What is Personal Loan?
A personal loan is an entirely unsecured loan which means that it can be opted for meeting any financial requirements that you cannot fulfill with your savings. For example, you can get personal loan to fund your higher education, medical expenses, wedding costs. Anyone can opt for unsecured loans from all the top banks, NBFCs, making it more manageable for the common groups to opt for it. However, being unsecured in nature, lenders are more rigid with their terms for approval as they want to be sure about the repayment and avoid the situation of bad debts. These loans are extended based on the CIBIL score. If your score is good, you can get personal loan. If your credit score is high, you can quickly get a low-interest loan.
In urgent cash requirements, loan seekers would need funds urgently. So it becomes essential to remove all the possible delays while availing of instant cash loan by utilizing these tips mentioned below:
An instant cash loan is the quickest yet safest method to get a personal loan. However, after you have provided all the needed documents and required information, you have to wait till your loan application gets approved. After the verification process, the lender will approve or reject your application. You will be the approval or rejection status through emails and messages. This process generally takes from one to two days. As soon as your application is approved, the loan amount will disburse the same day.
Maintain a healthy credit score
A healthy credit score represents your creditworthiness. Usually, a score above 700 is valued well by the lender. However, a score above 750 can be an advantage in quicker personal loan approval. A better score will increase your chances of a loan getting approved. This is the main criteria that lender uses to evaluate your credibility, particularly in a personal loan, as it is an unsecured loan that does not need any collateral or security. With a healthy credit score, lenders consider your profile a low-risk profile which means the possibility of you defaulting on the loan repayment in the future is low. To maintain a healthy credit score, you should pay your EMIs timely and avoid defaulting on your dues.
Check your credit score before applying:
Even if you have a sound credit score and you have never defaulted on any of your loans, it is advisable that you review your credit score before you apply for a personal loan. For example, you may have missed out on a couple of credit card payments on due dates and paid it a day or two later. In addition, it can be contesting to maintain track of numerous credit card statements. However, such uncertainties in payments can impact your credit score. Moreover, a credit score can have mistakes that lead to a loan rejection.
Also, reviewing your credit score is vital as different lenders have different credit score requirements. If your loan application gets rejected, it can hurt your credit score. Therefore, it is good to check your credit score and see if it matches the lender’s credit score eligibility.
Keep a good bank balance:
While checking your repayment capacity, lenders check if you maintain an excellent Average Monthly Balance. Banks estimate your Monthly account balance by counting the daily closing balance of all days in a month and splitting it by the number of days. Thus, banks/NBFCs consider lending you if you hold a sound balance because it shows you have a good repayment capacity. Moreover, the financial institution can offer pre-approved personal loans, instant personal loans, and pre-qualified personal loans that are seamless and trouble-free if you have a higher average balance in your savings account. Such cash loans are ready to get disbursed, which can be credited into your savings account in a few clicks. Regardless, rather than getting fascinated by an instant loan and blindly availing it, we recommend that you read the terms and conditions, know the various charges, compare them with other lenders, and then decide.
Apply only with one lender:
When many of us urgently need money, people usually apply for personal loans with multiple banks and NBFCs to increase the chances of getting a loan as soon as possible. However, the lenders can see that you have applied with numerous lenders, which might give them an idea that you are in a financial crunch and a desperate position to avail of a personal loan. In such a scenario, the lenders may avoid providing you with a credit facility. Moreover, multiple applications of loans may result in various rejections, which may hurt your credit score. Also, it can be time-consuming to apply at various banks and NBFCs, so keep track of all the applications, and coordinate with various lenders.
Different lenders have different eligibility criteria. Although they all offer the same product, a personal loan, the features, benefits, rate of interest, and other charges, can have a substantial difference. Thus, before directly applying for a personal loan with any lender, you should research and choose the right lender.