Securing a Personal Loan is easy if you know exactly how to go about it. By focusing on a few key aspects, you can increase your odds of getting that much-needed loan and also get a potentially more favourable interest rate. Read on to discover tips that will help your Personal Loan approval.
When it comes to securing a Personal Loan, a stellar credit score is more than half the battle won. A high credit score not only makes you an attractive candidate but can also secure you favourable Personal Loan interest rates.
- In India, a score above 750 is considered good, but the higher it is, the better your chances.
- To improve your score, keep an eye on your credit report for errors, pay your bills on time, manage your existing debts responsibly, keep your credit card balances low, and regularly check your credit report.
- A robust credit score opens doors to not just swift loan approval but also competitive Personal Loan interest rates.
Balance debt-to-income ratio
- Your debt-to-income ratio directly impacts your eligibility for a Personal Loan. (Debt-to-income ratio is your total loan repayment as a percentage of your take home income) Keep this number as low as possible to increase your chances of approval.
- Using a Personal Loan EMI Calculator will help you estimate monthly payments and evaluate how the new loan will impact your financial health.
- A debt-to-income ratio under 40% is viewed favourably by lenders. For example, if you earn ₹1 lakh a month and your total monthly debts are ₹30,000, your debt-to-income ratio is 30%, making you a viable candidate.
Correct loan amount
- Selecting the right loan amount is crucial. Overestimating your needs can lead to a debt trap, while underestimating may not solve your financial problems.
- Axis Bank's Personal Loan allows you a loan amount of up to ₹40 lakh with a maximum tenure of up to 60 months. What's more, the interest rate starts from as low as 10.49% p.a., with minimal processing fees of up to 2% of the loan amount plus GST.
- Axis Bank also offers unique features like minimum loan amounts starting from ₹50,000, balance transfer options, and minimal documentation.
Double your chances with a co-signer
Having a co-signer with an exemplary credit history can be a game-changer for your loan application. The co-signer essentially pledges to take on the loan if you default, making the lender more likely to approve your loan.
Demonstrate financial stability
Job stability and a consistent income history can tip the scales in your favour. Ensure you have the last three months of bank statements, two latest salary slips, and KYC documents handy when applying. For those eligible for a pre-approved Personal Loan from Axis Bank, these documents aren't a necessity.
Reason for loan
Whether you need funds for a wedding, medical emergency, or higher education, specifying the purpose can strengthen your application. Axis Bank offers specialized loans like Education Loans with unique features to match your specific needs.
[Also Read: 4 must-follow rules for Personal Loans]
Summing up
Boosting your chances of Personal Loan approval isn't challenging when you focus on your credit score, manage your debt-to-income ratio, select an appropriate loan amount, consider a co-signer, prove financial stability, and articulate the purpose of your loan. So why wait? Make your financial dreams a reality today by following these guidelines to amplify your Personal Loan approval chances!
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision
