Personal loans are among the most accessible financing options today and are easy to avail of as they come with only a handful of eligibility requirements. As unsecured forms of financing, availing these loans, however, need you to fulfill all requirements laid down by the lender without a miss. While lenders remain specific when it comes to eligibility fulfillment, other aspects related to the borrower’s profile also impact the loan availability, affecting the chances of personal loan application approval or rejection.
It is thus prudent that you keep all aspects of your borrowing profile intact to maintain the necessary creditworthiness for easy loan approval. It can improve the chances of instant approval of your personal loan. Let’s first check out the personal loan application process before moving on to the ways that would help improve your approval chances.
Instant personal loan application process
Whether getting a personal loan for travel, education, or any other purpose, completing your personal loan application is possible both offline and online. However, for the purpose of instant funding, it is advisable to go with a digital application as it streamlines the entire processing, from application completion to documentation, borrower assessment, and approval. Below are a few simple steps that should help complete your personal loan application online.
Step 1: Visit the official website of your selected lender.
Step 2: Next, navigate to the personal loan page and click on the ‘Apply Now’ option. You can also send this application through a dedicated personal loan app if your lender provides one.
Step 3: This will redirect you to an application form, where you will need to fulfill personal, professional, and financial details. Make sure to fill in all such information accurately.
Step 4: Next, provide your loan requirement with details like the amount sought and a suitable repayment tenor for it.
Step 5: Once applied, a lender representative will connect with you for verification and doorstep document collection.
With all the eligibility and documentation parameters in place, you can expect your instant personal loan approval in the next 24 hours.
It is always prudent to take necessary measures before applying so your loan approval comes instantly without any hassle.
Tips to receive instant personal loan approval
Whether availing of a small personal loan or a high-value one, the following tips can help improve your chances of instant approval.
- Apply with a high credit score
A minimum credit score of 750 is required to avail of unsecured advances like instant personal loans. Such a score serves as an indicator of an individual’s high creditworthiness and disciplined financial habits.
It is always advisable to maintain this credit score for a personal loan before applying. In case you hold a lower score, you can take necessary measures for improvement and wait for up to 6 months before applying, so it reflects on your score adequately.
A high credit score also helps secure attractive personal loan interest rates based on the indicated creditworthiness.
- Document all income sources
Lenders often consider an applicant’s income as a criteria for loan approval as it indicates sufficient availability of finances to meet the liability. It is thus always wise to document all your income sources when applying as it will indicate a higher income capacity, improving your chances of quick loan approval. Such paperwork can include all primary and secondary documents, including your salary, rental income, profits from investments, and the likes.
- Maintain your debt-to-income ratio under 50%
The debt-to-income ratio, also known as fixed-obligations-to-income ratio (FOIR), determines the percentage of your monthly income utilised towards fixed monthly liabilities. Ideally, the ratio should be maintained at under 50% and is one of the simple ways to manage your debt.
Anything exceeding this mark increases the weightage of existing liabilities, making new repayments burdensome and increasing the borrower profile risk. If your FOIR exceeds 50%, you can initiate to repay existing debts, so your eligibility for a personal loan improves.
- Keep a check on the credit utilisation ratio
Another crucial determinant of an individual’s credit habits, the credit utilization ratio, indicates the overall dependency of individuals on different credit instruments. A high credit dependency increases the overall risk of defaulting on loan repayment. Financial institutions thus consider a credit utilization ratio under 30% as the ideal mark for the purpose of extending unsecured financing like personal loans. Make sure to check your credit utilization ratio before applying for the advance and bring it under 30% to improve your chances of quick approval.
You can do so by cutting down your credit usage from the total availability. For instance, if your credit card’s available credit limit is Rs.2 lakh, make sure only to use 30% of this limit on total monthly spending, i.e., Rs.60,000.
Along with these, you can also initiate to maintain timely repayment of existing credit and avoid making multiple personal loan applications within a short span. In this context, pre-approved personal loans can be of great help.
When applying, do so through pre-approved offers provided by lenders like Bajaj Finserv that simplify loan processing and help save time. These offers are available on personal loans, credit cards, and business loans, along with several other financial products. You need to provide essential contact details only to check your pre-approved offer.
Reputed lending institutions also provide dedicated financial tools like interest rate calculators that help make affordable borrowing decisions. Use it to determine the EMIs payable along with total interest as per your affordability before applying for better chances of quick approval.
