Update: October 21, 2021 1:27 PM STI
New Delhi [India], October 21 (ANI / NewsView): Today, one can apply for a personal loan online or instant in a few quick and easy steps since these loans are unsecured.
If you meet the personal loan eligibility criteria, the instant loan could be disbursed within minutes. Hence, these loans can be more useful in case of unforeseen events or unforeseen expenses.
Nevertheless, it is essential to remember five factors of the eligibility criteria so that your loan application is not refused. Compliance with these criteria could also guarantee you an online personal loan at relatively advantageous conditions.
1. Check your debt-to-income ratio
Make sure you pay off all of your existing debt, including credit card bills, before you apply for an instant personal loan. In other words, you need to reduce the debt-to-income ratio, as lenders may be reluctant to lend if there are multiple financial obligations that affect your ability to repay. This ratio can be calculated by dividing the total debt by your income.
It is imperative to ensure that this value remains below 50% because a higher percentage denotes a greater risk of default. As a rule of thumb, the total IMEs you are currently paying should not exceed 30 or 40% of monthly income. If not, prepay some of your debt before apply for a personal loan.
2. Improve and maintain a healthy credit rating
A healthy credit rating is crucial because personal loans are unsecured and will be used by lenders to assess your repayment capacity or creditworthiness. Typically, a credit score of 725 and above indicates that you are a responsible borrower, while a credit rating of 800 and above is excellent, indicating that a person is a safe borrower. A score below 725 would indicate that you do not have a correct repayment history. As a result, you will be classified as a high risk borrower and your loan application could be quickly rejected. While some lenders can still give you a personal loan online, note that you will have to pay a much higher interest rate to partially offset the risk of default. Most lenders rely on CIBIL scores of between 300 and 900 points. Make sure you have a good credit rating before choosing a personal loan. You can do this by making a point of honor check credit scores periodically.
3. Include all sources of income
Lenders check your monthly income to understand repayment capacity. In view of this, it is important to mention all sources of monthly income, not just salary income. It can be part-time income, rental income or any other source. Unlike home, auto, or gold loans, which are backed or secured by certain guarantees, personal loans are unsecured. Therefore, lenders should be reassured about your ability to make timely repayments.
4. Avoid applying for several loans at the same time
If you apply for multiple loans during the same period, your financial situation will be reported to lenders. Whenever you apply for a loan, including personal loans, the lender will use extensive inquiries with the credit bureaus to estimate the risk of default. Multiple loan applications will result in many inquiries from lenders on your credit report. Hence, it will lower your credit score since you will be seen as a credit hungry customer. The lenders will then reject the loan application. Regularly checking your credit score will help you avoid such pitfalls.
5. Choose a lender with appropriate eligibility criteria
Don’t randomly apply to multiple lenders hoping that one of them will approve your loan. Keep in mind that different personal lenders require you to meet different types of eligibility criteria. It is better to check your personal loan eligibility criteria vis-à-vis each lender beforehand and identify the one that suits you the most.
For example, Clix Capital has relatively easier eligibility criteria to meet: the applicant must be between 25 and 58 years old; have a minimum monthly income of Rs. 25,000; have been working for the current employer for at least six months; and have work experience in the current field for at least 12 months. If these conditions are met, simply have your essential documents checked online and the loan application process can be completed quickly.
Basically, understanding the requirements before applying for a loan maximizes your chances of getting approved. In addition, you could benefit from a lower interest rate and more favorable terms if you meet the eligibility standards.
Clix Capital is a new era of NBFC that is revolutionizing the lending space by offering differentiated digital lending products that are powered by technology and deep analysis. It offers a range of loan products to a diverse range of clients in the MSME and consumer segment, including personal loans, MSME loans, health loans and mortgage finance.
Clix is co-founded by industry veterans Pramod Bhasin and Anil Chawla and is backed by a private equity fund AION Capital Partners Limited (a subsidiary of Apollo Global Management, LLC – one of the largest managers of alternative investment in the world with assets under management of $ 433 billion). Mr. Bhasin is the founder of Genpact and the former CEO of GE Capital India and Asia; and Mr. Chawla was the former CEO of GE Capital India and Asia’s Commercial Finance Business.
Together, Bhasin, Chawla and AION jointly acquired the commercial lending and leasing business of GE Capital India in September 2016 and renamed it Clix Capital.
For more information, please visit www.clix.capital.
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