Getting a loan from the lender is a need for borrower during the times of cash crunch. Irrespective of the type of the loan you apply for, you should always get your credit report ahead to avoid nasty surprises during the times of need. Though there are many types of loan to rescue the borrower from different types of needs, a personal loan could a choice when the need is unique in nature and there is no specific financial aid available for the same. These loans can serve you any unexpected expense that you might be able to fund with your income. Facing the rejection from the lender for an unsecured loan is very disappointing so, follow these tips to improve the chances of loan approval.
Personal Loan Approved Easily
Having your credit report checked before applying for the unsecured loan is very important because the lender considers credit score as a prominent factor to approve the loan and decide the rate of interest. A credit score reflects your responsible behaviour in repaying the credit availed from the lenders. Higher the credit score, higher will be chances of loan approval. When you obtain a credit report from the agencies, check for any errors that do have the impact on loan approval.
Credit score above 750
Most of the people who apply for the credit score are confused about the right range of the credit score that makes them eligible get a loan. Lenders are interested in offering a cash loan to the people whose credit score is above 750. They consider you eligible to apply for the loan with the credit score above 750. If you don’t have, you can consider having a co-signer to get an unsecured loan approved.
Big no to multiple lenders
Borrowers are under a myth that applying for the loan with multiple lenders will increase the chances of loan approval. The lender may think that you are greedy to take a loan; moreover, rejection from multiple lenders will impact your credit score adversely. Compare and apply for the loan with the lender where you have high chances of approval.
No personal loan in past 6 months
There should be a gap of 6 months between the loans if you are going to apply for the same loan again. Applying the loan for in the short interval may create a doubt for the lender about your repayment capability and reduce those chances of the approval.
Only 30% of income towards EMI
Lenders judge if you have enough income left to address your regular expense after paying the EMI of the loan. The EMI of the loan that you take from the lender should not be more than 30% of your total income. If your income levels do not meet the eligibility criteria, you can take the help of the co-signer.