Instant loans are helpful in more than one way. One of the most stunning features of a personal loan is that you can use it in any way you please. Also, many online loan apps offer instant loans on the same day of application. So, an online loan offers you the much-needed flexibility to meet various financial obligations like buying consumer durables for home or meeting emergency expenses.
However, instant personal loans are unsecured loans. And both your loan eligibility and interest rate depends on things like your credit score. The good thing is that it is in your hands to increase your loan eligibility.
6 ways to increase your instant loan eligibility
Below are the six ways in which you can increase your loan eligibility to buy an automatic washing machine:
1. Check your credit score
A credit score is a number that indicates your creditworthiness and credit behaviour. A higher credit score means you are less likely to default and will repay your future obligations on time.
Credit Information Bureau India Limited or CIBIL is the credit information company that is engaged in maintaining the records of credit-related activities like credit cards and loans of individuals and companies. Lenders favour borrowers with a CIBIL score of above 750.
Having a credit score upwards of 750 improves your chances of getting loan approval, and that too at a low interest rate.
So, before you apply for a personal loan, check your CIBIL score. In case it is lower than what your lender requires, take measures to improve your credit score. You can pay off your existing debt, pay bills on time, etc., to improve your credit score.
2. Avoid more than one loan application at a time
Going for more than one loan application with multiple lenders at a time is the wrong strategy. Many people apply for loans with various lenders to get loan approval from one of the lenders. This may work against the borrower.
It gets difficult for you to get a personal loan when you apply for it at multiple places. Multiple hard inquiries at a time reduce your credit score. Also, it gives the lender the impression that you need numerous loans to meet your financial requirements.
You should maintain a gap of at least six months between loan applications. It increases the likelihood of your loan application getting approved.
3. Keep your debt-to-income ratio low
The debt-to-income ratio is the percentage of income going towards debt or loan repayment. It must be lower than 40% to apply for a new personal loan successfully.
If a higher percentage of your income is utilized towards debt repayment, it signals that you have more debt for the income you have. It goes on to show that you are unequipped to take any new obligation.
So, you must keep your debt-to-income ratio low. Also, defer from unnecessary borrowing as it can impact your credit score if you fail to repay.
4. Add a co-applicant
For instance, you are reading the eligibility criteria of the lender you are considering. And you conclude that you will fall short of meeting your lender’s eligibility criteria. Or it might be the case you are not eligible to get the desired loan amount. In such a scenario, you can consider adding a co-applicant. This will certainly increase your loan eligibility.
Again, adding a co-applicant reduces your credit risk. Your co-applicant would be equally liable for the timely repayment of the loan. This can also help in availing of an increased personal loan amount.
5. Meet the eligibility requirements of your lender
You need to meet all the eligibility criteria prescribed by your lender. When you meet the criteria of your lender, your chances of getting a loan approval significantly increase. Also, read the fine print of your lender to know the details on the loan approval process.
A personal loan has a more straightforward loan approval process and less strict eligibility criteria than other loan categories. The personal loan eligibility criteria of most lenders include the following:
- You being a resident of India
- Having age between 21 and 60 years
- Must be a salaried or a self-employed professional with minimum monthly income
- Stability in a job if you are a salaried employee
- A credit score of 750+
- Debt to income ratio under 30%-40%
So be sure that you meet all the eligibility requirements of your lender to qualify for the instant loan.
6. Choose an extended repayment tenure
Loans with extended repayment tenure facilitate you to timely repay as the EMI is low, thus reducing your risk of defaulting.
You can use a personal loan EMI calculator to determine the EMI amount that is perfect for you.
So, to get quick approval on your instant loan application for buying an automatic washing machine at favourable terms, you must check and improve your instant loan eligibility over an online loan app.
Apply for Loans of upto ₹5 Lakhs easily using your phone or laptop, and pay back on low EMIs