Do Your Credit Have Stains? How to be approved for a Loan: A blog around loan approval and how your credit can help you.

Do you plan to apply for a loan soon? Are there any blemishes on your credit report that may prevent you from acquiring that loan?

Everybody has stains on their credit. It’s usually not something you feel proud of, but it can be a deal-breaker while trying to secure a loan. It’s essential to understand what’s causing these blemishes and how much of a risk they are when it comes to getting approved for a loan.

To guarantee your loan application is approved, here are some short bits of advice.

Check your credit score first.

If you apply without knowing your CIBIL score, you may be refused a loan. So, before applying for a loan, you should check your credit report to avoid unpleasant surprises.

You may think you have a good credit score since you have paid all your bills. But other factors may be affecting your credit score.

Pick Your Loan Amount Wisely

The loan amount you request is also a factor in loan approval.

When they receive the loan application, lenders check the applicant’s loan repayment capabilities based on current income. Therefore, a considerable loan amount that is impossible to repay within the stipulated time frame is likely to be denied.

Criteria for Eligibility

To qualify for a loan, you must first meet the qualifying conditions.

Loan qualifying criteria vary per lender but often include age, income, job stability, and debt-to-income ratio. Most banks allow applicants aged 22 to 60 to apply for a personal loan with a minimum payment of 25,000. So, if you want a personal loan, do your homework and apply with a lender who accepts your application.

Apply to only one lender:

People apply with multiple lenders to increase their chances of securing a loan. But, doing so diminishes your chances of getting a loan authorized. Lenders may conclude that you are hungry and desperate for a loan. Lenders may believe you have been refused by some lenders and are now applying with numerous lenders. Too many loan applications without approval can lower your CIBIL score.

Debt-to-Income

Your debt to income ratio is also a factor in personal loan approval. To qualify, you must spend no more than 30% of your income on EMIs. Lenders must verify your debts and your periodic payments. Lenders are wary of giving you a loan if you already pay more than 30% of your salary in EMIs. Your EMIs must not exceed 30% of your monthly income to be approved for a personal loan.

If you want to get approved for a loan, then pay your bills on time, don’t take out any new credit cards, and maintain more than one source of income. Make sure you choose the perfect loan for your needs and shop around a bit for different types of loans. Do all of this, and you won’t have any stains on your credit that might prevent you from getting a loan.

When you’re approved for a loan, you’re not only receiving a lot of help, but you’re also helping the rest of us by being an asset to society.