Everyone needs approval for a Loan, be it a Personal Loan or a Car Loan, but not everyone gets it. All the factors for approval must be stacked in your favour before you can get the go-ahead. From meeting all the loan requirements to activating the loan app on your smartphone, eligibility criteria are crucial to getting loans.
There are factors that can guarantee your chances of being approved for a loan. Lenders such as ICICI Bank for business have stipulated criteria that safeguard the lending process. These criteria are not only to protect lenders from financial loss but also to ensure that customers can repay.
How to Get Your Application for a Loan Approved Fast
Here are some of the factors that boost your chances of approval:
- Research Your Desired Lender
Finding the right lender should be your first concern in applying for a Personal Loan. Several lenders may contact you for a loan, but not all are suitable for you. You must shop for those within the niche you desire – like reaching out to lenders who give out Car Loans if you require one.
You must research their eligibility criteria, charges, and related fees to ensure it suits you. The processing fees, interest rates, prepayment charges, default penalty, and loan tenure must be agreeable to you before you choose a lender to finance your needs.
- Have a High Credit Score
Your credit score is a reflection of your creditworthiness. Most lenders would recommend that you have a credit score above 750 to be considered for loan approval. A high credit score indicates that you can repay your loan within the stipulated time and have a high sense of financial prudence.
Although there are loans for people with low credit scores, the chances of approval are low, and you may not get the terms you desire. People with low scores are considered high risk – so you may want to repair your credit score before applying.
- Meet all Eligibility Criteria
Apart from having a high credit score, you must also meet other eligibility criteria to have your loan application approved. Some of these are as follows –
- You must be an Indian citizen
- Your residential address must be confirmed
- You need to have a regular source of income
- Submit government-issued ID
- Meet other lender-specific requirements
You must have all documents related to your loan application before filing an application. If you are applying online or via a loan app such as the ICICI Bank’s iMobile Pay, all the required documents must be handy and ready for upload during the application process.
- Consider Pre-approved Personal Loans
Some financial institutions may offer you pre-approved loans based on your relationship with the bank. Some online lenders may also have pre-approved loans for you – meaning that your application will be approved if you apply. It is best to accept these offers instead of filing requests with other lenders.
- Go for Secured Loans or Use Down Payments
If you have reasons to believe that your request for a loan may be rejected, then you can opt for secured loans if they are available. A secured loan is tied to a collateral security such as cars, houses, and other fixed assets. Where available, you may also opt to make down payments if it is required for your loan approval.
- Apply With a Lender One at a Time
Sometimes, it is best to apply for a loan with a lender one at a time. This is largely because many lenders will check and see if you have applied to many lenders simultaneously and then turn down your request. If you apply to multiple lenders because you want to improve your chances for approval, they may assume that you are facing an acute financial emergency and could decline your application.
- Go for Co-signed Loans
Whether you have a high credit score or not, applying for a co-signed loan may improve your chances of approval. In this regard, more than one person is taking responsibility for a single loan, meaning that each is obligated to repay. Given this situation, each co-signer will cover up for the rest and bear one another’s risks in terms of eligibility and repayment.