Ways to Boost Your Chances of Getting a Personal Loan in Chennai
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Personal loans are undoubtedly the first borrowing option for an individual’s mind when battling a financial crisis. This is mainly due to the collateral-free and multi-faceted nature of this product. Be it an expensive purchase, business requirements, medical emergencies, or various day-to-day requirements, personal loans seem like the one-stop solution. This demand is reflected in a report by the Reserve Bank of India, which shows personal loans make up for nearly 28% of bank credit in FY19-20.
However, the growing delinquency rate in metropolitan regions like Chennai has made financial institutions warier concerning loan applications. Thus, it’s imperative to check these factors before you apply for a personal loan in Chennai. Read on to know how you can improve your eligibility for one.
- Consider Your Debt-To-Income Ratio
It is essential to tally your current income and financial liabilities to gauge the exact loan amount you can afford. Personal loan banks generally limit monthly EMI payments to 40% of an applicant’s income. This is done to facilitate easy repayment and reduce the chances of default. To aim for more generous funds, applicants must improve their debt-to-income ratio. This can be done by including more earning sources or clearing existing debts. A low ratio indicates a better financial standing and can aid in loan approval.
- Refrain from Making Hasty Applications
If your loan applications are getting rejected repeatedly, and you are wondering why, the problem lies in this approach. Applying for a personal loan in Chennai without adequate intervals can put your lender under the wrong impression. It gives off the idea of a poor financial state and makes you appear as a credit-hungry person. Similarly, filling out multiple application forms for various financial institutions can lead them to perceive low creditworthiness. Multiple rejections can also lower your credit score, making future loan approval more challenging. A wise idea here is to space out your applications for minimum 6 months.
- Get a Co-signer
A great way to improve your chances of getting an online personal loan is to add a co-signer with higher earnings and a CIBIL score. This can drastically speed up your loan approval as the latter will be equally responsible for repayment. Also, in case of an unprecedented incident like sudden unemployment or health problems, a financially stable co-signer can prevent defaulting.
- Examine Your Lender’s Policies
With multiple financial institutions offering a personal loan in Chennai, applicants should compare different lenders’ policies before picking the best. Besides interest rates, you must also consider pre-payment facilities, additional charges, and repayment tenure, among other factors. Accordingly, pick a financing option your eligibility and requirements align with the most.
- Improve Your CIBIL Score
Probably the most significant eligibility parameter that can boost your chances of approval is a high credit score. Generally, banks and NBFCs look for a 750+ CIBIL score - the higher, the better. Clearing your existing debts of any personal loan in Chennai can improve your credit score. Also, make sure not to have a default record. These are crucial factors for an unsecured credit lender.
In case you cannot find a way to improve upon these requirements, consider a secured credit like a gold-backed loan. The simpler gold loan eligibility can help you avail instant funds to meet your emergency requirements.
Nevertheless, post picking a financing option, decide on your loan amount and repayment tenure wisely. Note that longer loan tenure might ease EMI payments but will cost a larger interest component in the long run. Therefore, choose accordingly for maximum savings.
Author’s Bio:
Rupeek Fintech is an RBI-certified NBFC providing online gold loans in over 5000 locations across India. Partnered with leading financial institutions like Federal Bank, ICICI Bank, and Karur Vaisya Bank, the company promises instant doorstep gold loan at the lowest interest rates. With its customer-first approach and hassle-free application process, Rupeek boasts of a 1lakh+ customer base in the country.
