Tips for Securing an Instant Personal Loan

A financial emergency can come unannounced. It can be an unexpected medical emergency or a marriage function in the home.

You could need funds to go on your dream vacation. You might need money to bridge the cost between your home loan and the cost of your new house. Funding your child’s education could be your immediate priority. The best way to raise immediate funds is to go for a personal loan. Today, you have banks and other financial institutions offering via instant personal loan apps. Besides, there are smartphone app-based personal loans that can fetch you money in an emergency. Moreover, almost all the banks offer pre-approved personal loans to selected borrowers, depending on their eligibility levels. Under such circumstances, instant personal loans are available easily. However, a lot depends on the eligibility criteria banks stipulate. Here are some tips that could help you secure an instant personal loan.

Check out your CIBIL score or credit rating.

Banks invariably check for your credit rating from agencies like CIBIL or Experian. Generally, a CIBIL score of 750 or an Experian rating of 800 and above should be sufficient to secure a personal loan. Therefore, the first step towards determining your eligibility levels is to check out your CIBIL score. Let us see how to do so.

1. Almost all banks offer the facility of checking out your CIBIL score through their net banking platforms. Therefore, you can log into your internet banking application and check out if such an option is available with your bank.

2. Alternately, you can get your CIBIL or Experian report directly from the credit rating agency’s website. It could involve the payment of a nominal fee.

3. On receiving your credit report, it is advisable to go through it and check every aspect. There could be errors in reporting that could affect your overall credit rating. You should invariably verify the details even if your credit score is above the threshold level stipulated by the individual banks. It can help you negotiate and get a better interest rate on your personal loan. 

4. If there are discrepancies in your credit report, you can take up the matter with the respective credit agencies by raising disputes on their portal.  

How do you get a good CIBIL score?

1. Your CIBIL score depends on various factors, with your repayment history as the most prominent. Hence, it is imperative to have an excellent repayment record without any defaults. 

2. Your credit utilization is also a crucial aspect of your credit score. If you have credit cards, you should ensure that you maintain a credit utilization of at least 30%. Anything more than 30% could affect your rating. Besides, you should ensure prompt repayment before the due dates.

3. Your credit history is a critical aspect of your credit score. The longer the history, the better the rating is.

4. Your loan inquiries also play a crucial role in determining your credit rating. Hence, it is not a good practice to apply for loans frequently. Having multiple credit cards can also bring down your credit rating, especially if you do not manage your resources properly.

5. Finally, credit rating agencies also emphasise the balance between your secured and unsecured loans. Therefore, it is better to have a good mix of secured and unsecured loans to ensure a better credit rating.

Suppose your score is not up to the eligibility criteria stipulated by the banks. In that case, it is not advisable to apply for a personal loan from a particular bank because the chances of rejection are high. Besides, it can also lower your credit score further. Under such circumstances, you can look out for the instant personal loan apps available on the internet. These companies approve personal loans for borrowers with low CIBIL scores, but the interest rates could be higher than the banks.

Check your personal loan eligibility.

All banks offer a personal loan eligibility calculator on their websites. These calculators are easy to use. All you do is submit info like your income, liabilities, and other crucial details. You get your personal loan amount eligibility within no time. Moreover, it gives you an idea about the amount of loan you can apply for. Almost all banks offer personal loans to salaried and self-employed individuals between 23 to 55 years of age. 

This calculator also enables you to estimate the personal loan EMI. Generally, banks for a net take-home pay of 50% of the gross income after deduction of all your liabilities, including the proposed personal loan. 

Choose your lender carefully.

It is advisable to opt for a lender with simple eligibility criteria to get an instant personal loan. It is always better to select the bank where you have an existing customer relationship like a salary account, savings account, or even a housing loan. You can avail of the benefits of lower interest rates for existing customers, especially if you have a salary account with the bank.

One should understand that the instant personal loan apps stipulate low eligibility, but the interest rates could be high.

Keep your documents ready.

Documentation is critical to applying for any loan. Banks have straightforward formalities to comply with. You should keep the appropriate documents ready. These documents include proof of your identity, address, employment/occupation, and income. Hence, you should keep your PAN card, Aadhar card, salary slips, IT returns bank statements, and passport size photos ready for immediate submission. It can speed up the approval process. 

Check out your internet banking account for value-added features.

Banks offer pre-approved personal loans to selected customers based on the relationship they have with them. Such loans are usually available on their phone banking app. You can get these loans with a few clicks and minimum documentation.  

A word of advice

Finally, one should note that getting an instant personal loan might be easy. However, ensuring proper repayment of the instalments is critical to maintaining your credit rating. In addition, you never know when an emergency can come the next time around. Therefore, maintaining a clean repayment record can help enhance your eligibility and get instant personal loans in the future.

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