7 smart tips to instantly boost your personal loan approval chances

Are you planning to apply for a personal loan? If yes, make sure that you take necessary steps which can maximise your chances for loan approval. These tips include maintaining a stable income, keeping your debt down, choosing the right lender and so on. Here, we share some key tips that can help you improve your chances of loan approval.

Personal loan: These are some key tips to follow:

I. You need to check and improve your credit score: Banks usually use your credit score to assess your creditworthiness. Higher the score, greater the chances of loan approval.

Moreover, you can bargain for a lower interest rate if your credit score is high. In contrast, loan applicants with a poor score find it hard to get loan approval.

II. Maintain a stable income: Generally banks want to see a steady and adequate income which can assure them ability to repay.

III. Bring down your current debt: A high debt-to-income ratio shows risk to the banks.

IV. Apply for the right loan amount: Don’t apply for a personal loan more than you can realistically repay based on your income.

V. Choose the right lender: Different lenders have different criteria but it is recommended to first try your luck with a large bank which tends to charge slightly lower interest in comparison to NBFCs (non banking financial corporations) and fintech platforms.

VI. Consider a co-applicant or guarantor: If you add a co-applicant with a strong credit profile, it can boost your chances and even get you a better interest rate.

VII. Complete and accurate information: It goes without saying that you must provide correct information as inaccurate or incomplete applications can lead to refusal.

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Disclaimer: Mint has a tie-up with fintechs for providing credit, you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. Mint does not promote or encourage taking credit as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.