A personal loan is an unsecured type of loan taken by persons to meet their several needs. It can help you to secure funds very fastly for your future expenses. You can obtain these loans without any hassle as they are unsecured and permit you to apply online with a few clicks. Besides the rate of interest for a personal loan is very low as compared to any other type of unsecured loan, which makes it an attractive option. For planning your repayment of the loan you just need a personal loan calculator which is also called EMI calculator.
Personal Loan Eligibility: 6 tips to improve your Cibil
Personal loan eligibility depends on many factors and also the rates of interest charged differ from person to person. Before applying for personal loans below are the six tips that may improve your chance to get a personal loan at an affordable rate of interest.
Individuals usually take such type of loan to fulfill expenses like:
• Education expenses
• Wedding expenses
• Medical expenses
• Travelling expenses
• Festival season expenses
• Debt consolidation
1) Keep your debt earning ratio low
Maintaining a high percentage of your income for repaying debt decreases your creditworthiness for obtaining new loans. In that cases, the lending institutions or lenders may not approve your loan request. In case, they approve you may get that loan at high rate of interest. Commonly the debt earning ratio should be less than 35%. So before applying for the personal loan make sure that you have no liability to meet.
2) Keep your credit score good
Your credit score reflects your credit history which means how much debt you take and repay. It is common among all the banks and lending institutions to report your credit history to the credit bureau, which gives you a credit score on the basis of the factors reported by the banks. That is why a healthy credit score becomes necessary. If you have a healthy credit score your chance of obtaining the loan increase. A credit score of at least 700 works very well in this respect. For obtaining a good credit score always pay your bills and EMI on time and use up to 30% of the credit limit extended.
3) Make a request for a joint loan with children and spouse
This is an awesome option in case when your credit profile is not sufficient to obtain a personal loan. When two people apply jointly their incomes are added together, and paying capacity is decided jointly. If the credit score and income of the spouse is high, it will add to your repayment capacity and help you to obtain the personal loan at a reasonable price. Applying with children is even better as young blood granted loans more efficiently.
4) Disclose all your income sources
If you show only your basic income, it may reduce the chance of loan approval. Showing higher income is a good option for securing the loan. Higher-income shows good paying capacity and improves your eligibility. Apart from basic incomes, other sources of income can be dividends and rent.
5) Avoid applying for multiple loans at a moment
Applying for multiple loans at a time can spoil both your credit reputation and your credit score granted by a credit bureau. As a result of which your loan request may be disapproved. So before applying for personal loans it is necessary to understand and read the eligibility criteria of lending institutions and apply only at the place where you have a great chance of success.
6) Choose a long-duration tenure
Personal loans are granted for a short duration or for a long duration. It is advisable to choose a long-duration personal loan as it helps in breaking your installment into small amounts and consequently reduces your repayment burden and has less impact on the debt earning ratio.
By keeping all these tips in mind one can increase the chance of approving personal loans. Always take a loan of an amount that you can easily repay. For further information comment below and get other related information.