Getting a personal loan will sometimes look like a child’s play as you might have seen an excessive amount of emails and SMS about instant personal loan approval. This is not as simple as it looks. There are many advantages of the instant loan. The most important advantage is quick disbursal. It is not the case with other loan types. These are flexible and hence you can avail the loan amount and use it for any purpose you like without restrictions. However, it is important to ensure that you understand all the terms and conditions associated with this type of loan before you sign up for one. Nowadays processing of a loan is a streamlined online process. As the entire process is online, a small mismatch in the information may delay the processing of loan and also its expenses. If the banks find that your information is accurate then the money after deduction of the processing fees and other charges will get credited to the customer’s account immediately. Earlier, a bank would take the form from the customer, verify the details and offer the loan after that. This took several days before the loan could be disbursed. The process is much more streamlined and faster in case of quick cash loans.
How To Get Personal Loans Hazel Free
I. Your credit score must be checked before you apply for a personal loan
Checking your credit score is important otherwise when you apply for a loan without knowing your credit score, you run the risk of being rejected for a low score. The main thing you should do if you are planning to apply for a loan is to obtain your credit report so you do not get a nasty surprise when you apply for the loan. There are some risk factors that could be dragging down your score like a high credit utilization ratio, being the guarantor for a loan that has been defaulted on, or even fraud or reporting mistakes on your credit report, etc even if you have a good score after you are paying all your bills on time so it is always a better idea to obtain a copy of your credit report so that you are up to date on your credit situation, and rectify any kind errors to avoid the possibility of being rejected.
II. Ensuring you have a credit score of 750 or above
You will be standing the best chance of having your personal loan approved If you have a score in the range of 750 or above. Your credit score is important for a personal loan as there is no guarantee that lenders can use to safeguard their money in case of default. Lenders typically look for a credit score of 750 to judge if you are eligible for a loan. If your score is less than 750, then you must identify the weak areas in your credit profile and work towards improving your score. The poor score rejection will lead to cause your credit score to drop even further, which will make it more and more difficult to rebuild your health credit.
III. Never make multiple loan applications
Applying to several banks or lenders at the same time in order to maximize your chances of being approved by at least one lender is not at all a good idea. The potential lenders get the feeling that you are hungry for credit and need to apply to several sources to fund your expenses when you do this. Too many loan applications without corresponding approvals will lead to a drop in your credit score. So you must make sure you only apply to the place where you have the best chance of being approved.
IV. A personal loan should not have availed in the past 6 months
The lenders sometimes will be unsure about your ability to take on the burden of a new debt obligation and make additional repayments if they see that you have availed a similar loan recently. There should be a gap of at least 6 months between your loan applications.
V. Have a mix of secured and unsecured loans
A secured loan is the one where the customer provides a guarantee to the lender. The various secured loans are the home loans where the property being bought, in the auto loans it is the vehicle, in the case of gold loans it is the gold that is pledged. However, in a personal loan, the lender has no guarantee with which to secure his money. Your credit score improves when there is a mix of both secured and unsecured loans which are being repaid on time, and potential lenders are reassured.
VI. Ensure that not more than 30% of income goes towards EMIs
Make sure that the EMIs from all your other loans do not exceed 30% of your income because the lenders want to judge if you have enough income left over from your existing loan obligations to take on a new loan. This will not include your home loan EMI.
You must also make sure that you have been in the same job or company for at least six months before you apply. Banks will always want to see stable employment and also a steady source of income so that you are able to make all your loan repayments on time. In the case of a personal loan, your income is very important as the banks do not have any guarantee in case you default on your payments.There is a chance that your application will be rejected If you have been changing jobs frequently.