These days loans have become the go-to source when you need money for any purpose. For instance, if you’re redoing your home, have a big-ticket medical expense coming up or want to plan a wedding, a loan can help with quick financing. However, sometimes, getting an instant loan can be a challenge, and your application may be rejected.
In most cases, the eligibility criteria can be a hurdle when you apply for a loan. Whether you are using a loan app or a website of a bank, NBFC or financial marketplace, all lenders check to see if you meet all the eligibility terms. They also access your credit history before sanctioning the loan. Factors like how you pay your credit card bills and where you work also matter.
Once you qualify as per the eligibility criteria, you can look forward to getting approval on your application and receiving the loan amount in just a few hours. So, you must know how to boost your eligibility to get access to affordable loans.
Read on to learn about easy and simple ways to improve your loan eligibility and secure a loan.
Enhance Your Credit Score
A good credit score of 750 or more is the key to getting easy and instant loan approvals, especially for unsecured loans like personal loans. You can boost your credit score by repaying your loans on time and paying your full credit card bills by the due date.
Some important points you should keep in mind to boost your credit score are:
● Credit utilisation: Keep an eye on your credit card limit and utilisation. Try not to exceed more than 30% of your total credit limit to avoid seeming credit hungry. Following this tip can help you keep your credit score healthy.
● Active loan accounts: Your credit score is also affected by existing debts. Paying off loans boosts your credit score and increases your credit readiness.
● Credit enquiries: In your search for credit, do not apply for many loans and credit cards at once. This causes a dip in your score as every application you make results in a hard enquiry by the lender.
● Credit mix: Borrowing only one kind of credit keeps your score low. So, try to showcase experience with long- and short-term debt as well as secured and unsecured loans.
Your credit score will go up when you employ these methods, which will increase your loan eligibility.
Choose a lower loan amount
Consider requesting a lower loan amount to enhance your eligibility. Opting for a lower amount decreases the lender’s risk and demonstrates to the lender that you can manage the financial commitment to repay with ease. Remember, a smaller loan also means lower monthly payments, making it easier to meet your financial obligations.
Highlight Extra Income Streams
You can increase your loan eligibility by earning income other than your monthly salary. This makes it even more likely that you can repay your loan on time and assures the lender. This could be from salary bonuses, rental income, a side business, or even gains from investments.
When it comes to qualifying for loans, the more your income, the better your chances! So, you can think about taking up a part-time job or freelancing to show that you have the funds to repay in a stable and responsible way.
Gain Clarity on Your Finances and Habits
Before you start your hunt for a loan, assessing your financial standing is very important. Begin by examining your credit report and score. There are platforms where you can conveniently check your credit report online. Ensure that all the information you see is correct. If you spot any errors, address them promptly. If your score is low, take the time to improve it.
Next, look at your debts and their repayment schedules. Lenders pay attention to your debt-to-income ratio, so lowering your debt load is smart. Pay off all your high-interest debts on priority and try to reduce your balances. This can boost your credit score and improve your loan eligibility.
Next, see your finances and ascertain what you can afford to borrow and what you can pay consistently as EMIs. To do this, look at your fixed monthly expenses and see what you have in excess. Now you can start shortlisting loans.
Remember, you may not qualify for a loan if your monthly debts are more than half of your income. Clearing existing loans and increasing your earnings can improve your chances of getting the loan you need. With all this taken care of, you can get quick and affordable financing.
To shortlist the best loan deals and browse through lenders with simple eligibility terms, check the huge range of options on the Bajaj Markets App. Download this instant loan app from the App Store or Google Play to compare lenders and apply online with ease!
