a right action in improving the creditworthiness. If your credit report has smaller mistakes, higher will be the chances to get approved for the personal loan.
- Cut down on current liabilities
Next way to improve your odds of the loan approval is to limit the current liabilities. It can reduce the ratio of debt-to-income that is the important factors you must consider for the loan approval. Debt-to-income tells you exactly how much to borrow with the current income. Such measure gives your lender a little idea about how much you are able to pay & how much you can afford.
- Pay off any existing loans
Even though your income is enough to pay an EMI, having a lot of debt might affect your loan application approval. Paying off the current loans before you apply for one is highly recommended.
- Do not make any errors in your loan application.
Make sure you mention right personal details & provide documents required and requested in your personal loan before you submit your application to a lender. Suppose the lender finds missing and incorrect information, they will reject your application. Therefore, don’t hurry when you are filling an application form as rejection of a loan will prove one big hurdle for an approval of loans in future too.
- Consider all your options
That depends on the creditworthiness; you might need the co-signer for getting approved for the personal loan with the decent rate of interest. Suppose you cannot find the co-signer or lenders you are considering do not allow the co-signers, you might have an option to get the secured loan rather than unsecured one.