You can research the options of various banks or NBFCs by putting them in one place and be eligible to get loan from any other lender. Along with this, we are also telling you some tips, which will help in approving your loan application.
Find out the reason why your loan application was rejected. Every bank’s credit check, risk profiling and lending rules are different from each other. The real reasons are always hidden and ignored. Lenders usually tell you why the loan application was rejected. The reasons may be low or poor credit score, non-repayable income and high debt and income ratio.
CIBIL Report corrected
There may be a problem with your credit report. If you notice a flaw in the credit report, get it corrected by the CIBIL agency. Keep checking your credit reports regularly. You can also check online credit report.
Make your credit before applying again
You need a personal loan of Rs 2 lakh for 3-5 years. If you have a good credit, you will get a loan at an interest rate of 12 percent. Whereas if there is excellent credit, then the interest rate can also be 10.9 percent.
Pay credit on time
Credit repair history also plays an important role in credit score. If the payment is late then it is reflected in your credit report.
Keep credit card balance low
Credit usage means the credit limit is divided by the total balance of the credit card. This is also an important factor in credit score. If your credit balance is high, then repay them as soon as possible.
Avoid more inquiries
If your loan application has been rejected, then you may have to go round with many lenders to get it approved. But every time you apply, the inquiry will increase. Due to having many inquiries in a short time, many lenders can show you the red flag.
Set the limit for outstanding loans
Debt-to-income ratio (DTI), like income, is a measure of how much money you can borrow. This not only shows the lender that you can repay the loan every month, but you are also responsible for the money. Being more DTI means that you are using more money to pay other debts.
Show your employment stability
Lenders usually consider various sources of income, but not always. The source of irregular income is not good for this. The lender can also demand that the customer has been in some well-known company for some time like 2 or 3 years.
Keep the necessary documents with you
The demand for documents may vary from lender to lender. Nevertheless, we are telling you a list of basic documents.
– Properly filled personal loan application form
– Address proof (copy of passport / VoterID / driving license / Aadhaar)
– Last 3 months bank statement (last 6 months passbook)
– Latest salary slips
– Form 16
– Basic KYC documents like passport copy, voter ID, driving license, Aadhaar card
– Salary Certificate
– Income tax returns of the last two years (if you have your own employment)
Verify your information
Always double check the home loan application before submitting your details. If even small information is missed then the loan application can be rejected. If the lender is not able to verify the information, then he will not give you a personal loan.
We hope that these tips will help in the approval of your personal loan. However, if your loan application gets rejected, you can switch to many other options like credit card, unsecured personal line of credit, peer to peer loan, salary advance, small business loan etc. Meanwhile, keep improving your credit score so that your loan application is not rejected in future.