Instant personal loan online can be your best financial option when you have an urgent or non-urgent money requirement. Owing to the increasing popularity of personal loans over the last few years, you will find many lenders offering them an easy online application, quick approval, and fast disbursement processes. Online loan application makes the loan process extremely simple and short so that you can avail one with a few clicks of your mouse only.
Easy personal loans are unsecured loans that you can avail of without pledging any collateral, security, or guarantor. Besides that, you are free to use your approved loan amount for any purpose you want, whether for home renovation, wedding, medical emergency, travel, education, or debt consolidation. Personal loans have competitive interest rates and offer great benefits to the borrowers.
With the important pointers mentioned below, you will understand how you can improve your chances of getting personal loan approval and repaying it on time.
1. Research Carefully and Compare Personal Loans from Different Lenders
With thorough market research, you can understand which loan offer will give you the most benefits. While comparing lenders, look at their loan amount, interest rates, fees and charges, repayment terms, eligibility conditions, documentation requirements, customer service, and other features. You can begin your research by visiting different lenders’ websites and looking at their varied sections. Gather all the crucial details you might need and make an informed decision accordingly.
2. Check the Lender’s Eligibility Conditions Before Applying
The lender pulls a hard inquiry on your credit report to determine your creditworthiness whenever you apply for a loan. Even if you have a high credit score, the lender will reject your loan application if you do not fulfil their eligibility requirements. As a result, you have your loan rejected and also reduce your credit score because of the hard inquiry. Therefore, it is best to check the lender’s eligibility conditions and ensure that you fulfil them before applying.
3. Borrow the Right Loan Amount
Lenders offer personal loans worth lakhs of rupees with easy eligibility and minimal documentation requirements. However, being offered a considerable loan amount does not mean you should take it all. After all, you will have to repay your borrowed amount along with the interest rate. The higher the loan amount you take, the higher the interest amount you will need to pay. Therefore, evaluate your requirements and apply for a loan amount accordingly.
4. Check Your Credit Score Beforehand
Lenders look at your repayment history and credit score to get an insight into your credit management and repayment habits. If you have a credit score lower than 725, the lender foresees a higher risk of default and rejects your loan application. You have higher chances of loan approval and timely repayment if you have a credit score of 725 or above. Therefore, check your credit score before applying and ensure that it meets your lender’s minimum requirement. If not, use the tips mentioned here to improve your credit score.
5. Make a Robust Repayment Plan
Apply for a personal loan only if you are sure you can repay it comfortably without straining your finances. Ensure that your EMIs do not take up more than 30-40% of your monthly income. That is why lenders also look at your debt-to-income ratio to ensure that you can handle more loans within your budget. If you have a DTI ratio of over 30-40%, they will perceive you as a high-risk borrower and reject your loan application.
6. Give Attention to Your Employment History and Monthly Income
To ensure timely loan repayment, lenders want to see that you have a stable job with regular income. The minimum salary requirements may vary from lender to lender. For Clix Capital, you must be earning at least ₹25,000 per month to be eligible for an instant personal loan online. You should be working in the same company for at least 6 months and have a total work experience of at least 12 months. The lenders may offer you a higher loan amount with lower interest rates if your income is high with low DTI ratio.
7. Calculate Your Debt-to-Income Ratio
Your DTI ratio is in close relation with your EMIs and income. It is a percentage of your monthly income that you spend towards EMIs and other financial obligations. Lenders prefer borrowers with a low DTI ratio. If your DTI ratio is more than 40%, most lenders will not accept your loan application. To calculate your DTI ratio, find the total of your monthly loan EMIs, divide it by your gross monthly earnings, and multiply it by 100.
8. Build an Emergency Fund
Lenders prefer borrowers who have some savings, investments, and assets in their portfolio. They take it as an assurance that even if you lose your job or face a financial crunch during the loan term, you can at least continue paying your EMIs on time. If you have no savings, you may have your loan rejected or get a loan with higher interest rates.
9. Choose Your Loan Term Wisely
You need to choose your loan term wisely to ensure timely payment. A personal loan EMI calculator is a valuable tool that you can use to calculate your EMIs and choose a loan term with EMIs you can conveniently afford within your monthly budget. You have minimal chances of defaulting on your loan when you select your EMIs according to your repayment capacity.
While choosing your loan term, remember that the longer term you choose, the smaller will be the EMIs, but you will end up paying a higher interest amount by the loan term-end. On the contrary, if you choose a shorter loan term, your EMI amount will be bigger, but you will pay off your loan sooner and save big on the interest outgo.
Understand these nine crucial pointers to improve your chances of personal loan approval and repayment. Once you are ready to apply for a personal loan, get in touch with Clix Capital and avail a personal loan of up to ₹ 25 lakhs. We offer easy personal loans at competitive interest rates. Confirm your eligibility and make a robust repayment plan to avail the benefits personal loans have to offer.
You can also reach out to us at firstname.lastname@example.org or call us at 1800 200 9898
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