are available in abundance in the market now, but not all of us are eligible for it. Even though we can afford the EMI, some other factor could have resulted in a rejection. We’ve got some tips for you to ensure your loan application is approved without fail!
Each bank has different criteria and requirements. The basic elements don’t change such as you need to be 21 or less than 65 years. But other than that, you can find out how much minimum income they require, what documents they need, and what is the credit score cut off.
Work on your credit score
Nowadays, banks consider credit score in all loan applications. A credit score, or as some know it - CIBIL
- What kind of customer you are
- Whether you have repaid previous loans and bills on time
- If you are trustworthy or risky.
If you have a score of 700 and above, you shouldn’t have to worry, but some banks require 750 at least. If it is lower than that, then you should take measures to bring it up such as never missing an EMI or credit card bill payment, ensuring you only pay 30-40% of your salary towards debt, etc.
Add a co-borrower
If you are unable to meet the income requirement, you can add your spouse or direct relation as a co-borrower, some banks allow friends to be co-borrowers. Then you can add that person’s income as well. So, your chances of getting a loan are higher now.
Choose a longer tenure
If you choose a longer tenure, then you bring down the EMI you have to pay every month. So, if your income is low, then a long tenure would make the loan affordable. This will reduce the risk of you defaulting on the loan.
Keep all your documents ready
You need to submit a valid Govt ID and address proof like Aadhaar, driving license, passport, voter ID, and so on. You need to show proof of your income. The bank may need other supporting documents which they will tell you before you apply. Having them ready means you won’t have to scrap your loan application in between.
Before a bank approves a loan, they will check if you have stayed in the same residence for at least one year. They will also check if you have stayed in your current job for one year, or you have run the same business for 2 years. If you have been jumping from house to house and/or job to job, then the bank will have less faith that you will stay and pay the loan. So, you need to show you are stable.
Hope this helps you get the personal loan you need! Just make sure you tick all the boxes of the bank’s personal loan eligibility criteria before you apply for a loan.
Also, use online personal loan calculator offered by AU Small Finance Bank
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