Personal loans are one of the commonly availed loans by people. There are several reasons for the popularity of personal loans. To begin with, lenders do not limit the usage of funds provided by a personal loan. Therefore, they are the ideal product to choose from in any financial problem such as medical emergencies, to fund an exotic holiday or a wedding.

Personal loans get instant approval these days as documents required for sanctioning are significantly less. As these are unsecured loans, this means that you do not need any collateral for the loan. All these benefits make a personal loan ideal in any situation. But choosing the right lender can be difficult due to so many options in the market. Given below are useful tips that can help you in getting swift loan approval.

1. Do your research

Before taking a personal loan from any bank or NBFC, make sure you have done some thorough analysis of all the available options. Do not just blindly go for the first offer that you get. Check around and compare offers by different lenders. By doing this, you can find a better deal with a lower interest rate and favourable loan terms. Make sure that the loan you choose fulfils your needs.

2. Other loans and credit score

As a personal loan is a type of unsecured loan, credit score becomes an essential factor in determining whether the loan would get sanctioned or not. As the risk of default associated with personal loans is high, lenders favour applicants having a higher credit score, indicating better repayment capacity. Keeping your credit score above 750 can help you in getting a personal loan with lower interest rates.

3. Show your income and keep the bank balance

Maintaining the right bank balance ensures the lender’s high repayment capacity. On several occasions, income from one source is not enough to secure a personal loan. Make sure that you show all the income sources. It will work in your favour as lenders would be encouraged to grant you a loan.

4. Show relation with lenders

Whether you are applying at an NBFC or a bank showcasing the lender, being a loyal customer in the past can increase your chance of getting a personal loan’s instant approval. You may have invested through them or have an existing account with the lender.

5. Apply on the website

Applying for a personal loan online makes the approval easier and quicker than visiting the lender’s branch. To attract more customers, lenders let you apply online and promise instant disbursal of online loans.

6. Low debt to income ratio

Make sure that you have a low obligation-to-income ratio when applying for a loan. There can be complications and delay in sanctioning if your rate is above 45%.

Personal loan eligibility criteria

The eligibility for a personal loan depends upon various factors. The standard eligibility criteria for a personal loan across different banks and lenders include the following:

1. Profession: The amount sanctioned depends on the professional, whether you are self-employed or a salaried person.

2. Applicant’s age: One should be above 21 years and below 60 years at the time of application for a loan.

3. Minimum income: You should be earning Rs. 25,000 as a salaried person or should have Rs. 5,00,000 gross annual receipts.

4. CIBIL score: A minimum score of 650.

Conclusion

Hassle-free and quick loan disbursal depends upon the lender as well as on the applicant. If you follow some tips given above, not only would you be increasing your chances of an instant loan, but you can secure the best deal that fulfils your needs.