How to Perfect Your Personal Loan Application?

Personal loans are the best way to address credit needs when you require financial assistance. Nowadays availing a personal loan is easier as the application can be submitted online without much hassle. A single mistake on your loan application may lead to rejection of your loan. Here are some of the ways you can perfect your personal loan application to avoid loan rejection and make the process hassle-free.

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How to Perfect Your Personal Loan Application?

Make Sure to Attach The Details of Your Assets:

Any form of collateral can prove to be useful for backing your loan which in turn allows you to secure better terms on your loan. Therefore, you must mention the details of the collateral that can help you secure a loan. Additionally, you must also highlight that you have a stable job and are employed in a reputed company and therefore you are capable of supporting the loan repayment.

In short, you should be able to instill the guarantee among lenders that you are a responsible borrower. You have to first apply through online/offline applications and get the approval of the bank. For the approval of your loan application, you may also have to furnish a well-planned repayment framework. Submit important documents like income statements to impart an idea about your monthly cash flow projection. Prepare a pitch if you want to get the loan sanctioned quickly.

See Also: When Should I Get a Personal Loan?

Keep All Documents Ready:

Every bank requires a set of documents to decide your eligibility. Since banks conduct a thorough verification of your credibility as a borrower it is no surprise that you have to submit your financial records to prove to that you are a potential borrower. Banks take a close look into your debt to income ratio to ascertain how much loan can be sanctioned.

Keeping all your documents handy will allow you to drive the verification and approval process faster. The most important documents you must submit are –

• identity Proof: photo ID proofs that include driving license, PAN card, Aadhaar card or passport
• Proof of age: any documents like PAN card, driving license, or Aadhaar card or birth certificate
• Proof of address:  documents such as rental agreement, lease agreement, passport, voter ID card, driving license, Aadhaar card or utility bills like telecom bills, water or gas bills can be submitted
• Credit card statements: you may keep it handy as banks often for your monthly bills to evaluate the amount of EMI you can pay.
• Income documents: this is an important part of the loan documentation process where every borrower has to furnish details of their last 3 month’s salary slip and their bank statements. Banks also ask for details of your existing loan to understand whether or not you can accommodate a new loan without disrupting your budget.

See Also: Personal Loan in India

Conduct Thorough Research:

One of the most common mistakes borrowers make is availing personal loans without proper research. Choosing the wrong bank means you may end up shelling more money towards the loan. So before you finalize a bank, make sure to evaluate all the other options. You may visit the websites of online aggregators to compare the interest rates and loan terms offered by other financial institutions.

It is not always wise to opt for pre-approved loans or settle for the first personal loan offer. Take your time and then decide for yourself. Here you will also need to make some important calculations. Along with the rate of interest, also compare the EMIs offered by other lenders. The correct lending choice will be if the EMIs easily fit within your monthly budget. After you choose the best deal, make sure to compare related expenditures like processing fee, prepayment option and prepayment charges, etc. compare each factor before you decide to opt for a personal loan from any bank.

See Also: How to Get a Better Interest Rate on a Personal Loan

Make Sure You Have a Good Credit History:

Your credit history is the single most important factor while availing a personal loan. Lenders scrutinize your credit history to understand the way you manage your finances and how responsibly you manage debt.

A good credit history means the banks can place their faith in you about timely repayment. An excellent repayment history places you in a position to negotiate the terms and interest rate on your loan.

But if you have an average credit score due to missed EMI payments or have defaulted on loans, then it will be difficult for you to secure a personal loan easily. So make sure your financial affairs are in order while applying for a personal loan.

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