People usually apply for an instant personal loan online because it is an unsecured loan and is quickly approved. Lending institutions are also eager to give this kind of loan because it can be paid back quickly. However, it has also been observed that many borrowers face rejection of their applications because a few basic details are not clear. Denial of a loan application may be due to many reasons, but a poor understanding of the process should not be one of them.
Let’s look at how you can increase your chances of getting a personal loan online.
6 Steps to Improve Your Chances of Getting a Personal Loan Online
- Apply Online
One of the quickest and most convenient ways to get a personal loan is to apply online. Once you login to the lender’s website, all you need to do is fill in the required information and upload the documents. The lender typically takes a few days to review your documents and information before approving or rejecting your personal loan application. One significant advantage of applying online is that you can check your loan application status by just checking your email or messages.
After submitting the necessary paperwork, the loan approval process may take a week. The disbursement may take an additional one or two days, but it is faster than getting secured loans. Most financial institutions today pre-approve and pre-qualify you for a personal loan based on your banking history and credit score. Online pre-approval offers can speed up the process of getting a unique loan. Sometimes, the money can be in your account just minutes after you apply.
- Check your credit score
Even if you’ve never missed a loan payment and have a good credit history, you should check your credit score before applying for a personal loan online. Sometimes an error on the backend might reflect your credit score erroneously, which might impact your chances of getting approval.
Checking your credit score is essential because different lenders have varying standards for the minimum credit score they’ll accept. If your loan application is denied, it can hurt your credit score. Because of this, it is a good idea to examine your credit score to see whether or not it is equivalent to the minimum credit score required by the lender.
- Have a good bank balance
Lenders consider how well you keep your Monthly Average Balance (MAB) when assessing your ability to repay. Your MAB is determined by summing up your ending balances for the entire month and dividing by 30. If you keep an overall good balance, banks and non-bank financial companies will consider lending to you because it demonstrates that you have a good repayment capacity. Banks provide quick, pre-approved, and pre-qualified personal loans if you keep a high savings account balance.
- Apply only to one lender
Those in immediate need of cash often apply for an instant personal loan online at several institutions. This may increase your odds of getting quick approval. However, several loan applications may result in many rejections, negatively affecting your credit score. It is essential to keep the process simple and steady.
- Give accurate and complete information
Providing accurate personal and financial information will improve your chances of loan approval and streamline the procedure. For instance, if you have multiple income sources, disclose them all at once in case the lender needs additional income-related documentation. In addition, if you are staying in a rental place, keep a copy of your rental agreement handy to rule out any confusion over addresses.
- Make sure that all of the documents are ready
Gather the necessary paperwork before applying for a personal loan online. A personal loan is an unsecured loan that is usually approved with minimum documentation. However, you should contact your lender and ensure that you have all the necessary information ready for verification, as this speeds up the disbursal process. Documents such as your passport, Aadhar, PAN card, salary slips, IT returns, and bank statements are usually demanded.
Getting an instant personal loan online may seem complicated at first. However, if you have your personal information and verification documents ready, applying for a personal loan online is a breeze. Moreover, facilities such as pre-approval for existing bank customers also allow for same-day disbursal of the loan amount. In addition, personal loan repayment can be efficiently planned and managed through EMIs. However, like all other loans, a personal loan means more debt. Therefore, you must take stock of the situation and do enough research before getting a personal loan. Apply to the lender who meets most of your requirements and gives you the best rates. Also, read all the terms and understand the costs involved, such as processing fees, prepayment fees, and foreclosure fees, ahead of time so you don’t get any unpleasant surprises later. Interested in knowing more? Head over to Piramal Finance for more interesting blogs and to explore their product offerings.