By Kratika Agarwal
As the new financial year dawns upon us, it’s the perfect time to start chasing after your dreams. As the financial year wraps up and a new one kicks off, it’s got us thinking about what we want to accomplish. Maybe it’s finally getting that new car, diving into a new business venture, or sprucing up your sweet home. Luckily, personal loans are here to help make those dreams a reality, and fast!, Let us lend a hand in getting you the instant loan you need to kickstart your plans.
1. Improve your Credit Score
Credit scores are a big deal when it comes to getting approved for a loan. So, it’s important to keep up the good work and steer clear of unnecessary debts. Lenders pay attention to your credit history to figure out if you’re good at paying back what you owe. Just remember, maintaining a good credit score is key to showing them you’re reliable when it comes to handling loans.
2. Check the Eligibility Criteria before applying for an Instant Loan
Before you pick a lender, take a good look at all their requirements. It’ll save you from the hassle of getting turned down for reasons like age or income. When applying for personal loans online, it’s convenient, but getting the loan approved depends on meeting specific eligibility criteria. Each lender has its own set of rules and requirements, so make sure you check them out.
3. Do your Research
Before committing to a lender, take the time to explore all your options. Even if you’re in urgent need of funds, avoid jumping on the first offer you see. Nowadays, there are a bunch of financial companies offering favourable lending terms. Do a thorough check to make sure you don’t miss out on any good deals. Check out options like HDFC Personal Loans, SBI Quick Personal Loans, and Bajaj Finserv Personal Loans.
4. Discuss with the Lenders in the Market
Keeping in touch with your lenders is key when it comes to managing your loan payments. They can work with you to find new payment plans, if needed. They mainly check your financial situation and income to see if you can repay the loan. So, staying in the loop with them can make things easier.
5. Keep a Check on the fixed-obligation-to-income ratio
If you’re using most of your income to pay off debts, it can hurt your chances of getting approved for new loans. Plus, lenders might slap you with high-interest rates to cover the risk. Aim to keep your FOIR (Fixed Obligation to Income Ratio) between 40% and 50%. Want to up your odds? Try paying off some debts and credit card bills. It could make a big difference!
6. Do not Apply for Too Many Loans at the same time
When you’re in a financial pinch, applying for loans from multiple lenders might seem like a good idea to boost your chances of approval. But here’s the catch: it can harm your credit score because each application triggers a credit check.
7. Start Tracking your Expenses
Before you dive into getting a personal loan, take a moment to make a budget. It’s important to know if you can handle the monthly payments without stretching yourself too thin. A budget helps you see where your money’s going and if you can afford the loan.
8. Look for the Right Interest Type
Even a slight difference in rates among lenders can mean big changes in what you’ll pay overall. So, it’s smart to shop around for lenders offering good deals based on your credit score and needs. Look into options like Axis Bank and IndusInd Bank, starting at 10.49% interest, or Tata Capital, starting at 10.99%.
9. Keep the Documentation Up to Date
You would be required to submit lots of documents to verify your personal as well as financial information. Different lenders have different policies for the same; in some cases, you’ll be asked to provide copies of your state- or government-issued ID, copies of paystubs, tax returns, or bank statements. Make sure that they are kept up to date before submission.
10. Do not Give any False Information
Refrain from providing any false information that can prove to be a hurdle in the future. Make sure to submit all the right information and the correct documents to avoid any legal troubles. Further, knowingly providing any false information regarding your earnings can also have a serious impact on your credit score, and you may also lose your loan.
11. Keep an Emergency Fund
Life is indeed unpredictable. You might have a financial emergency in the future. You would still have an EMI to pay every month. In such cases, keeping some amount sheltered for emergencies helps. It can be fruitful many times in the future; just remember to add an amount every time from your savings.
