5 Tips to Increase the Chances of Getting Approved for an Instant Loan

One of the most effective ways of meeting a short-term financial obligation today is by applying for an instant personal loan. A personal loan is an unsecured loan, which means that the individual applying for an instant loan online does not have to pledge collateral to avail of one. This article will help readers understand how applying the five tips discussed below can increase their chances of qualifying for the best personal loans offered by banks.

5 tips to increase your chances of qualifying for an instant personal loan:

Here are five tips that can help you improve your chances of qualifying for an instant personal loan:

  • Work on increasing monthly income: Banks consider various criteria while deciding to grant a personal loan to an individual, and one of these criteria is their income and earning potential. A higher monthly salary assures the bank of the individual’s capability to repay their personal loan. A higher monthly income, therefore, translates to a higher probability of loan approval. Individuals can submit proof of an increased income such as incentives for good performance, bonuses at work, and income generated from passive income sources.
  • Improve credit score: Another criterion that banks consider while assessing a personal loan application is the applicant’s credit score. A credit score is a three-digit score that ranges between 300 and 900. Generally, a credit score of 750 or above is considered good. A high credit score is reflective of the applicant’s creditworthiness, and it increases the chances of loan approval.
  • Reduce debt-to-income ratio: An applicant’s debt-to-income ratio is the ratio of their overall debt to their total income. For instance, if an individual’s monthly income is ₹50,000 and they pay an EMI (Equated Monthly Instalment) of ₹ 30,000 monthly, their debt-to-income ratio would be (₹30,000/₹50,000), that is 60%. This means that their monthly debt takes up a large portion of their monthly income. Maintaining a lower debt-to-income ratio increases eligibility for an instant personal loan.
  • Choose a longer personal loan tenure: If an applicant finds that their monthly EMIs are higher than they expected them to be, they can choose a longer personal loan tenure. Choosing a longer tenure reduces the value of an applicant’s monthly EMIs. Applicants can try opting for a longer tenure to try and get a higher loan amount approved and increase their eligibility.
  • Avoid applying for multiple personal loans: Another criterion that the bank checks while assessing one’s personal loan application is their credit report. An individual’s credit report includes the details of all the debt that they have taken over the years. If an applicant’s loan application has been rejected multiple times, it reflects badly on their credit report. If they have multiple loan repayments ongoing, they must avoid taking on more debt and focus on repaying the EMIs of their existing loans.

Understanding the importance of a personal loan calculator

Applicants should plan their personal loan’s repayment before even applying for a personal loan. This is possible with the help of personal loan calculators. A personal loan calculator estimates an individual’s future monthly EMIs in just a few seconds. This foresight can help applicants plan their other expenses by accounting for their personal loan repayment.

The bottom line

There are a few important things that applicants can do to increase their chances of getting approval for an instant personal loan. These include improving their credit score, reducing debt-to-income ratio, increasing income and more. Individuals can opt for quick instant loans with a 100% digital application process like the ones offered by IndusInd Bank. With a tenure of 1 to 4 years and a loan amount ranging from ₹30,000 to ₹5 lakh, IndusInd Bank’s Instant Personal Loans are a great option to consider.

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