Having a personal loan is not everyone’s cup of tea. People come up with different thought processes. For some, it is a fraud, and others have useful guidance about how we can take a correct approach towards getting it.
There are lenders such as SBI personal loan, HDFC personal loan, or ICICI Personal loan offering fantastic personal loan deals. Nevertheless, the question is, do you know the secrets of taking a personal loan? For instance, what to do when the credit score is low to apply for the loan? Alternatively, how to improve the chances of getting a personal loan approved?
Therefore, in this post, we are going to tell you about those secrets. After reading them, you will be ready to apply for an instant loan with an improved chance.
The secret of getting a personal loan with a lower CIBIL score
When focusing on the CIBIL score, there are three things to keep in mind. The score, its impact, and how it affects the application. Let us tackle them one by one.
The CIBIL score (Credit score) ranges from 300 to 900. 300 is the lowest score, and 900 is the highest score. Let’s check out to know where your score falls.
|What did it mean?
|330 – 550
You can see your score in determining the chances of getting the loan. Now, the second thing, the score impact. In simple terms, a low credit score means a higher rate of interest and processing fee. And a higher score indicates a low-interest rate.
another interesting question in mind would be. “Despite being a low score, how could you get approval?” There are two ways to do it. The first one is to offer additional income proofs. It will improve the odds dramatically while keeping the rate of interest low.
The second way is to offer collateral if one is in a position to provide it. If not collateral, then add a co-applicant or guarantor, again reducing the lender’s risk. These two ways will help you immensely. There is one more way, but it is not popular. i.e., You could opt for a lower personal loan amount to diminish the lender’s risk.
Lenders such as SBI personal loan, Central bank of India’s loan offers a lower interest rate. You could start applying with these lenders to get the loan. I hope this secret will help you in obtaining a personal loan. Now, let us move on to the next situation.
The secret for improving the approval chances for a personal loan
The majority of borrowers always wonder how they could improve their chances for personal loan approval. The secret for this thing is not complicated but a matter of focus.
The first thing to get approval is to focus on a healthy credit score. A solid score helps us on multiple fronts. First, it allows negotiating the interest rate in your favor. The second thing it offers is the flexible loan tenure and possible lesser processing fee.
If you are not in urgency, then take your time to improve the scores. Here are some tips for doing it.
- Get rid of the credit card balance
- Find out errors and inaccuracies in the credit report
- Keep paying the EMIs timely
- Increase the credit limit
- Credit utilization ratio
When you apply, a lender checks the score to decide whether to accept or reject the application. If In doubt, the lender will keep it on hold. For example, when you apply for an SBI instant personal loan, continuously checking the SBI, personal loan status will not help you. For some reason, the application will get on hold. Therefore, having a good score is essential.
The next way is to get a comfortable loan whose loan repayment could be easily manageable for a fixed income borrower. A lender will feel safe and confident if the EMI does not cross 50% of the income.
Never do multiple inquiries. It will project you as a desperate borrower. Compare the offer, loan features, and costs to determine the real cost. Some lenders offer better deals at a lower price. The only difficulty is to find that one lender.
Asking the right questions knowing the right questions is a one-step closure to take the personal loan. Therefore before taking a loan, always analyze these questions, introspect them, and then move further.
- What types of personal loan do you require?
- The knowledge about CIBIL score
- Will you get a cheaper interest rate?
- The loan limitation
- The reason to borrow?
- The real cost of the loan
- What other options do you have?
These questions will open a new dimension for you. Getting the answer will help you in clearing confusion as well as improving the odds.
I hope this little wisdom of nuggets will help you in getting the ideal personal loan. In the end, we would like to highlight a few cautions and do not sign the loan paper unless you have read it from top to bottom. Always research the lender, finding out if it is legit or a fraud. Taking precautions will save you from unnecessary losses.