Personal loans are one of the best options to finance your urgent personal needs. It could be taken to meet different types of expenses including education, marriage, home renovation, vacation, rent, utility bills, etc. No matter what your financial emergency is, a personal loan can help address the same.
A personal loan offers some great advantages over other loans. Borrowers don’t have to deposit any kind of security to obtain funds using a personal loan. Yet another advantage is that there are no restrictions on how the funds will be used. The unsecured and flexible nature of personal loans makes them a good fit for managing any type of expense.
Personal Loans in the Digital Era
In the contemporary era, various financial institutions offer personal loans. The diversity in personal loans has also increased. Lenders offer various types of personal loan products that are customised to suit the borrower’s requirements. Getting a personal loan is easier today as compared to a decade ago, and one of the main reasons for this is due to the advancements in technology which has enabled lenders to bring their services to customers at their fingertips. However, there are certain eligibility criteria that applicants must meet in order to be considered for a personal loan. Most digital platforms have a personal loan eligibility calculator through which users can assess the maximum amount they may be eligible for based on a few parameters. That being said, personal loan eligibility depends on a number of factors such as creditworthiness, financial stability, and so on.
Tips to Improve Personal Loan Eligibility
Fullerton India is one of the leading financial institutions in the lending space that offers a wide range of personal loan products. One can easily opt for a personal loan online by submitting a loan application on its website. However, at times it might happen that we are not eligible for certain loan products due to the internal guidelines set by the company.
Besides this, here are some other tips that you must follow to improve your quick personal loan eligibility for Fullerton India.
- Reduce your Debt-to-Earnings Ratio
The first step towards improving eligibility for any loan product starts with reducing your debt to earnings ratio. So, what exactly is a debt-to-earnings ratio and how does it impact your eligibility? The debt-to-earnings ratio can be defined as the measure of a borrower’s debt repayment capacity given their monthly income. For example, if A has a monthly income of INR 1,00,000 and he pays INR 30,000 as debt each month, then the debt-to-earnings ratio is 30%. Your debt to earnings ratio should not exceed 60%, or most lenders will reject your application. Lowering this ratio to below 30% could make you eligible for personal loans at good terms.
- Add all your Income sources while Filing your Application
Whenever you apply for any kind of loan, the lending institution will ask you about your total income and income sources. A higher-income amount reduces the risk for financial institutions. They are assured that the loan amount will be repaid punctually without any risk of default. Many times, people have different income sources. If you are a salaried employee and have a house which you let out on rent, you might be earning additional rental income. Now, this can increase your total income estimate and help you get the desired loan product. Always add all your legitimate income sources before filing your application. Add the aggregate amount from these income sources. Also, you will need to submit proof of these income sources so make sure that you have everything that’s needed.
- Always opt For a Long-Term Loan
Fullerton India offers its customers the flexibility of a longer tenure on instant personal loan which can be extended up to 5 years. You must always opt for a long-term loan to improve your loan eligibility. A short-term loan would free you from debt sooner and reduce your overall interest payout. However, you must also factor in other monthly expenses, and select a term that would enable you repay your EMI comfortably without any stress.
- Improve your Credit Score
One of the most important things that impact loan eligibility is your credit score. Always be mindful of repaying your dues in time to improve your credit score. A high credit score (over 750) adds to the customer’s credibility and improves creditworthiness. You must check your credit score online before making your loan application. Always try to keep a credit score of at least 750 to avoid rejection.
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- Don’t Apply for Multiple Loans
One of the biggest mistakes that people commit when it comes to borrowing funds is that they apply for multiple loans. Never apply for multiple loans as it can drastically impact your quick personal loan eligibility. It is advisable to use a personal loan eligibility calculator online to get an estimate of the maximum amount one can borrow and check the lender’s required eligibility criteria before applying.