Personal loans are the most demanding type of loan in the economic sector which can be availed. These loans are sanctioned to borrowers without asking for any collateral, also it is not necessary for the borrowers to state the reasons for availing personal loans, and this is exactly the main reason why these loans are becoming so popular these days. Below listed are some tips which you can consider before applying for a personal loan before
Make sure you have a good credit/cibil score
there are certain factors on which are considered by the banks for an individual to be suitable to avail a loan, one of the factors is your credit or cibil score. The applicants, who have a higher credit score generally between 700 above, indicates a better repayment capacity. So, before the plan to apply for a personal loan, check your credit score thoroughly.
Check if you are already in a lot of debt
Borrowing more than your repaying capacity can always lead to debt. It is always recommended to check the amount to be repaid before finalizing the loan. If you apply for a loan higher than you’re paying capacity then it increases the chances of getting your personal loan application rejected. So before applying for a loan, always makes sure you take that amount which you repay easily.
Check your eligibility
This also mandatory as checking your eligibility before applying for personal loan, can help you to find out if you are eligible for the loan. Income stability is one of the most important criteria which lenders consider before sanctioning a loan.
Wait for around 4-6 months before re-applying
Try to maintain at least a minimum gap of 4-6 months, before applying for a fresh personal loan if your application has been rejected due to a poor credit score. First try to improve your score in these 6 months by clearing off dues, your credit card outstanding. As multiple rejections can cause your credit score to drop enormously.
Try to maintain a good credit utilization ratio
The Credit utilization ratio is basically a percentage of the borrower’s available credit that is currently being utilized. So it is a calculation which basically represents the total debt of a borrower which he or she is utilizing in comparison to total the revolving credit that has been approved by credit issuers While using credit cards, try to make sure to maintain a credit utilization ratio between 40-50%. This will also help you to maintain a good credit/cibil score.